Delaware | 001-36197 | 46-3340980 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit No. | Description of Exhibit |
Exhibit 99.1 | Press Release issued on March 7, 2016 announcing fourth quarter and year ended December 29, 2015 financial results |
DEL TACO RESTAURANTS, INC. | |
By: | /s/ Steven L. Brake |
Name: | Steven L. Brake |
Title: | Executive Vice President and Chief Financial Officer |
• | System-wide comparable restaurant sales growth of 5.8% and company-owned comparable restaurant sales growth of 5.9%, marking the ninth and fourteenth consecutive quarter of gains, respectively; |
◦ | Company-owned comparable restaurant sales growth comprised check growth of 6.0%, including over 2% of menu mix growth, and approximately flat transactions at (0.1%); |
• | Total revenue of $133.4 million, representing 6.1% growth from the fiscal fourth quarter of 2014; |
• | Restaurant sales of $128.1 million, representing 6.0% growth from the fiscal fourth quarter of 2014; |
• | Restaurant contribution margin, a non-GAAP financial measure, of 21.2%, an improvement of approximately 90 basis points from the fiscal fourth quarter of 2014; |
• | Net income increased to $4.8 million from a net loss of $8.1 million in the fiscal fourth quarter of 2014, representing diluted earnings (loss) per share of $0.12 and ($2.08) in the fiscal fourth quarter of 2015 and 2014, respectively; |
• | Adjusted EBITDA, a non-GAAP financial measure, of $21.2 million, representing 8.4% growth from the fiscal fourth quarter of 2014; and |
• | The opening of nine restaurants system wide, including three company-owned and six franchised restaurants. |
• | System-wide comparable restaurant sales growth of 6.3% and company-owned comparable restaurant sales growth of 6.4%; |
◦ | Company-owned comparable restaurant sales growth comprises check growth of 4.8% and transaction growth of 1.6%; |
• | Total revenue of $424.0 million, representing 7.1% growth from the prior fiscal year; |
• | Restaurant sales of $407.6 million, representing 7.0% growth from the prior fiscal year; |
• | Restaurant contribution margin, a non-GAAP financial measure, of 20.0%, an improvement of approximately 130 basis points from the prior fiscal year; |
• | Adjusted EBITDA, a non-GAAP financial measure, of $65.0 million, representing 10.4% growth from the prior fiscal year; and |
• | The opening of 12 restaurants system wide, including 6 company-owned and 6 franchised restaurants. |
• | System-wide same store sales growth of approximately 2.5% to 4.5%; |
• | Total revenue between $439 million and $449 million; |
• | Total company-owned restaurant sales between $422 million and $432 million; |
• | Restaurant contribution margin between 19.8% and 20.3%; |
• | New California minimum wage impact estimated to increase labor and related expenses by approximately $7.2 million, including preservation of appropriate wage differentials and incremental payroll taxes; |
• | General and administrative expenses of between approximately 7.9% and 8.3% of total revenue, including incremental public company costs and non-cash stock-based compensation; |
• | Adjusted EBITDA between $67.5 million and $70.0 million; |
• | Effective tax rate of approximately 40%; |
• | Diluted earnings per share of approximately $0.53 and $0.56; |
• | Fifteen to eighteen new system-wide restaurant openings, including the company-owned restaurant that opened in early January 2016; and |
• | Net capital expenditures totaling approximately $36.0 to $41.0 million including approximately $10.0 to $12.5 million for new unit construction, approximately $10.0 to $11.0 million for capitalized maintenance, approximately $10.0 to $11.5 million for discretionary investment in equipment and technology, and approximately $6.0 million for land acquisition for development after 2016. |
Del Taco Restaurants, Inc. | |||||||||
Consolidated Balance Sheet | |||||||||
(In thousands, except share and per share data) | |||||||||
Successor | Predecessor | ||||||||
December 29, 2015 | December 30, 2014 | ||||||||
Assets | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 10,194 | $ | 8,553 | |||||
Accounts and other receivables, net | 3,220 | 3,383 | |||||||
Inventories | 2,806 | 2,687 | |||||||
Prepaid expenses and other current assets | 3,545 | 3,816 | |||||||
Total current assets | 19,765 | 18,439 | |||||||
Property and equipment, net | 114,030 | 85,164 | |||||||
Goodwill | 318,275 | 281,200 | |||||||
Trademarks | 220,300 | 144,000 | |||||||
Intangible assets, net | 28,373 | 17,683 | |||||||
Other assets, net | 2,829 | 2,833 | |||||||
Total assets | $ | 703,572 | $ | 549,319 | |||||
Liabilities and shareholders' equity | |||||||||
Current liabilities: | |||||||||
Accounts payable | 16,831 | 14,645 | |||||||
Other accrued liabilities | 32,897 | 31,906 | |||||||
Current portion of long-term debt, capital lease obligations | |||||||||
and deemed landlord financing liabilities | 1,725 | 1,634 | |||||||
Total current liabilities | 51,453 | 48,185 | |||||||
Long-term debt, capital lease obligations and deemed landlord | |||||||||
financing liabilities, excluding current portion, net | 167,968 | 321,049 | |||||||
Deferred income taxes | 79,523 | 64,918 | |||||||
Warrant liability | — | 8,309 | |||||||
Other non-current liabilities | 36,251 | 25,454 | |||||||
Total liabilities | 335,195 | 467,915 | |||||||
Commitments and contingencies | |||||||||
Shareholders' equity: | |||||||||
Del Taco Holdings, Inc. (Predecessor) preferred stock, $0.01 par value; 200,000 | |||||||||
shares authorized; no shares issued and outstanding | — | — | |||||||
Del Taco Restaurants, Inc. (Successor) preferred stock, $0.0001 par value; | |||||||||
1,000,000 shares authorized; no shares issued and outstanding | — | — | |||||||
Del Taco Holdings, Inc. (Predecessor) common stock, $0.01 par value; | |||||||||
5,800,000 shares authorized; 3,907,835 shares issued and outstanding at | |||||||||
December 30, 2014 | — | 39 | |||||||
Del Taco Restaurants, Inc. (Successor) common stock, $0.0001 par value; | |||||||||
400,000,000 shares authorized; 38,802,425 shares issued and outstanding at | |||||||||
December 29, 2015 | 4 | — | |||||||
Additional paid-in capital | 372,260 | 110,941 | |||||||
Accumulated other comprehensive loss | — | (409 | ) | ||||||
Accumulated deficit | (3,887 | ) | (29,167 | ) | |||||
Total shareholders' equity | 368,377 | 81,404 | |||||||
Total liabilities and shareholders' equity | $ | 703,572 | $ | 549,319 |
Del Taco Restaurants, Inc. | |||||||||
Consolidated Statements of Comprehensive Income (Loss) | |||||||||
(Unaudited) | |||||||||
(In thousands, except share and per share data) | |||||||||
Successor | Predecessor | ||||||||
16 Weeks Ended | 16 Weeks Ended | ||||||||
December 29, 2015 | December 30, 2014 | ||||||||
Revenue: | |||||||||
Company restaurant sales | $ | 128,065 | $ | 120,852 | |||||
Franchise revenue | 4,634 | 4,156 | |||||||
Franchise sublease income | 716 | 709 | |||||||
Total revenue | 133,415 | 125,717 | |||||||
Operating expenses: | |||||||||
Restaurant operating expenses: | |||||||||
Food and paper costs | 36,696 | 34,537 | |||||||
Labor and related expenses | 37,936 | 36,855 | |||||||
Occupancy and other operating expenses | 26,310 | 24,869 | |||||||
General and administrative | 11,677 | 9,832 | |||||||
Depreciation and amortization | 6,986 | 5,452 | |||||||
Occupancy and other - franchise subleases | 703 | 675 | |||||||
Pre-opening costs | 325 | 91 | |||||||
Impairment of long-lived assets | — | 9,617 | |||||||
Restaurant closure charges, net | 1,996 | 253 | |||||||
Loss on disposal of assets | 2 | 78 | |||||||
Total operating expenses | 122,631 | 122,259 | |||||||
Income from operations | 10,784 | 3,458 | |||||||
Other expense (income), net: | |||||||||
Interest expense | 1,927 | 8,927 | |||||||
Other income | (220 | ) | — | ||||||
Transaction-related costs | 994 | 1,695 | |||||||
Change in fair value of warrant liability | — | 1,114 | |||||||
Total other expense (income), net | 2,701 | 11,736 | |||||||
Income (loss) from operations before provision (benefit) | |||||||||
for income taxes | 8,083 | (8,278 | ) | ||||||
Provision (benefit) for income taxes | 3,244 | (161 | ) | ||||||
Net income (loss) | 4,839 | (8,117 | ) | ||||||
Other comprehensive income (loss): | |||||||||
Change in fair value of interest rate cap | — | (22 | ) | ||||||
Reclassification of interest rate cap amortization | — | ||||||||
included in net (loss) income | — | 12 | |||||||
Total other comprehensive (loss) income, net | — | (10 | ) | ||||||
Comprehensive income (loss) | $ | 4,839 | $ | (8,127 | ) | ||||
Earnings (loss) per share: | |||||||||
Basic | $ | 0.12 | $ | (2.08 | ) | ||||
Diluted | $ | 0.12 | $ | (2.08 | ) | ||||
Weighted-average shares outstanding | |||||||||
Basic | 38,802,425 | 3,907,835 | |||||||
Diluted | 39,513,814 | 3,907,835 |
Del Taco Restaurants, Inc. | |||||||||||||
Consolidated Statements of Comprehensive Income (Loss) | |||||||||||||
(In thousands, except share and per share data) | |||||||||||||
Successor | Predecessor | ||||||||||||
26 Weeks Ended | 26 Weeks Ended | 52 Weeks Ended | |||||||||||
December 29, 2015 | June 30, 2015 | December 30, 2014 | |||||||||||
Revenue: | |||||||||||||
Company restaurant sales | $ | 206,939 | $ | 200,676 | $ | 380,800 | |||||||
Franchise revenue | 7,328 | 6,693 | 12,973 | ||||||||||
Franchise sublease income | 1,183 | 1,183 | 2,251 | ||||||||||
Total revenue | 215,450 | 208,552 | 396,024 | ||||||||||
Operating expenses: | |||||||||||||
Restaurant operating expenses: | |||||||||||||
Food and paper costs | 59,263 | 57,447 | 110,708 | ||||||||||
Labor and related expenses | 61,448 | 61,120 | 116,920 | ||||||||||
Occupancy and other operating expenses | 43,191 | 43,611 | 82,021 | ||||||||||
General and administrative | 17,501 | 14,850 | 28,136 | ||||||||||
Depreciation and amortization | 11,276 | 8,252 | 18,752 | ||||||||||
Occupancy and other - franchise subleases | 1,140 | 1,109 | 2,145 | ||||||||||
Pre-opening costs | 366 | 276 | 462 | ||||||||||
Impairment of long-lived assets | — | — | 9,617 | ||||||||||
Restaurant closure charges, net | 2,015 | 94 | 82 | ||||||||||
Loss (gain) on disposal of assets | 3 | 99 | (151 | ) | |||||||||
Total operating expenses | 196,203 | 186,858 | 368,692 | ||||||||||
Income from operations | 19,247 | 21,694 | 27,332 | ||||||||||
Other expense (income), net: | |||||||||||||
Interest expense | 3,652 | 11,491 | 30,895 | ||||||||||
Other income | (220 | ) | — | — | |||||||||
Transaction-related costs | 12,972 | 7,255 | 1,936 | ||||||||||
Debt modification costs | 78 | 139 | 1,241 | ||||||||||
Change in fair value of warrant liability | — | (35 | ) | 1,417 | |||||||||
Total other expense (income), net | 16,482 | 18,850 | 35,489 | ||||||||||
Income (loss) from operations before | |||||||||||||
provision for income taxes | 2,765 | 2,844 | (8,157 | ) | |||||||||
Provision for income taxes | 112 | 740 | 1,098 | ||||||||||
Net income (loss) | $ | 2,653 | $ | 2,104 | $ | (9,255 | ) | ||||||
Other comprehensive income (loss): | |||||||||||||
Change in fair value of interest rate cap | $ | — | $ | (24 | ) | $ | (125 | ) | |||||
Reclassification of interest rate cap amortization | |||||||||||||
included in net (loss) income | — | 58 | 19 | ||||||||||
Total other comprehensive income (loss), net | — | 34 | (106 | ) | |||||||||
Comprehensive income (loss) | $ | 2,653 | $ | 2,138 | $ | (9,361 | ) | ||||||
Earnings (loss) per share: | |||||||||||||
Basic | $ | 0.07 | $ | 0.38 | $ | (2.37 | ) | ||||||
Diluted | $ | 0.07 | $ | 0.37 | $ | (2.37 | ) | ||||||
Weighted-average shares outstanding: | |||||||||||||
Basic | 38,802,425 | 5,492,417 | 3,907,835 | ||||||||||
Diluted | 40,249,993 | 5,610,859 | 3,907,835 |
Del Taco Restaurants, Inc. | |||||||||
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA | |||||||||
(Unaudited) | |||||||||
(In thousands) | |||||||||
Successor | Predecessor | ||||||||
16 Weeks Ended | 16 Weeks Ended | ||||||||
December 29, 2015 | December 30, 2014 | ||||||||
Net income (loss) | $ | 4,839 | $ | (8,117 | ) | ||||
Non-GAAP adjustments: | |||||||||
Provision for income taxes | 3,244 | (161 | ) | ||||||
Interest expense | 1,927 | 8,927 | |||||||
Depreciation and amortization | 6,986 | 5,408 | |||||||
EBITDA | 16,996 | 6,057 | |||||||
Stock-based compensation expense | 1,352 | 243 | |||||||
Loss on disposal of assets | 2 | 78 | |||||||
Impairment of long-lived assets | — | 9,617 | |||||||
Restaurant closure charges, net | 1,996 | 253 | |||||||
Amortization of favorable and unfavorable lease assets and liabilities, net | (221 | ) | 44 | ||||||
Transaction-related costs | 994 | 1,695 | |||||||
Change in fair value of warrant liability | — | 1,114 | |||||||
Pre-opening costs | 325 | 91 | |||||||
Insurance reserves adjustment | — | 389 | |||||||
Other income | (220 | ) | — | ||||||
Adjusted EBITDA | $ | 21,224 | $ | 19,581 |
Del Taco Restaurants, Inc. | |||||||||||||
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA | |||||||||||||
(Unaudited) | |||||||||||||
(In thousands) | |||||||||||||
Successor | Predecessor | ||||||||||||
26 Weeks Ended | 26 Weeks Ended | 52 Weeks Ended | |||||||||||
December 29, 2015 | June 30, 2015 | December 30, 2014 | |||||||||||
Net income (loss) | $ | 2,653 | $ | 2,104 | $ | (9,255 | ) | ||||||
Non-GAAP adjustments: | |||||||||||||
Provision for income taxes | 112 | 740 | 1,098 | ||||||||||
Interest expense | 3,652 | 11,491 | 30,895 | ||||||||||
Depreciation and amortization | 11,276 | 8,249 | 18,608 | ||||||||||
EBITDA | 17,693 | 22,584 | 41,346 | ||||||||||
Stock-based compensation expense | 1,498 | 532 | 954 | ||||||||||
Loss (gain) on disposal of assets | 3 | 99 | (151 | ) | |||||||||
Impairment of long-lived assets | — | — | 9,617 | ||||||||||
Restaurant closure charges, net | 2,015 | 94 | 82 | ||||||||||
Amortization of favorable and unfavorable lease assets and liabilities, net | (364 | ) | 3 | 144 | |||||||||
Debt modification costs | 78 | 139 | 1,241 | ||||||||||
Transaction-related costs | 12,972 | 7,255 | 1,936 | ||||||||||
Change in fair value of warrant liability | — | (35 | ) | 1,417 | |||||||||
Pre-opening costs | 366 | 276 | 462 | ||||||||||
Insurance reserves adjustment | — | — | 1,800 | ||||||||||
Other income | (220 | ) | — | — | |||||||||
Adjusted EBITDA | $ | 34,041 | $ | 30,947 | $ | 58,848 |
Del Taco Restaurants, Inc. | |||||||||
Reconciliation of Company Restaurant Sales to Restaurant Contribution | |||||||||
(Unaudited) | |||||||||
(In thousands) | |||||||||
Successor | Predecessor | ||||||||
16 Weeks Ended | 16 Weeks Ended | ||||||||
December 29, 2015 | December 30, 2014 | ||||||||
Company restaurant sales | $ | 128,065 | $ | 120,852 | |||||
Restaurant operating expenses | 100,942 | 96,261 | |||||||
Restaurant contribution | $ | 27,123 | $ | 24,591 |
Del Taco Restaurants, Inc. | |||||||||||||
Reconciliation of Company Restaurant Sales to Restaurant Contribution | |||||||||||||
(Unaudited) | |||||||||||||
(In thousands) | |||||||||||||
Successor | Predecessor | ||||||||||||
26 Weeks Ended | 26 Weeks Ended | 52 Weeks Ended | |||||||||||
December 29, 2015 | June 30, 2015 | December 30, 2014 | |||||||||||
Company restaurant sales | $ | 206,939 | $ | 200,676 | $ | 380,800 | |||||||
Restaurant operating expenses | 163,902 | 162,178 | 309,649 | ||||||||||
Restaurant contribution | $ | 43,037 | $ | 38,498 | $ | 71,151 |