Updates Fiscal Year 2018 Annual Guidance
LAKE FOREST, Calif.--(BUSINESS WIRE)--
Del Taco Restaurants, Inc. (“Del Taco” or the “Company”), (NASDAQ:
TACO), the second largest Mexican-American quick service restaurant
chain by units in the United States, today reported fiscal third quarter
2018 financial results. The Company also updated its guidance for fiscal
year 2018.
Fiscal Third Quarter 2018 Highlights
-
System-wide comparable restaurant sales grew 1.4%, marking the 20th
consecutive quarter of gains;
-
Company-operated comparable restaurant sales grew 0.3%, marking
the 25th consecutive quarter of gains. Company-operated comparable
restaurant sales growth was comprised of average check growth of
2.9%, partially offset by a transaction decrease of 2.6%;
-
Franchised comparable restaurant sales grew 3.0%;
-
Total revenue increased 6.2% to $117.8 million (including $3.2 million
of franchise advertising contributions and $0.2 million of other
franchise revenue required as part of the new revenue recognition
rules adopted in the fiscal first quarter whereby the offsetting
impact is an increase to expenses such that there is no impact on
operating income and net income) compared to $111.0 million in the
fiscal third quarter 2017;
-
Company restaurant sales increased 3.1% to $109.6 million compared to
$106.3 million in the fiscal third quarter 2017;
-
Net income was $5.9 million, or $0.15 per diluted share, compared to
$5.1 million in the fiscal third quarter 2017, or $0.13 per diluted
share;
-
Adjusted net income* was $6.0 million, or $0.15 per diluted share,
compared to $5.1 million in the fiscal third quarter 2017, or $0.13
per diluted share;
-
Restaurant contribution* margin increased 70 basis points to 19.9%
compared to 19.2% in the fiscal third quarter 2017; and
-
Adjusted EBITDA* increased 6.4% to $17.7 million compared to $16.6
million in the fiscal third quarter 2017.
Adjusted net income*, Restaurant contribution*, and Adjusted EBITDA*
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, “During the quarter we made strategic progress led by
the launch of Elevated Combined Solutions which furthers our mission to
be the leader in the value oriented QSR+ segment. We again experienced
strong franchise comparable restaurant sales trends demonstrating our
strengthening franchise system which supports brand portability. We
remained focused on strengthening our great culture with the launch of
our company values and our new advertising campaign centered on real
employees. And, despite soft company-operated comparable restaurant
sales, our effective margin management strategy helped us deliver an
improved restaurant contribution margin after adjusting for the
favorable timing of advertising expenses.”
Cappasola continued, “Although the new $1 Chicken Quesadilla Snacker did
not support check or transaction trends during the third quarter, our
flexible barbell menu strategy allowed us to quickly pivot to mid-tier
and premium products which achieved an immediate improvement in menu
mix. As we enter the fourth quarter our plan to generate transaction
momentum includes the launch of Shredded Beef as a limited time offer,
which has already sequentially improved our trends, and premium
innovation with a new Triple Meat Epic Burrito. Still, we have opted to
take a more cautious approach to our fiscal year outlook and have
therefore updated our annual guidance.”
Cappasola concluded, “Next month, we will launch our Del Taco mobile app
and begin offering delivery in the Los Angeles market through GrubHub,
followed by a system-wide launch in 2019 that will include partnerships
with Postmates and DoorDash. We believe delivery will provide another
convenient channel to enjoy our fresh, high quality food and that moving
toward a multiple delivery service provider approach will position us to
maximize consumer demand.”
Review of Fiscal Third Quarter 2018 Financial Results
Total revenue increased 6.2% to $117.8 million (including $3.2 million
of franchise advertising contributions and $0.2 million of other
franchise revenue required as part of the new revenue recognition rules
adopted in the fiscal first quarter whereby the offsetting impact is an
increase to expenses such that there is no impact on operating income
and net income) compared to $111.0 million in the fiscal third quarter
2017. Excluding these revenue recognition impacts, total revenue
increased 3.1%.
Comparable restaurant sales increased 1.4% system-wide, resulting in a
5.5% increase on a two-year basis. The Del Taco system has now generated
comparable restaurant sales growth for 20 consecutive quarters.
Company-operated comparable restaurant sales increased 0.3%, marking 25
consecutive quarters of comparable restaurant sales growth. Franchise
comparable restaurant sales increased 3.0%, reflecting the strength of
our system across a diverse geographic footprint.
Net income was $5.9 million, representing $0.15 per diluted share,
compared to $5.1 million in the fiscal third quarter 2017, representing
$0.13 per diluted share.
Adjusted net income* was $6.0 million, or $0.15 per diluted share,
compared to $5.1 million in the fiscal third quarter 2017, or $0.13 per
diluted share.
Restaurant contribution* was $21.8 million compared to $20.4 million in
the fiscal third quarter 2017. As a percentage of Company restaurant
sales, restaurant contribution margin increased approximately 70 basis
points year-over-year to 19.9%. The increase was the result of an
approximate 90 basis point decrease in food and paper costs and a 40
basis point decrease in occupancy and other operating expenses, which
was due to the timing of advertising expenses, offset by an approximate
60 basis point increase in labor and related expenses.
Adjusted EBITDA* increased 6.4% to $17.7 million compared to $16.6
million in the fiscal third quarter 2017.
Restaurant Portfolio
During the fiscal third quarter 2018, we opened two company-operated
restaurants and three franchised restaurants and closed three
company-operated restaurants and one franchised restaurant. We also
purchased three restaurants from franchisees.
Thus far in the fiscal fourth quarter 2018, we have opened two
company-operated restaurants and there are currently 17 restaurants
(eleven franchised and six company) under construction, of which 13 to
16 are expected to open this fiscal year.
Repurchase Program for Common Stock and Warrants
During the fiscal third quarter 2018, we repurchased 235,041 shares of
common stock at average price of $12.74 per share for a total of $3.0
million, and repurchased 5,972 warrants at an average price per warrant
of $3.07. At the end of the fiscal third quarter approximately $38.1
million remained under our $75 million repurchase authorization.
Updated Fiscal Year 2018 Guidance
We are updating our guidance for fiscal year 2018, which is a 52-week
period ending January 1, 2019.
-
System-wide same store sales growth of approximately 3% (previously 2%
to 4%);
-
Total revenue between $504 million and $507 million (previously $506
to $516 million), reflecting the new revenue recognition rules adopted
in the first fiscal quarter 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 $470 million and $473
million (previously $473 to $483 million);
-
Restaurant contribution margin between 19.3% and 19.5% (previously
19.3% to 19.8%);
-
General and administrative expenses between approximately 8.5% and
8.7% of total revenue (previously 8.2% to 8.5%), including the expense
side of the other franchise revenue that will now be reported on a
gross basis;
-
Effective tax rate of approximately 26.0% to 27.0% (previously 26.5%
to 27.5%);
-
Adjusted diluted earnings per share of approximately $0.53 to $0.56
(previously $0.59 to $0.63);
-
Adjusted EBITDA between $70.5 million and $71.5 million (previously
$71.5 to $74.0 million);
-
25 to 28 new system-wide restaurant openings; and
-
Net capital expenditures between $39.0 million to $42.0 million
(previously $35.0 million to $38.0 million).
We have not reconciled guidance for Adjusted diluted earnings per share
and 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 4:30 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 201-689-8471. A telephone replay will be available shortly after
the call has concluded and can be accessed by dialing 412-317-6671; the
passcode is 13683448.
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.
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 marginare 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.
Adjusted net income* represents company net income before
impairment of long-lived assets, restaurant closure charges, and other
income related to the write-off of unfavorable lease liabilities, net of
tax. Adjusted diluted net income per share represents company
diluted net income per share before impairment of long-lived assets,
restaurant closure charges, and other income related to the write-off of
unfavorable lease liabilities, net of tax.
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 fresh grilled chicken and carne asada
steak, hand-sliced avocado, hand-grated cheddar cheese, slow-cooked
beans made from scratch, and creamy Queso Blanco. Del Taco’s new
advertising campaign, “Celebrating the Hardest Working Hands in Fast
Food,” further communicates the company’s commitment to providing guests
with fresh, quality food prepared by hand every day. 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 on 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 2,
2018, 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.
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|
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|
|
Del Taco Restaurants, Inc.
|
Consolidated Balance Sheets
|
(In thousands, except share and per share data)
|
|
|
|
|
|
|
|
September 11, 2018
|
|
January 2, 2018
|
Assets
|
|
(unaudited)
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
6,628
|
|
$
|
6,559
|
Accounts and other receivables, net
|
|
|
3,565
|
|
|
3,828
|
Inventories
|
|
|
2,596
|
|
|
2,712
|
Prepaid expenses and other current assets
|
|
|
4,793
|
|
|
6,784
|
Total current assets
|
|
|
17,582
|
|
|
19,883
|
Property and equipment, net
|
|
|
172,094
|
|
|
156,124
|
Goodwill
|
|
|
321,531
|
|
|
320,638
|
Trademarks
|
|
|
220,300
|
|
|
220,300
|
Intangible assets, net
|
|
|
19,450
|
|
|
21,498
|
Other assets, net
|
|
|
4,562
|
|
|
3,881
|
Total assets
|
|
$
|
755,519
|
|
$
|
742,324
|
|
|
|
|
|
Liabilities and shareholders' equity
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
|
$
|
20,172
|
|
$
|
18,759
|
Other accrued liabilities
|
|
|
40,706
|
|
|
35,257
|
Current portion of capital lease obligations and deemed landlord
financing liabilities
|
|
|
1,109
|
|
|
1,415
|
Total current liabilities
|
|
|
61,987
|
|
|
55,431
|
Long-term debt, capital lease obligations and deemed landlord
financing
liabilities, excluding current portion, net
|
|
|
169,174
|
|
|
170,639
|
Deferred income taxes
|
|
|
69,137
|
|
|
68,574
|
Other non-current liabilities
|
|
|
31,945
|
|
|
31,431
|
Total liabilities
|
|
|
332,243
|
|
|
326,075
|
|
|
|
|
|
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;
38,066,801 shares issued and
outstanding at September 11, 2018; 38,434,274 shares issued and
outstanding at January 2, 2018
|
|
|
4
|
|
|
4
|
Additional paid-in capital
|
|
|
343,412
|
|
|
349,334
|
Accumulated other comprehensive income
|
|
|
357
|
|
|
14
|
Retained earnings
|
|
|
79,503
|
|
|
66,897
|
Total shareholders' equity
|
|
|
423,276
|
|
|
416,249
|
Total liabilities and shareholders' equity
|
|
$
|
755,519
|
|
$
|
742,324
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Del Taco Restaurants, Inc.
|
Consolidated Statements of Comprehensive Income
|
(Unaudited)
|
(In thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
12 Weeks Ended
|
|
36 Weeks Ended
|
|
|
September 11, 2018
|
|
September 12, 2017
|
|
September 11, 2018
|
|
September 12, 2017
|
Revenue:
|
|
|
|
|
|
|
|
|
Company restaurant sales
|
|
$
|
109,559
|
|
|
$
|
106,298
|
|
|
$
|
324,468
|
|
|
$
|
311,542
|
|
Franchise revenue
|
|
|
4,308
|
|
|
|
3,978
|
|
|
|
12,249
|
|
|
|
11,494
|
|
Franchise advertising contributions
|
|
|
3,155
|
|
|
|
—
|
|
|
|
9,227
|
|
|
|
—
|
|
Franchise sublease income
|
|
|
808
|
|
|
|
712
|
|
|
|
2,253
|
|
|
|
1,878
|
|
Total revenue
|
|
|
117,830
|
|
|
|
110,988
|
|
|
|
348,197
|
|
|
|
324,914
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Restaurant operating expenses:
|
|
|
|
|
|
|
|
|
Food and paper costs
|
|
|
29,601
|
|
|
|
29,648
|
|
|
|
88,656
|
|
|
|
86,336
|
|
Labor and related expenses
|
|
|
35,301
|
|
|
|
33,635
|
|
|
|
105,541
|
|
|
|
100,041
|
|
Occupancy and other operating expenses
|
|
|
22,844
|
|
|
|
22,608
|
|
|
|
67,457
|
|
|
|
64,243
|
|
General and administrative
|
|
|
9,606
|
|
|
|
8,817
|
|
|
|
30,356
|
|
|
|
27,177
|
|
Franchise advertising expenses
|
|
|
3,155
|
|
|
|
—
|
|
|
|
9,227
|
|
|
|
—
|
|
Depreciation and amortization
|
|
|
5,855
|
|
|
|
5,522
|
|
|
|
17,616
|
|
|
|
15,903
|
|
Occupancy and other - franchise subleases
|
|
|
762
|
|
|
|
654
|
|
|
|
2,051
|
|
|
|
1,738
|
|
Pre-opening costs
|
|
|
259
|
|
|
|
354
|
|
|
|
900
|
|
|
|
531
|
|
Impairment of long-lived assets
|
|
|
—
|
|
|
|
—
|
|
|
|
1,661
|
|
|
|
—
|
|
Restaurant closure charges, net
|
|
|
672
|
|
|
|
(16
|
)
|
|
|
635
|
|
|
|
(1
|
)
|
Loss on disposal of assets, net
|
|
|
580
|
|
|
|
233
|
|
|
|
760
|
|
|
|
524
|
|
Total operating expenses
|
|
|
108,635
|
|
|
|
101,455
|
|
|
|
324,860
|
|
|
|
296,492
|
|
Income from operations
|
|
|
9,195
|
|
|
|
9,533
|
|
|
|
23,337
|
|
|
|
28,422
|
|
Other expense, net
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
2,062
|
|
|
|
1,628
|
|
|
|
5,984
|
|
|
|
4,798
|
|
Other income
|
|
|
(523
|
)
|
|
|
—
|
|
|
|
(523
|
)
|
|
|
—
|
|
Total other expense, net
|
|
|
1,539
|
|
|
|
1,628
|
|
|
|
5,461
|
|
|
|
4,798
|
|
Income from operations before provision for income taxes
|
|
|
7,656
|
|
|
|
7,905
|
|
|
|
17,876
|
|
|
|
23,624
|
|
Provision for income taxes
|
|
|
1,782
|
|
|
|
2,804
|
|
|
|
4,563
|
|
|
|
8,955
|
|
Net income
|
|
|
5,874
|
|
|
|
5,101
|
|
|
|
13,313
|
|
|
|
14,669
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
Change in fair value of interest rate cap, net of tax
|
|
|
23
|
|
|
|
(35
|
)
|
|
|
312
|
|
|
|
(271
|
)
|
Reclassification of interest rate cap amortization included in
net income
|
|
|
15
|
|
|
|
—
|
|
|
|
31
|
|
|
|
—
|
|
Total other comprehensive income (loss)
|
|
|
38
|
|
|
|
(35
|
)
|
|
|
343
|
|
|
|
(271
|
)
|
Comprehensive income
|
|
$
|
5,912
|
|
|
$
|
5,066
|
|
|
$
|
13,656
|
|
|
$
|
14,398
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.15
|
|
|
$
|
0.13
|
|
|
$
|
0.35
|
|
|
$
|
0.38
|
|
Diluted
|
|
$
|
0.15
|
|
|
$
|
0.13
|
|
|
$
|
0.34
|
|
|
$
|
0.37
|
|
Weighted-average shares outstanding
|
|
|
|
|
|
|
|
|
Basic
|
|
|
38,191,335
|
|
|
|
38,695,099
|
|
|
|
38,310,842
|
|
|
|
38,744,963
|
|
Diluted
|
|
|
39,391,284
|
|
|
|
39,839,571
|
|
|
|
39,108,573
|
|
|
|
40,016,062
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Del Taco Restaurants, Inc.
|
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
|
(Unaudited)
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
12 Weeks Ended
|
|
36 Weeks Ended
|
|
|
September 11, 2018
|
|
September 12, 2017
|
|
September 11, 2018
|
|
September 12, 2017
|
Net income
|
|
$
|
5,874
|
|
|
$
|
5,101
|
|
|
$
|
13,313
|
|
|
$
|
14,669
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
1,782
|
|
|
|
2,804
|
|
|
|
4,563
|
|
|
|
8,955
|
|
Interest expense
|
|
|
2,062
|
|
|
|
1,628
|
|
|
|
5,984
|
|
|
|
4,798
|
|
Depreciation and amortization
|
|
|
5,855
|
|
|
|
5,522
|
|
|
|
17,616
|
|
|
|
15,903
|
|
EBITDA
|
|
|
15,573
|
|
|
|
15,055
|
|
|
|
41,476
|
|
|
|
44,325
|
|
Stock-based compensation expense (a)
|
|
|
1,445
|
|
|
|
1,191
|
|
|
|
4,079
|
|
|
|
3,340
|
|
Loss on disposal of assets, net (b)
|
|
|
580
|
|
|
|
233
|
|
|
|
760
|
|
|
|
524
|
|
Restaurant closure charges, net (c)
|
|
|
672
|
|
|
|
(16
|
)
|
|
|
635
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of favorable and unfavorable lease assets and
liabilities, net (d)
|
|
|
(352
|
)
|
|
|
(229
|
)
|
|
|
(602
|
)
|
|
|
(521
|
)
|
Pre-opening costs (e)
|
|
|
259
|
|
|
|
354
|
|
|
|
900
|
|
|
|
531
|
|
Impairment of long-lived assets (f)
|
|
|
—
|
|
|
|
—
|
|
|
|
1,661
|
|
|
|
—
|
|
Other income (g)
|
|
|
(523
|
)
|
|
|
—
|
|
|
|
(523
|
)
|
|
|
—
|
|
Adjusted EBITDA
|
|
$
|
17,654
|
|
|
$
|
16,588
|
|
|
$
|
48,386
|
|
|
$
|
48,198
|
|
|
|
|
|
|
|
|
|
|
(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, retirements and replacement or
write-off of leasehold improvements or equipment in the ordinary
course of business, net of gains or losses recorded associated with
the sale of company-operated stores to franchisees.
|
(c) Includes costs related to future obligations associated with the
closure or net sublease shortfall of a restaurant and lease
termination costs, 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) 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.
|
(f) Includes costs related to impairment of long-lived assets.
|
(g) Other income consists of a gain related to the write-off of
unfavorable lease liabilities related to franchise subleases which
were terminated in connection with the Company's acquisition of the
related franchise-operated restaurants.
|
|
|
|
|
|
|
|
|
|
|
|
|
Del Taco Restaurants, Inc.
|
Reconciliation of Company Restaurant Sales to Restaurant
Contribution
|
(Unaudited)
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12 Weeks Ended
|
|
36 Weeks Ended
|
|
|
|
|
September 11, 2018
|
|
September 12, 2017
|
|
September 11, 2018
|
|
September 12, 2017
|
Company restaurant sales
|
|
|
|
$
|
109,559
|
|
|
$
|
106,298
|
|
|
$
|
324,468
|
|
|
$
|
311,542
|
|
Restaurant operating expenses
|
|
|
|
|
87,746
|
|
|
|
85,891
|
|
|
|
261,654
|
|
|
|
250,620
|
|
Restaurant contribution
|
|
|
|
$
|
21,813
|
|
|
$
|
20,407
|
|
|
$
|
62,814
|
|
|
$
|
60,922
|
|
Restaurant contribution margin
|
|
|
|
|
19.9
|
%
|
|
|
19.2
|
%
|
|
|
19.4
|
%
|
|
|
19.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Del Taco Restaurants, Inc.
|
Reconciliation of Net Income and Diluted Earnings Per Share to
Adjusted Net Income and Adjusted Diluted Earnings Per Share
|
(Unaudited)
|
(In thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12 Weeks Ended
|
|
12 Weeks Ended
|
|
|
September 11, 2018
|
|
September 12, 2017
|
|
|
$
|
|
Per Share
|
|
$
|
|
Per Share
|
Net income and diluted earnings per share, as reported
|
|
$
|
5,874
|
|
|
$
|
0.15
|
|
|
$
|
5,101
|
|
|
$
|
0.13
|
Impairment of long-lived assets (a)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
Restaurant closure charges, net (b)
|
|
|
672
|
|
|
|
0.02
|
|
|
|
(16
|
)
|
|
|
—
|
Other income (c)
|
|
|
(523
|
)
|
|
|
(0.01
|
)
|
|
|
—
|
|
|
|
—
|
Tax impact of adjustment (d)
|
|
|
(40
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
Non-GAAP adjusted net income and adjusted diluted earnings per share
|
|
$
|
5,983
|
|
|
$
|
0.15
|
|
|
$
|
5,085
|
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36 Weeks Ended
|
|
36 Weeks Ended
|
|
|
September 11, 2018
|
|
September 12, 2017
|
|
|
$
|
|
Per Share
|
|
$
|
|
Per Share
|
Net income and diluted earnings per share, as reported
|
|
$
|
13,313
|
|
|
$
|
0.34
|
|
|
$
|
14,669
|
|
|
$
|
0.37
|
Impairment of long-lived assets (a)
|
|
|
1,661
|
|
|
|
0.04
|
|
|
|
—
|
|
|
|
—
|
Restaurant closure charges, net (b)
|
|
|
635
|
|
|
|
0.02
|
|
|
|
(1
|
)
|
|
|
—
|
Other income (c)
|
|
|
(523
|
)
|
|
|
(0.01
|
)
|
|
|
—
|
|
|
|
—
|
Tax impact of adjustment (d)
|
|
|
(479
|
)
|
|
|
(0.01
|
)
|
|
|
—
|
|
|
|
—
|
Non-GAAP adjusted net income and adjusted diluted earnings per share
|
|
$
|
14,607
|
|
|
$
|
0.37
|
|
|
$
|
14,668
|
|
|
$
|
0.37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Includes costs related to impairment of long-lived assets.
|
(b) Includes costs related to future obligations associated with the
closure or net sublease shortfall of a restaurant and lease
termination costs, partially offset by sublease income from leases
which are treated as deemed landlord financing.
|
(c) Other income consists of a gain related to the write-off of
unfavorable lease liabilities related to franchise subleases which
were terminated in connection with the Company's acquisition of the
related franchise-operated restaurants.
|
(d) Represents the income tax associated with the adjustments in (a)
through (c) that are deductible for income tax purposes.
|
|
|
|
|
|
|
|
|
|
|
Del Taco Restaurants, Inc.
|
Restaurant Development
|
|
|
|
|
|
|
|
|
|
|
|
12 Weeks Ended
|
|
36 Weeks Ended
|
|
|
September 11,
2018
|
|
September 12,
2017
|
|
September 11,
2018
|
|
September 12,
2017
|
Company-operated restaurant activity:
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
315
|
|
|
304
|
|
|
312
|
|
|
310
|
|
Openings
|
|
2
|
|
|
2
|
|
|
6
|
|
|
3
|
|
Closures
|
|
(3
|
)
|
|
(1
|
)
|
|
(4
|
)
|
|
(3
|
)
|
Purchased from franchisees
|
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
Sold to franchisees
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
Restaurants at end of period
|
|
317
|
|
|
305
|
|
|
317
|
|
|
305
|
|
Franchise-operated restaurant activity:
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
251
|
|
|
251
|
|
|
252
|
|
|
241
|
|
Openings
|
|
3
|
|
|
2
|
|
|
4
|
|
|
7
|
|
Closures
|
|
(1
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
Purchased from Company
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
Sold to Company
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
Restaurants at end of period
|
|
250
|
|
|
253
|
|
|
250
|
|
|
253
|
|
Total restaurant activity:
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
566
|
|
|
555
|
|
|
564
|
|
|
551
|
|
Openings
|
|
5
|
|
|
4
|
|
|
10
|
|
|
10
|
|
Closures
|
|
(4
|
)
|
|
(1
|
)
|
|
(7
|
)
|
|
(3
|
)
|
Restaurants at end of period
|
|
567
|
|
|
558
|
|
|
567
|
|
|
558
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com:
https://www.businesswire.com/news/home/20181016005979/en/
For Del Taco Restaurants, Inc.
Media:
Julia Young, 646-277-1280
julia.young@icrinc.com
or
Investor
Relations:
Raphael Gross, 203-682-8253
investor@deltaco.com
Source: Del Taco Restaurants, Inc.