QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | ||||||||||
| |||||||||||
(Address of principal executive offices) | (Zip Code) | ||||||||||
(Registrant’s telephone number, including area code) |
Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Large Accelerated Filer | ¨ | x | ||||||||||||
Non-Accelerated Filer | ¨ | Smaller Reporting Company | ||||||||||||
Emerging Growth Company |
PART I. FINANCIAL INFORMATION | |||||
PART II. OTHER INFORMATION | |||||
Del Taco Restaurants, Inc. | ||||||||||||||
Consolidated Balance Sheets | ||||||||||||||
(In thousands, except share and per share data) | ||||||||||||||
September 7, 2021 | December 29, 2020 | |||||||||||||
Assets | (Unaudited) | |||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Accounts and other receivables, net | ||||||||||||||
Inventories | ||||||||||||||
Prepaid expenses and other current assets | ||||||||||||||
Assets held for sale | ||||||||||||||
Total current assets | ||||||||||||||
Property and equipment, net | ||||||||||||||
Operating lease right-of-use assets | ||||||||||||||
Goodwill | ||||||||||||||
Trademarks | ||||||||||||||
Intangible assets, net | ||||||||||||||
Other assets, net | ||||||||||||||
Total assets | $ | $ | ||||||||||||
Liabilities and shareholders’ equity | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | $ | ||||||||||||
Other accrued liabilities | ||||||||||||||
Current portion of finance lease obligations and other debt | ||||||||||||||
Current portion of operating lease liabilities | ||||||||||||||
Total current liabilities | ||||||||||||||
Long-term debt, finance lease obligations and other debt, excluding current portion, net | ||||||||||||||
Operating lease liabilities, excluding current portion | ||||||||||||||
Deferred income taxes | ||||||||||||||
Other non-current liabilities | ||||||||||||||
Total liabilities | ||||||||||||||
Commitments and contingencies (Note 15) | ||||||||||||||
Shareholders’ equity: | ||||||||||||||
Preferred stock, $ | ||||||||||||||
Common stock, $ | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Accumulated other comprehensive loss | ||||||||||||||
Accumulated deficit | ( | ( | ||||||||||||
Total shareholders’ equity | ||||||||||||||
Total liabilities and shareholders’ equity | $ | $ |
Del Taco Restaurants, Inc. | ||||||||||||||||||||||||||
Consolidated Statements of Comprehensive Income (Loss) | ||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||
(In thousands, except share and per share data) | ||||||||||||||||||||||||||
12 Weeks Ended | 36 Weeks Ended | |||||||||||||||||||||||||
September 7, 2021 | September 8, 2020 | September 7, 2021 | September 8, 2020 | |||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||
Company restaurant sales | $ | $ | $ | $ | ||||||||||||||||||||||
Franchise revenue | ||||||||||||||||||||||||||
Franchise advertising contributions | ||||||||||||||||||||||||||
Franchise sublease and other income | ||||||||||||||||||||||||||
Total revenue | ||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
Restaurant operating expenses: | ||||||||||||||||||||||||||
Food and paper costs | ||||||||||||||||||||||||||
Labor and related expenses | ||||||||||||||||||||||||||
Occupancy and other operating expenses | ||||||||||||||||||||||||||
General and administrative | ||||||||||||||||||||||||||
Franchise advertising expenses | ||||||||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||||||||
Occupancy and other - franchise subleases and other | ||||||||||||||||||||||||||
Pre-opening costs | ||||||||||||||||||||||||||
Impairment of goodwill | ||||||||||||||||||||||||||
Impairment of trademarks | ||||||||||||||||||||||||||
Impairment of long-lived assets | ||||||||||||||||||||||||||
Restaurant closure charges, net | ||||||||||||||||||||||||||
Loss on disposal of assets and adjustments to assets held for sale, net | ||||||||||||||||||||||||||
Total operating expenses | ||||||||||||||||||||||||||
Income (loss) from operations | ( | |||||||||||||||||||||||||
Other expense (income), net | ||||||||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||
Other income | ( | |||||||||||||||||||||||||
Total other expense, net | ||||||||||||||||||||||||||
Income (loss) from operations before provision (benefit) for income taxes | ( | |||||||||||||||||||||||||
Provision (benefit) for income taxes | ( | |||||||||||||||||||||||||
Net income (loss) | ( | |||||||||||||||||||||||||
Other comprehensive income: | ||||||||||||||||||||||||||
Reclassification of interest rate cap amortization included in net income (loss), net of tax | ||||||||||||||||||||||||||
Total other comprehensive income, net | ||||||||||||||||||||||||||
Comprehensive income (loss) | $ | $ | $ | $ | ( | |||||||||||||||||||||
Earnings (loss) per share: | ||||||||||||||||||||||||||
Basic | $ | $ | $ | $ | ( | |||||||||||||||||||||
Diluted | $ | $ | $ | $ | ( | |||||||||||||||||||||
Weighted-average shares outstanding | ||||||||||||||||||||||||||
Basic | ||||||||||||||||||||||||||
Diluted |
Del Taco Restaurants, Inc. | ||||||||||||||||||||||||||||||||||||||||||||
Consolidated Statements of Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
(In thousands, except share data) | ||||||||||||||||||||||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||
Additional | Other | Total | ||||||||||||||||||||||||||||||||||||||||||
Preferred | Common Stock | Paid-in | Comprehensive | Accumulated | Shareholders’ | |||||||||||||||||||||||||||||||||||||||
Stock | Shares | Amount | Capital | Loss | Deficit | Equity | ||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | — | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Comprehensive loss | ( | |||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Issuance of vested restricted stock, net of shares withheld for tax withholding | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||
Balance at March 24, 2020 | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Comprehensive loss | ( | |||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Issuance of vested restricted stock, net of shares withheld for tax withholding | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Balance at June 16, 2020 | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Comprehensive income | ||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Issuance of vested restricted stock, net of shares withheld for tax withholding | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||
Balance at September 8, 2020 | $ | — | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements. | ||||||||||||||||||||||||||||||||||||||||||||
Del Taco Restaurants, Inc. | ||||||||||||||||||||||||||||||||||||||||||||
Consolidated Statements of Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
(In thousands, except share data) | ||||||||||||||||||||||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||
Additional | Other | Total | ||||||||||||||||||||||||||||||||||||||||||
Preferred | Common Stock | Paid-in | Comprehensive | Accumulated | Shareholders’ | |||||||||||||||||||||||||||||||||||||||
Stock | Shares | Amount | Capital | Loss | Deficit | Equity | ||||||||||||||||||||||||||||||||||||||
Balance at December 29, 2020 | $ | — | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Comprehensive income | ||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Issuance of vested restricted stock, net of shares withheld for tax withholding | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | — | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
Dividends paid | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
Balance at March 23, 2021 | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Comprehensive income | ||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | — | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
Dividends paid | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
Balance at June 15, 2021 | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Comprehensive income | ||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Issuance of vested restricted stock, net of shares withheld for tax withholding | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | — | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
Common dividends | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
Balance at September 7, 2021 | $ | — | $ | $ | $ | — | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Del Taco Restaurants, Inc. | ||||||||||||||
Consolidated Statements of Cash Flows | ||||||||||||||
(Unaudited) | ||||||||||||||
(In thousands) | ||||||||||||||
36 Weeks Ended | ||||||||||||||
September 7, 2021 | September 8, 2020 | |||||||||||||
Operating activities | ||||||||||||||
Net income (loss) | $ | $ | ( | |||||||||||
Adjustments to reconcile net income (loss) to cash provided by operating activities | ||||||||||||||
Allowance for doubtful accounts | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Amortization of deferred financing costs, debt discount and interest rate cap | ||||||||||||||
Amortization of operating lease assets | ||||||||||||||
Stock-based compensation | ||||||||||||||
Impairment of goodwill | ||||||||||||||
Impairment of trademarks | ||||||||||||||
Impairment of long-lived assets | ||||||||||||||
Deferred income taxes | ( | |||||||||||||
Loss on disposal of assets and adjustments to assets held for sale, net | ||||||||||||||
Restaurant closure charges | ||||||||||||||
Other income | ( | |||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Accounts and other receivables, net | ( | |||||||||||||
Inventories | ( | |||||||||||||
Prepaid expenses and other current assets | ( | |||||||||||||
Other assets | ( | ( | ||||||||||||
Accounts payable | ( | |||||||||||||
Operating lease liabilities | ( | ( | ||||||||||||
Other accrued liabilities | ||||||||||||||
Other non-current liabilities | ( | ( | ||||||||||||
Net cash provided by operating activities | ||||||||||||||
Investing activities | ||||||||||||||
Purchases of property and equipment | ( | ( | ||||||||||||
Proceeds from disposal of property and equipment, net | ||||||||||||||
Purchases of other assets | ( | ( | ||||||||||||
Proceeds from sale of company-operated restaurants | ||||||||||||||
Net cash used in investing activities | ( | ( | ||||||||||||
Financing activities | ||||||||||||||
Repurchase of common stock | ( | |||||||||||||
Payment of tax withholding related to restricted stock vesting | ( | ( | ||||||||||||
Payments on finance leases and other debt | ( | ( | ||||||||||||
Proceeds from revolving credit facility | ||||||||||||||
Payments on revolving credit facility | ( | ( | ||||||||||||
Payment of dividends | ( | |||||||||||||
Proceeds from exercise of stock options | ||||||||||||||
Net cash used in financing activities | ( | ( | ||||||||||||
Net (decrease) increase in cash and cash equivalents | ( | |||||||||||||
Cash and cash equivalents at beginning of period | ||||||||||||||
Cash and cash equivalents at end of period | $ | $ | ||||||||||||
Supplemental cash flow information: | ||||||||||||||
Cash paid during the period for interest | $ | $ | ||||||||||||
Cash paid during the period for income taxes | ||||||||||||||
Supplemental schedule of non-cash activities: | ||||||||||||||
Accrued property and equipment purchases | $ | $ | ||||||||||||
Amortization of interest rate cap into net income, net of tax | ||||||||||||||
Operating lease right-of-use assets obtained in exchange for lease obligations | ||||||||||||||
Write-offs against bad debt reserves | ||||||||||||||
36 Weeks Ended | ||||||||||||||
September 7, 2021 | September 8, 2020 | |||||||||||||
Beginning Balance | $ | $ | ||||||||||||
Accretion | ||||||||||||||
Cash payments | ( | ( | ||||||||||||
Adjustments to estimates based on current activity | ||||||||||||||
Ending Balance | $ | $ |
36 Weeks Ended September 8, 2020 | |||||
Company-operated restaurants sold to franchisees | |||||
Proceeds from the sale of company-operated restaurants, net of selling costs | $ | ||||
Net assets sold (primarily furniture, fixtures and equipment) (a) | ( | ||||
Goodwill related to the company-operated restaurants sold to franchisees | ( | ||||
Allocation to deferred franchise fees | ( | ||||
Sublease assets, net | |||||
Gain on lease termination | |||||
Loss on sale of company-operated restaurants, net (b) | $ | ( |
September 7, 2021 | December 29, 2020 | ||||||||||
Land | $ | $ | |||||||||
Building | |||||||||||
$ | $ |
September 7, 2021 | December 29, 2020 | |||||||||||||||||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | |||||||||||||||||||||||||||||||||
Sublease assets | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
Franchise rights | ( | ( | ||||||||||||||||||||||||||||||||||||
Reacquired franchise rights | ( | ( | ||||||||||||||||||||||||||||||||||||
Total amortized other intangible assets | $ | $ | ( | $ | $ | $ | ( | $ |
September 7, 2021 | December 29, 2020 | |||||||||||||
Senior Credit Facility, as amended, net of unamortized debt discount of $ | $ | $ | ||||||||||||
Total outstanding indebtedness | ||||||||||||||
Obligations under finance leases and other debt | ||||||||||||||
Total debt | ||||||||||||||
Less: amounts due within one year | ||||||||||||||
Total amounts due after one year, net | $ | $ |
Classification | Twelve Weeks Ended September 7, 2021 | Thirty Six Weeks Ended September 7, 2021 | |||||||||||||||
Operating lease cost | Occupancy and other operating expenses, Occupancy and other - franchise subleases and other, Pre-opening costs, Restaurant closure charges, net and General and administrative | $ | $ | ||||||||||||||
Finance lease cost: | |||||||||||||||||
Amortization of right of use assets | Depreciation and amortization | ||||||||||||||||
Interest on lease liabilities | Interest expense | ||||||||||||||||
Short-term lease cost | Occupancy and other operating expenses | ||||||||||||||||
Variable lease cost | Occupancy and other operating expenses, Occupancy and other - franchise subleases and other and Restaurant closure charges, net | ||||||||||||||||
Sublease income | Franchise sublease and other income | ( | ( | ||||||||||||||
Total lease cost | $ | $ |
Classification | Twelve Weeks Ended September 8, 2020 | Thirty Six Weeks Ended September 8, 2020 | |||||||||||||||
Operating lease cost | Occupancy and other operating expenses, Occupancy and other - franchise subleases and other, Pre-opening costs, Restaurant closure charges, net and General and administrative | $ | $ | ||||||||||||||
Finance lease cost: | |||||||||||||||||
Amortization of right of use assets | Depreciation and amortization | ||||||||||||||||
Interest on lease liabilities | Interest expense | ||||||||||||||||
Short-term lease cost | Occupancy and other operating expenses | ||||||||||||||||
Variable lease cost | Occupancy and other operating expenses, Occupancy and other - franchise subleases and other and Restaurant closure charges, net | ||||||||||||||||
Sublease income | Franchise sublease and other income | ( | ( | ||||||||||||||
Total lease cost | $ | $ |
September 7, 2021 | December 29, 2020 | ||||||||||
Operating lease assets: | |||||||||||
Operating lease right-of-use assets | $ | $ | |||||||||
Operating lease liabilities: | |||||||||||
Current portion of operating lease liabilities | $ | $ | |||||||||
Operating lease liabilities, excluding current portion | |||||||||||
Total operating lease liabilities | $ | $ | |||||||||
Finance lease assets: | |||||||||||
Buildings under finance leases | $ | $ | |||||||||
Accumulated depreciation | ( | ( | |||||||||
Finance lease assets, net | $ | $ | |||||||||
Finance lease obligations: | |||||||||||
Current portion of finance lease obligations and other debt | $ | $ | |||||||||
Long-term debt, finance lease obligations and other debt, excluding current portion, net | |||||||||||
Total finance lease obligations | $ | $ |
Weighted Average Remaining Lease Term (in years) | September 7, 2021 | |||||||
Operating leases | ||||||||
Finance leases |
Weighted Average Discount Rate | September 7, 2021 | |||||||
Operating leases | % | |||||||
Finance leases | % |
Thirty Six Weeks Ended September 7, 2021 | Thirty Six Weeks Ended September 8, 2020 | ||||||||||
Cash paid for amounts in the measurement of lease liabilities: | |||||||||||
Operating cash flows used for operating leases | $ | $ | |||||||||
Operating cash flows used for finance leases | $ | $ | |||||||||
Financing cash flows used for finance leases | $ | $ |
Finance Lease Liabilities | Operating Lease Liabilities | Operating Subleases | Net Lease Commitments | |||||||||||||||||||||||
2021 | $ | $ | $ | ( | $ | |||||||||||||||||||||
2022 | ( | |||||||||||||||||||||||||
2023 | ( | |||||||||||||||||||||||||
2024 | ( | |||||||||||||||||||||||||
2025 | ( | |||||||||||||||||||||||||
Thereafter | ( | |||||||||||||||||||||||||
Total lease payments | $ | $ | $ | ( | $ | |||||||||||||||||||||
Amounts representing interest | ( | ( | ( | |||||||||||||||||||||||
Present value of lease obligations | $ | $ | $ |
September 7, 2021 | December 29, 2020 | |||||||||||||
Employee compensation and related items | $ | $ | ||||||||||||
Accrued insurance | ||||||||||||||
Accrued advertising | ||||||||||||||
Accrued sales tax | ||||||||||||||
Deferred social security taxes | ||||||||||||||
Accrued property and equipment purchases | ||||||||||||||
Accrued real property tax | ||||||||||||||
Accrued income tax | ||||||||||||||
Accrued rent and related items | ||||||||||||||
Deferred gift card income | ||||||||||||||
Other | ||||||||||||||
$ | $ |
September 7, 2021 | December 29, 2020 | |||||||||||||
Insurance reserves | $ | $ | ||||||||||||
Deferred development and initial franchise fees | ||||||||||||||
Deferred social security taxes | ||||||||||||||
Sublease liabilities | ||||||||||||||
Deferred gift card income | ||||||||||||||
Other | ||||||||||||||
$ | $ |
Shares | Weighted-Average Grant Date Fair Value | |||||||||||||
Nonvested at December 29, 2020 | $ | |||||||||||||
Granted | ||||||||||||||
Vested | ( | |||||||||||||
Forfeited | ( | |||||||||||||
Nonvested at September 7, 2021 | $ |
Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value | |||||||||||||||||||||||
(in years) | (in thousands) | |||||||||||||||||||||||||
Options outstanding at December 29, 2020 | $ | $ | ||||||||||||||||||||||||
Granted | ||||||||||||||||||||||||||
Exercised | ( | |||||||||||||||||||||||||
Forfeited/Expired | ( | |||||||||||||||||||||||||
Options outstanding at September 7, 2021 | $ | $ | ||||||||||||||||||||||||
Options exercisable at September 7, 2021 | $ | $ | ||||||||||||||||||||||||
Options exercisable and expected to vest at September 7, 2021 | $ | $ |
12 Weeks Ended | 36 Weeks Ended | ||||||||||||||||||||||
September 7, 2021 | September 8, 2020 | September 7, 2021 | September 8, 2020 | ||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net income (loss) | $ | $ | $ | $ | ( | ||||||||||||||||||
Denominator: | |||||||||||||||||||||||
Weighted-average shares outstanding - basic | |||||||||||||||||||||||
Dilutive effect of unvested restricted stock | |||||||||||||||||||||||
Dilutive effect of stock options | |||||||||||||||||||||||
Weighted-average shares outstanding - diluted | |||||||||||||||||||||||
Net income (loss) per share - basic | $ | $ | $ | $ | ( | ||||||||||||||||||
Net income (loss) per share - diluted | $ | $ | $ | $ | ( | ||||||||||||||||||
Antidilutive stock options, unvested restricted stock awards and warrants excluded from the computations |
12 Weeks Ended | 36 Weeks Ended | ||||||||||||||||||||||
September 7, 2021 | September 8, 2020 | September 7, 2021 | September 8, 2020 | ||||||||||||||||||||
Company-operated same store sales | 1.6 | % | 2.0 | % | 7.9 | % | (4.4) | % | |||||||||||||||
Franchise-operated same store sales | 2.0 | % | 6.5 | % | 10.6 | % | (1.4) | % | |||||||||||||||
System-wide same store sales | 1.8 | % | 4.1 | % | 9.2 | % | (3.0) | % |
12 Weeks Ended | 36 Weeks Ended | |||||||||||||||||||||||||
September 7, 2021 | September 8, 2020 | September 7, 2021 | September 8, 2020 | |||||||||||||||||||||||
Company-operated restaurant activity: | ||||||||||||||||||||||||||
Beginning of period | 297 | 294 | 295 | 300 | ||||||||||||||||||||||
Openings | 1 | 1 | 3 | 3 | ||||||||||||||||||||||
Closures | (1) | — | (1) | (2) | ||||||||||||||||||||||
Sold to franchisees | — | — | — | (6) | ||||||||||||||||||||||
Restaurants at end of period | 297 | 295 | 297 | 295 | ||||||||||||||||||||||
Franchise-operated restaurant activity: | ||||||||||||||||||||||||||
Beginning of period | 304 | 299 | 301 | 296 | ||||||||||||||||||||||
Openings | 3 | 4 | 8 | 5 | ||||||||||||||||||||||
Closures | (1) | (2) | (3) | (6) | ||||||||||||||||||||||
Purchased from Company | — | — | — | 6 | ||||||||||||||||||||||
Restaurants at end of period | 306 | 301 | 306 | 301 | ||||||||||||||||||||||
Total restaurant activity: | ||||||||||||||||||||||||||
Beginning of period | 601 | 593 | 596 | 596 | ||||||||||||||||||||||
Openings | 4 | 5 | 11 | 8 | ||||||||||||||||||||||
Closures | (2) | (2) | (4) | (8) | ||||||||||||||||||||||
Restaurants at end of period | 603 | 596 | 603 | 596 |
12 Weeks Ended | ||||||||||||||||||||||||||||||||||||||
September 7, 2021 | September 8, 2020 | Increase / (Decrease) | ||||||||||||||||||||||||||||||||||||
(Dollar amounts in thousands) | ($) | (%) | ($) | (%) | ($) | (%) | ||||||||||||||||||||||||||||||||
Statement of Operations Data: | ||||||||||||||||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||||||||||
Company restaurant sales | $ | 111,981 | 90.1 | % | $ | 109,522 | 90.7 | % | $ | 2,459 | 2.2 | % | ||||||||||||||||||||||||||
Franchise revenue | 5,586 | 4.5 | 5,169 | 4.3 | 417 | 8.1 | ||||||||||||||||||||||||||||||||
Franchise advertising contributions | 4,170 | 3.4 | 4,001 | 3.3 | 169 | 4.2 | ||||||||||||||||||||||||||||||||
Franchise sublease and other income | 2,534 | 2.0 | 2,090 | 1.7 | 444 | 21.2 | ||||||||||||||||||||||||||||||||
Total revenue | 124,271 | 100.0 | 120,782 | 100.0 | 3,489 | 2.9 | ||||||||||||||||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||||||||||||||||
Restaurant operating expenses: | ||||||||||||||||||||||||||||||||||||||
Food and paper costs | 29,315 | 26.2 | (1) | 29,051 | 26.5 | (1) | 264 | 0.9 | ||||||||||||||||||||||||||||||
Labor and related expenses | 37,210 | 33.2 | (1) | 35,450 | 32.4 | (1) | 1,760 | 5.0 | ||||||||||||||||||||||||||||||
Occupancy and other operating expenses | 26,989 | 24.1 | (1) | 25,302 | 23.1 | (1) | 1,687 | 6.7 | ||||||||||||||||||||||||||||||
Total restaurant operating expenses | 93,514 | 83.5 | (1) | 89,803 | 82.0 | (1) | 3,711 | 4.1 | ||||||||||||||||||||||||||||||
General and administrative | 11,218 | 9.0 | 10,841 | 9.0 | 377 | 3.5 | ||||||||||||||||||||||||||||||||
Franchise advertising expenses | 4,170 | 3.4 | 4,001 | 3.3 | 169 | 4.2 | ||||||||||||||||||||||||||||||||
Depreciation and amortization | 6,021 | 4.8 | 6,055 | 5.0 | (34) | (0.6) | ||||||||||||||||||||||||||||||||
Occupancy and other-franchise subleases and other | 2,354 | 1.9 | 1,766 | 1.5 | 588 | 33.3 | ||||||||||||||||||||||||||||||||
Pre-opening costs | 152 | 0.1 | 63 | 0.1 | 89 | 141.3 | ||||||||||||||||||||||||||||||||
Restaurant closure charges, net | 690 | 0.6 | 413 | 0.3 | 277 | 67.1 | ||||||||||||||||||||||||||||||||
Loss on disposal of assets and adjustments to assets held for sale, net | 37 | — | 140 | 0.1 | (103) | (73.6) | ||||||||||||||||||||||||||||||||
Total operating expenses | 118,156 | 95.1 | 113,082 | 93.6 | 5,074 | 4.5 | ||||||||||||||||||||||||||||||||
Income from operations | 6,115 | 4.9 | 7,700 | 6.4 | (1,585) | (20.6) | ||||||||||||||||||||||||||||||||
Other expense, net | ||||||||||||||||||||||||||||||||||||||
Interest expense | 660 | 0.5 | 941 | 0.8 | (281) | (29.9) | ||||||||||||||||||||||||||||||||
Total other expense, net | 660 | 0.5 | 941 | 0.8 | (281) | (29.9) | ||||||||||||||||||||||||||||||||
Income from operations before provision for income taxes | 5,455 | 4.4 | 6,759 | 5.6 | (1,304) | (19.3) | ||||||||||||||||||||||||||||||||
Provision for income taxes | 1,617 | 1.3 | 962 | 0.8 | 655 | 68.1 | ||||||||||||||||||||||||||||||||
Net income | $ | 3,838 | 3.1 | % | $ | 5,797 | 4.8 | % | $ | (1,959) | (33.8) | % |
36 Weeks Ended | ||||||||||||||||||||||||||||||||||||||
September 7, 2021 | September 8, 2020 | Increase / (Decrease) | ||||||||||||||||||||||||||||||||||||
(Dollar amounts in thousands) | ($) | (%) | ($) | (%) | ($) | (%) | ||||||||||||||||||||||||||||||||
Statement of Operations Data: | ||||||||||||||||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||||||||||
Company restaurant sales | $ | 328,563 | 90.1 | % | $ | 305,116 | 91.0 | % | $ | 23,447 | 7.7 | % | ||||||||||||||||||||||||||
Franchise revenue | 16,395 | 4.5 | 14,080 | 4.2 | 2,315 | 16.4 | ||||||||||||||||||||||||||||||||
Franchise advertising contributions | 12,184 | 3.3 | 9,995 | 3.0 | 2,189 | 21.9 | ||||||||||||||||||||||||||||||||
Franchise sublease and other income | 7,631 | 2.1 | 5,971 | 1.8 | 1,660 | 27.8 | ||||||||||||||||||||||||||||||||
Total revenue | 364,773 | 100.0 | 335,162 | 100.0 | 29,611 | 8.8 | ||||||||||||||||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||||||||||||||||
Restaurant operating expenses: | ||||||||||||||||||||||||||||||||||||||
Food and paper costs | 84,764 | 25.8 | (1) | 82,988 | 27.2 | (1) | 1,776 | 2.1 | ||||||||||||||||||||||||||||||
Labor and related expenses | 109,932 | 33.5 | (1) | 101,995 | 33.4 | (1) | 7,937 | 7.8 | ||||||||||||||||||||||||||||||
Occupancy and other operating expenses | 77,436 | 23.6 | (1) | 72,099 | 23.6 | (1) | 5,337 | 7.4 | ||||||||||||||||||||||||||||||
Total restaurant operating expenses | 272,132 | 82.8 | (1) | 257,082 | 84.3 | (1) | 15,050 | 5.9 | ||||||||||||||||||||||||||||||
General and administrative | 33,861 | 9.3 | 30,139 | 9.0 | 3,722 | 12.3 | ||||||||||||||||||||||||||||||||
Franchise advertising expenses | 12,184 | 3.3 | 9,995 | 3.0 | 2,189 | 21.9 | ||||||||||||||||||||||||||||||||
Depreciation and amortization | 17,952 | 4.9 | 18,477 | 5.5 | (525) | (2.8) | ||||||||||||||||||||||||||||||||
Occupancy and other-franchise subleases and other | 7,324 | 2.0 | 5,088 | 1.5 | 2,236 | 43.9 | ||||||||||||||||||||||||||||||||
Pre-opening costs | 407 | 0.1 | 359 | 0.1 | 48 | 13.4 | ||||||||||||||||||||||||||||||||
Impairment of goodwill | — | — | 87,277 | 26.0 | (87,277) | (100.0) | ||||||||||||||||||||||||||||||||
Impairment of trademarks | — | — | 11,900 | 3.6 | (11,900) | (100.0) | ||||||||||||||||||||||||||||||||
Impairment of long-lived assets | — | — | 8,287 | 2.5 | (8,287) | (100.0) | ||||||||||||||||||||||||||||||||
Restaurant closure charges, net | 1,488 | 0.4 | 1,406 | 0.4 | 82 | 5.8 | ||||||||||||||||||||||||||||||||
Loss on disposal of assets and adjustments to assets held for sale, net | 91 | — | 697 | 0.2 | (606) | (86.9) | ||||||||||||||||||||||||||||||||
Total operating expenses | 345,439 | 94.7 | 430,707 | 128.5 | (85,268) | (19.8) | ||||||||||||||||||||||||||||||||
Income (loss) from operations | 19,334 | 5.3 | (95,545) | (28.5) | 114,879 | (120.2) | ||||||||||||||||||||||||||||||||
Other expense, net | ||||||||||||||||||||||||||||||||||||||
Interest expense | 2,082 | 0.6 | 3,730 | 1.1 | (1,648) | (44.2) | ||||||||||||||||||||||||||||||||
Other income | (373) | (0.1) | — | — | (373) | * | ||||||||||||||||||||||||||||||||
Total other expense, net | 1,709 | 0.5 | 3,730 | 1.1 | (2,021) | (54.2) | ||||||||||||||||||||||||||||||||
Income (loss) from operations before provision (benefit) for income taxes | 17,625 | 4.8 | (99,275) | (29.6) | 116,900 | (117.8) | ||||||||||||||||||||||||||||||||
Provision (benefit) for income taxes | 5,154 | 1.4 | (2,028) | (0.6) | 7,182 | (354.1) | ||||||||||||||||||||||||||||||||
Net income (loss) | $ | 12,471 | 3.4 | % | $ | (97,247) | (29.0) | % | $ | 109,718 | (112.8) | % |
36 Weeks Ended | ||||||||||||||
September 7, 2021 | September 8, 2020 | |||||||||||||
Net cash provided by (used in) | ||||||||||||||
Operating activities | $ | 35,537 | $ | 39,523 | ||||||||||
Investing activities | (17,157) | (13,431) | ||||||||||||
Financing activities | (22,908) | (22,154) | ||||||||||||
Net (decrease) increase in cash | $ | (4,528) | $ | 3,938 |
12 Weeks Ended | 36 Weeks Ended | |||||||||||||||||||||||||
September 7, 2021 | September 8, 2020 | September 7, 2021 | September 8, 2020 | |||||||||||||||||||||||
Company restaurant sales | $ | 111,981 | $ | 109,522 | $ | 328,563 | $ | 305,116 | ||||||||||||||||||
Restaurant operating expenses | 93,514 | 89,803 | 272,132 | 257,082 | ||||||||||||||||||||||
Restaurant contribution | $ | 18,467 | $ | 19,719 | $ | 56,431 | $ | 48,034 | ||||||||||||||||||
Restaurant contribution margin | 16.5 | % | 18.0 | % | 17.2 | % | 15.7 | % |
12 Weeks Ended | 36 Weeks Ended | |||||||||||||||||||||||||
September 7, 2021 | September 8, 2020 | September 7, 2021 | September 8, 2020 | |||||||||||||||||||||||
Income (loss) from operations | $ | 6,115 | $ | 7,700 | $ | 19,334 | $ | (95,545) | ||||||||||||||||||
Less: | ||||||||||||||||||||||||||
Franchise revenue | (5,586) | (5,169) | (16,395) | (14,080) | ||||||||||||||||||||||
Franchise advertising contributions | (4,170) | (4,001) | (12,184) | (9,995) | ||||||||||||||||||||||
Franchise sublease income and other | (2,534) | (2,090) | (7,631) | (5,971) | ||||||||||||||||||||||
Plus: | ||||||||||||||||||||||||||
General and administrative | 11,218 | 10,841 | 33,861 | 30,139 | ||||||||||||||||||||||
Franchise advertising expenses | 4,170 | 4,001 | 12,184 | 9,995 | ||||||||||||||||||||||
Depreciation and amortization | 6,021 | 6,055 | 17,952 | 18,477 | ||||||||||||||||||||||
Occupancy and other - franchise subleases and other | 2,354 | 1,766 | 7,324 | 5,088 | ||||||||||||||||||||||
Pre-opening costs | 152 | 63 | 407 | 359 | ||||||||||||||||||||||
Impairment of goodwill | — | — | — | 87,277 | ||||||||||||||||||||||
Impairment of trademarks | — | — | — | 11,900 | ||||||||||||||||||||||
Impairment of long-lived assets | — | — | — | 8,287 | ||||||||||||||||||||||
Restaurant closure charges, net | 690 | 413 | 1,488 | 1,406 | ||||||||||||||||||||||
Loss on disposal of assets and adjustments to assets held for sale, net | 37 | 140 | 91 | 697 | ||||||||||||||||||||||
Restaurant contribution | $ | 18,467 | $ | 19,719 | $ | 56,431 | $ | 48,034 | ||||||||||||||||||
Company restaurant sales | $ | 111,981 | $ | 109,522 | $ | 328,563 | $ | 305,116 | ||||||||||||||||||
Restaurant contribution margin | 16.5 | % | 18.0 | % | 17.2 | % | 15.7 | % |
12 Weeks Ended | 36 Weeks Ended | |||||||||||||||||||||||||
September 7, 2021 | September 8, 2020 | September 7, 2021 | September 8, 2020 | |||||||||||||||||||||||
Net income (loss) | $ | 3,838 | $ | 5,797 | $ | 12,471 | $ | (97,247) | ||||||||||||||||||
Non-GAAP adjustments: | ||||||||||||||||||||||||||
Provision (benefit) for income taxes | 1,617 | 962 | 5,154 | (2,028) | ||||||||||||||||||||||
Interest expense | 660 | 941 | 2,082 | 3,730 | ||||||||||||||||||||||
Depreciation and amortization | 6,021 | 6,055 | 17,952 | 18,477 | ||||||||||||||||||||||
EBITDA | 12,136 | 13,755 | 37,659 | (77,068) | ||||||||||||||||||||||
Stock-based compensation expense (a) | 1,427 | 1,267 | 4,346 | 3,905 | ||||||||||||||||||||||
Loss on disposal of assets and adjustments to assets held for sale, net (b) | 37 | 140 | 91 | 697 | ||||||||||||||||||||||
Impairment of goodwill (c) | — | — | — | 87,277 | ||||||||||||||||||||||
Impairment of trademarks (d) | — | — | — | 11,900 | ||||||||||||||||||||||
Impairment of long-lived assets (e) | — | — | — | 8,287 | ||||||||||||||||||||||
Restaurant closure charges, net (f) | 690 | 413 | 1,488 | 1,406 | ||||||||||||||||||||||
Amortization of favorable and unfavorable lease assets and liabilities, net (g) | (72) | (70) | (243) | (185) | ||||||||||||||||||||||
Pre-opening costs (h) | 152 | 63 | 407 | 359 | ||||||||||||||||||||||
Sublease income for closed restaurants (i) | (282) | (247) | (807) | (745) | ||||||||||||||||||||||
Executive transition costs (j) | — | — | — | 287 | ||||||||||||||||||||||
Other income (k) | — | — | (373) | — | ||||||||||||||||||||||
Adjusted EBITDA | $ | 14,088 | $ | 15,321 | $ | 42,568 | $ | 36,120 |
Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced programs | Maximum dollar value that may yet be purchased under these programs | |||||||||||||||||||||||
June 16, 2021 - July 13, 2021 | 536,137 | (1) | $ | 9.93 | 368,678 | $ | 11,383,926 | |||||||||||||||||||
July 14, 2021 - August 10, 2021 | 80,646 | $ | 9.77 | 80,646 | $ | 10,596,013 | ||||||||||||||||||||
August 11, 2021 - September 7, 2021 | — | $ | — | — | $ | 10,596,013 | ||||||||||||||||||||
Total | 616,783 |
Exhibit No. | Description | |||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
32.2 | ||||||||
101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | |||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
DEL TACO RESTAURANTS, INC. | ||
Date: October 15, 2021 | ||
/s/ John D. Cappasola, Jr. | ||
Name: John D. Cappasola, Jr. | ||
Title: President and Chief Executive Officer | ||
(principal executive officer) | ||
/s/ Steven L. Brake | ||
Name: Steven L. Brake | ||
Title: Executive Vice President and Chief Financial Officer | ||
(principal financial officer) |
Date: October 15, 2021 | ||
/s/ John D. Cappasola, Jr. | ||
John D. Cappasola, Jr. | ||
President and Chief Executive Officer | ||
(principal executive officer) |
Date: October 15, 2021 | ||
/s/ Steven L. Brake | ||
Steven L. Brake | ||
Executive Vice President and Chief Financial Officer | ||
(principal financial officer) |
Date: October 15, 2021 | ||
/s/ John D. Cappasola, Jr. | ||
John D. Cappasola, Jr. | ||
President and Chief Executive Officer | ||
(principal executive officer) |
Date: October 15, 2021 | ||
/s/ Steven L. Brake | ||
Steven L. Brake | ||
Executive Vice President and Chief Financial Officer | ||
(principal financial officer) |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Sep. 07, 2021 |
Dec. 29, 2020 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 400,000,000 | 400,000,000 |
Common stock, shares issued (in shares) | 36,392,418 | 36,828,237 |
Common stock, shares outstanding (in shares) | 36,392,418 | 36,828,237 |
Consolidated Statements of Comprehensive (Loss) Income - USD ($) |
3 Months Ended | 8 Months Ended | ||
---|---|---|---|---|
Sep. 07, 2021 |
Sep. 08, 2020 |
Sep. 07, 2021 |
Sep. 08, 2020 |
|
Revenue: | ||||
Total revenue | $ 124,271,000 | $ 120,782,000 | $ 364,773,000 | $ 335,162,000 |
Restaurant operating expenses: | ||||
Labor and related expenses | 37,210,000 | 35,450,000 | 109,932,000 | 101,995,000 |
Occupancy and other operating expenses | 26,989,000 | 25,302,000 | 77,436,000 | 72,099,000 |
General and administrative | 11,218,000 | 10,841,000 | 33,861,000 | 30,139,000 |
Franchise advertising expenses | 4,170,000 | 4,001,000 | 12,184,000 | 9,995,000 |
Depreciation and amortization | 6,021,000 | 6,055,000 | 17,952,000 | 18,477,000 |
Occupancy and other - franchise subleases and other | 2,354,000 | 1,766,000 | 7,324,000 | 5,088,000 |
Pre-opening costs | 152,000 | 63,000 | 407,000 | 359,000 |
Impairment of goodwill | 0 | 0 | 0 | 87,277,000 |
Impairment of trademarks | 0 | 0 | 0 | 11,900,000 |
Impairment of long-lived assets | 0 | 0 | 0 | 8,287,000 |
Restaurant closure charges, net | 690,000 | 413,000 | 1,488,000 | 1,406,000 |
Loss on disposal of assets and adjustments to assets held for sale, net | 37,000 | 140,000 | 91,000 | 697,000 |
Total operating expenses | 118,156,000 | 113,082,000 | 345,439,000 | 430,707,000 |
Income (loss) from operations | 6,115,000 | 7,700,000 | 19,334,000 | (95,545,000) |
Other expense (income), net | ||||
Interest expense | 660,000 | 941,000 | 2,082,000 | 3,730,000 |
Other income | 0 | 0 | (373,000) | 0 |
Total other expense, net | 660,000 | 941,000 | 1,709,000 | 3,730,000 |
Income (loss) from operations before provision (benefit) for income taxes | 5,455,000 | 6,759,000 | 17,625,000 | (99,275,000) |
Provision (benefit) for income taxes | 1,617,000 | 962,000 | 5,154,000 | (2,028,000) |
Net income (loss) | 3,838,000 | 5,797,000 | 12,471,000 | (97,247,000) |
Other comprehensive income: | ||||
Reclassification of interest rate cap amortization included in net income (loss), net of tax | 0 | 0 | 0 | 52,000 |
Total other comprehensive income, net | 0 | 0 | 0 | 52,000 |
Comprehensive income (loss) | $ 3,838,000 | $ 5,797,000 | $ 12,471,000 | $ (97,195,000) |
Earnings (loss) per share: | ||||
Basic (in dollars per share) | $ 0.11 | $ 0.16 | $ 0.34 | $ (2.62) |
Diluted (in dollars per share) | $ 0.10 | $ 0.15 | $ 0.34 | $ (2.62) |
Weighted-average shares outstanding | ||||
Basic (in shares) | 36,455,883 | 37,293,390 | 36,642,380 | 37,152,419 |
Diluted (in shares) | 36,786,635 | 37,420,043 | 37,082,007 | 37,152,419 |
Company restaurant sales | ||||
Revenue: | ||||
Revenue | $ 111,981,000 | $ 109,522,000 | $ 328,563,000 | $ 305,116,000 |
Franchise revenue | ||||
Revenue: | ||||
Revenue | 5,586,000 | 5,169,000 | 16,395,000 | 14,080,000 |
Franchise advertising contributions | ||||
Revenue: | ||||
Revenue | 4,170,000 | 4,001,000 | 12,184,000 | 9,995,000 |
Franchise sublease and other income | ||||
Revenue: | ||||
Revenue | 2,534,000 | 2,090,000 | 7,631,000 | 5,971,000 |
Food and paper costs | ||||
Restaurant operating expenses: | ||||
Cost, Direct Material | $ 29,315,000 | $ 29,051,000 | $ 84,764,000 | $ 82,988,000 |
Description of Business |
8 Months Ended |
---|---|
Sep. 07, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of BusinessDel Taco Restaurants, Inc. is a Delaware corporation headquartered in Lake Forest, California. The consolidated financial statements include the accounts of Del Taco Restaurants, Inc. and its wholly owned subsidiaries (collectively, the “Company” or “Del Taco”). The Company develops, franchises, owns, and operates Del Taco quick-service Mexican-American restaurants. At September 7, 2021, there were 297 company-operated and 306 franchise-operated Del Taco restaurants located in 16 states, including one franchise-operated unit in Guam. At September 8, 2020, there were 295 company-operated and 301 franchise-operated Del Taco restaurants located in 15 states, including one franchise-operated unit in Guam. |
Basis of Presentation and Summary of Significant Accounting Policies |
8 Months Ended |
---|---|
Sep. 07, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited consolidated financial statements included herein have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). For additional information, these unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 29, 2020 ("2020 Form 10-K"). The Company’s fiscal year ends on the Tuesday closest to December 31. Fiscal year 2021 is a fifty-two week period ending December 28, 2021. Fiscal year 2020 is the fifty-two week period ended December 29, 2020. In a fifty-two week fiscal year, the first, second and third quarters each include twelve weeks of operations and the fourth quarter includes sixteen weeks of operations. For fiscal year 2021, the Company’s accompanying financial statements reflect the twelve weeks ended September 7, 2021. For fiscal year 2020, the Company’s accompanying financial statements reflect the twelve weeks ended September 8, 2020. In the opinion of management, the accompanying consolidated financial statements reflect all adjustments which are necessary for a fair presentation of the consolidated financial position, results of operations and cash flows for the periods presented. The results of operations for such interim periods are not necessarily indicative of results of operations to be expected for the full fiscal year. Principles of Consolidation The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly and majority owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Management believes that such estimates have been based on reasonable and supportable assumptions and the resulting estimates are reasonable for use in the preparation of the consolidated financial statements. Actual results could differ from these estimates. The Company’s significant estimates include estimates for impairment of goodwill, intangible assets and property and equipment, valuations provided in business combinations, insurance reserves, restaurant closure reserves, stock-based compensation, contingent liabilities, certain leasing activities and income tax valuation allowances. Recently Adopted Accounting Standards In December 2019, the Financial Accounting Standard Board ("FASB") issued Accounting Standards Update ("ASU") 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing the following exceptions: (1) exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or gain from other items; (2) exception to the requirement to recognize a deferred tax liability for equity method investments when a subsidiary becomes an equity method investment; and (3) exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. Furthermore, ASU 2019-12 simplifies the accounting for income taxes by doing the following: (1) requiring that an entity recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax; (2) requiring that an entity evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction; (3) specifying that an entity is not required to allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements; and (4) requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The Company adopted the requirements of this new standard on December 30, 2020, the first day of fiscal year 2021, utilizing the prospective approach. There was no material impact on the Company's consolidated financial statements and related disclosures as a result of adopting this standard. Summary of Significant Accounting Policies There have been no changes to our significant accounting policies described in the 2020 Form 10-K filed with the SEC on March 11, 2021 that have had a material impact on our consolidated financial statements and related notes.
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Impairment of Long-Lived Assets and Restaurant Closure Charges |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impairment of Long-Lived Assets and Restaurant Closure Charges | Impairment of Long-Lived Assets and Restaurant Closure Charges Impairment of Long-Lived Assets The Company evaluates long-lived assets for indicators of impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company considers a triggering event to have occurred related to a specific restaurant if the restaurant’s cash flows are less than a minimum threshold. Long-lived assets are grouped and evaluated for impairment at the lowest level for which there are identifiable cash flows that are independent of the cash flows of other groups of assets. The Company evaluates such cash flows for individual restaurants and franchise agreements on an undiscounted basis. If it is determined that the carrying amounts of such long-lived assets are not recoverable, the assets are written down to their estimated fair values. The Company generally estimates fair value using the discounted value of the estimated cash flows associated with the respective restaurant or agreement, using Level 3 inputs. The impairment charges represent the excess of the aggregate carrying value of a restaurant's operating lease right-of-use asset, furniture, fixtures and equipment and leasehold improvements over their estimated fair value. Impairment charges are allocated to a restaurant's operating lease right-of-use assets, furniture, fixtures and equipment and leasehold improvements on a pro rata basis based on the respective assets' carrying values. No impairment charges were recorded during the twelve and thirty-six weeks ended September 7, 2021. During the twelve and thirty-six weeks ended September 8, 2020, the Company evaluated certain restaurants having indicators of impairment based on operating performance, taking into consideration the negative impact of the COVID-19 pandemic on forecasted restaurant performance, which resulted in elevated impairment charges for the thirty-six weeks ended September 8, 2020. As a result, the Company recorded a non-cash impairment charge totaling $8.3 million during the thirty-six weeks ended September 8, 2020 related to eight restaurants based on the estimate of future recoverable cash flows. Restaurant Closure Charges, Net The restaurant closure liability was $0.4 million and $0.5 million at September 7, 2021 and December 29, 2020, respectively, and relates to the non-lease executory costs associated with company-operated restaurants that were closed during the fourth quarter of 2015. A summary of the restaurant closure liability activity for these closed restaurants consisted of the following (in thousands):
The current portion of the restaurant closure liability was $0.2 million as of both September 7, 2021 and December 29, 2020 and is included in other accrued liabilities in the consolidated balance sheets. The non-current portion of the restaurant closure liability was $0.2 million and $0.3 million as of September 7, 2021 and December 29, 2020, respectively, and is included in other non-current liabilities in the consolidated balance sheets. The restaurant closure liability is expected to be settled by 2032.
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Summary of Refranchising and Franchise Acquisitions |
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Franchise Acquisitions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Refranchising and Franchise Acquisitions | Refranchising and Assets Held for Sale Refranchising In connection with the sale of company-operated restaurants to franchisees, the Company typically enters into several agreements, in addition to an asset purchase agreement, with franchisees including franchise and lease agreements. The Company typically sells the restaurants’ inventory and equipment and retains ownership of the leasehold interest on the real estate to sublease to the franchisee. The Company has determined that its restaurant dispositions usually represent multiple-element arrangements, and as a result, the cash consideration received is allocated to the separate elements based on their relative selling price. Cash consideration generally includes up-front consideration for the sale of the restaurants and franchise fees and future cash consideration for royalties and lease payments. The Company considers the future lease payments in allocating the initial cash consideration received. The Company compares the stated rent under the lease and/or sublease agreements with comparable market rents, and the Company records sublease assets/liabilities with a corresponding offset to the gain or loss on the sale of the company-operated restaurants. Sublease assets represent subleases with stated rent above comparable market rents. Sublease assets are amortized to sublease income over the term of the related sublease. Sublease liabilities represent subleases with stated rent below comparable market rents and are amortized to sublease income over the term of the related sublease. Both sublease assets and sublease liabilities arise from the sale of company-operated restaurants to franchisees. The cash consideration per restaurant for franchise fees is consistent with the amounts stated in the related franchise agreements, which are also charged for separate standalone arrangements. The Company initially defers and subsequently recognizes the franchise fees over the term of the franchise agreement. Future royalty income is recognized in franchise revenue as earned. The Company did not sell any company-operated restaurants to franchisees during the thirty-six ended September 7, 2021. The Company sold six company-operated restaurants to franchisees during the thirty-six weeks ended September 8, 2020. The following table summarizes the net loss recognized related to this transaction (dollars in thousands):
(a) Of the net assets sold during the thirty-six weeks ended September 8, 2020, $0.7 million was included in assets held for sale as of December 31, 2019. (b) Of the loss related to the six company-operated restaurants sold during the thirty-six weeks ended September 8, 2020, $0.6 million was previously recognized during the fifty-two weeks ended December 31, 2019 as a fair value adjustment to the assets held for sale balance. The loss on sale of company-operated restaurants is included in loss on disposal of assets and adjustments to assets held for sale, net on the consolidated statements of comprehensive income (loss). Assets Held for Sale Assets held for sale includes the net book value of property and equipment related to company-operated restaurants that the Company plans to sell within the next year to franchisees or other third parties. Long-lived assets that meet the held for sale criteria are held for sale and reported at the lower of their carrying value or fair value less estimated costs to sell. As of September 7, 2021, the Company classified the land and building related to a previously closed company-operated restaurant as held for sale. During the thirty-six weeks ended September 7, 2021, the Company recorded a $27,000 adjustment to assets held for sale in order to recognize the assets at their estimated fair value less estimated costs to sell. The estimated fair value of assets held for sale is based upon Level 2 inputs, which include a sale agreement. Assets held for sale at September 7, 2021 and December 29, 2020 consisted of the following (in thousands):
Subsequent to September 7, 2021, the Company completed the sale of the assets with a sales price of $1.55 million and commissions and closing costs of $83,000.
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Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill was $109.0 million as of both September 7, 2021 and December 29, 2020. Since June 30, 2015, the date of the business combination between Del Taco and Levy Acquisition Corporation, accumulated goodwill impairment losses were $205.6 million as of both September 7, 2021 and December 29, 2020. The carrying value of trademarks was $208.4 million as of both September 7, 2021 and December 29, 2020. The Company’s other intangible assets at September 7, 2021 and December 29, 2020 consisted of the following (in thousands):
During the thirty-six weeks ended September 7, 2021, the Company wrote off $0.1 million of franchise rights associated with the closure of two franchise-operated restaurants.
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Debt, Obligations Under Capital Leases and Deemed Landlord Financing Liabilities |
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Debt, Obligations Under Capital Leases and Deemed Landlord Financing Liabilities | Debt and Obligations Under Finance Leases The Company’s long-term debt, finance lease obligations and other debt at September 7, 2021 and December 29, 2020 consisted of the following (in thousands):
At September 7, 2021 and December 29, 2020, the Company assessed the amounts recorded under the Senior Credit Facility and determined that such amounts approximated fair value. As a result of the modification of a lease from a finance lease to an operating lease during the thirty-six weeks ended September 7, 2021, the Company wrote off a finance lease obligation of approximately $36,000 and the related finance lease asset with a net book value of approximately $37,000. The net difference of approximately $1,000 was carried over to the new operating lease right-of-use asset. Senior Credit Facility On August 4, 2015, the Company refinanced its then existing senior credit facility and entered into a new credit agreement (the “Senior Credit Facility”). The Senior Credit Facility, which was to mature on August 4, 2020, provided for a $250 million revolving credit facility. In September 2019, the Company refinanced the Senior Credit Facility, pursuant to Amendment No. 4 to the Credit Agreement among Del Taco, as borrower, the Company and its subsidiaries, as guarantors, Bank of America, N.A. as administrative agent and letter of credit issuer, the lenders party thereto, and other parties thereto, which provides for a $250 million five-year senior secured revolving facility. The Senior Credit Facility, as amended, includes a sub limit of $35 million for letters of credit. The Senior Credit Facility, as amended, will mature on September 19, 2024. The Senior Credit Facility, as amended, contains certain financial covenants, including the maintenance of a consolidated total lease adjusted leverage ratio and a consolidated fixed charge coverage ratio. The Company was in compliance with the financial covenants as of September 7, 2021. Substantially all of the assets of the Company are pledged as collateral under the Senior Credit Facility. At September 7, 2021, the weighted-average interest rate on the outstanding balance of the Senior Credit Facility, as amended, was 1.61%. At September 7, 2021, the Company had a total of $130.6 million of availability for additional borrowings under the Senior Credit Facility, as amended, as the Company had $106.0 million of outstanding borrowings and $13.4 million of letters of credit outstanding, which reduce availability under the Senior Credit Facility, as amended.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases The Company's material leases consist of restaurant locations and its executive offices with expiration dates through 2044. In general, the leases have remaining terms of 1-20 years, most of which include options to extend the leases for additional five-year periods. The lease term is generally the minimum noncancelable period of the lease. The Company does not include option periods unless the Company determines that it is reasonably certain of exercising the option at inception or when a triggering event occurs. The Company has subleased certain properties to other third parties where the Company remains primarily liable to the landlord for the performance of all obligations in the event that the sublessee does not perform its obligations under the lease. As a result of the sublease arrangements, future rental commitments under operating leases will be offset by sublease amounts to be paid by the sublessee. In general, the terms of the sublease are similar to the terms of the master lease. The components of lease cost for the twelve and thirty-six weeks ended September 7, 2021 were as follows (in thousands):
The components of lease cost for the twelve and thirty-six weeks ended September 8, 2020 were as follows (in thousands):
Supplemental balance sheet information related to the Company's operating and finance leases (noting the financial statement caption each is included with) as of September 7, 2021 and December 29, 2020 was as follows (in thousands):
As a result of the modification of a lease from a finance lease to an operating lease during the thirty-six weeks ended September 7, 2021, the Company wrote off a finance lease asset with a net book value of approximately $37,000 and the related finance lease obligation of approximately $36,000. The net difference of approximately $1,000 was carried over to the new operating lease right-of-use asset.
Supplemental cash flow information related to leases was as follows (in thousands):
The estimated future lease payments as of September 7, 2021 are as follows (in thousands):
During the thirty-six weeks ended September 8, 2020, the Company entered into one sale-leaseback arrangement with a third party private investor. The sale-leaseback transaction does not provide for any continuing involvement by the Company other than a normal lease where the Company intends to use the property during the lease term. The lease has been accounted for as an operating lease. The net proceeds from the transaction totaled approximately $1.4 million. Under the arrangement, the Company sold the land and building of an existing restaurant and leased it back for a term of 20 years. The sale of this property resulted in a gain of approximately $0.6 million which is included in loss on disposal of assets and adjustments to assets held for sale, net in the consolidated statements of comprehensive income (loss). During the thirty-six weeks ended September 8, 2020, following the sale of a company-operated restaurant to a franchisee, the related lease was assigned to the franchisee. The Company is a guarantor on the lease which has a remaining term of 18 years, expiring in 2039, and remaining lease payments total approximately $1.5 million. The Company would remain a guarantor of the lease in the event the lease is extended for any established renewal periods. As of September 7, 2021, the Company does not anticipate any material defaults under the forgoing lease, and therefore, no liability has been provided. Additionally, another Del Taco franchisee has a direct sublease with a third party where the Company is a guarantor on the sublease. The lease has a remaining term of 10 years, expiring in 2031, and remaining lease payments total approximately $1.4 million. The Company would remain a guarantor of the lease in the event the lease is extended for any established renewal periods. In 2019, the franchisee defaulted on the lease payments. The Company had a liability of $0.1 million as of both September 7, 2021 and December 29, 2020, representing the fair value of the guarantee obligation that the Company will be liable for until it is able to find a new franchisee or convert the restaurant to a company-operated restaurant.
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Leases | Leases The Company's material leases consist of restaurant locations and its executive offices with expiration dates through 2044. In general, the leases have remaining terms of 1-20 years, most of which include options to extend the leases for additional five-year periods. The lease term is generally the minimum noncancelable period of the lease. The Company does not include option periods unless the Company determines that it is reasonably certain of exercising the option at inception or when a triggering event occurs. The Company has subleased certain properties to other third parties where the Company remains primarily liable to the landlord for the performance of all obligations in the event that the sublessee does not perform its obligations under the lease. As a result of the sublease arrangements, future rental commitments under operating leases will be offset by sublease amounts to be paid by the sublessee. In general, the terms of the sublease are similar to the terms of the master lease. The components of lease cost for the twelve and thirty-six weeks ended September 7, 2021 were as follows (in thousands):
The components of lease cost for the twelve and thirty-six weeks ended September 8, 2020 were as follows (in thousands):
Supplemental balance sheet information related to the Company's operating and finance leases (noting the financial statement caption each is included with) as of September 7, 2021 and December 29, 2020 was as follows (in thousands):
As a result of the modification of a lease from a finance lease to an operating lease during the thirty-six weeks ended September 7, 2021, the Company wrote off a finance lease asset with a net book value of approximately $37,000 and the related finance lease obligation of approximately $36,000. The net difference of approximately $1,000 was carried over to the new operating lease right-of-use asset.
Supplemental cash flow information related to leases was as follows (in thousands):
The estimated future lease payments as of September 7, 2021 are as follows (in thousands):
During the thirty-six weeks ended September 8, 2020, the Company entered into one sale-leaseback arrangement with a third party private investor. The sale-leaseback transaction does not provide for any continuing involvement by the Company other than a normal lease where the Company intends to use the property during the lease term. The lease has been accounted for as an operating lease. The net proceeds from the transaction totaled approximately $1.4 million. Under the arrangement, the Company sold the land and building of an existing restaurant and leased it back for a term of 20 years. The sale of this property resulted in a gain of approximately $0.6 million which is included in loss on disposal of assets and adjustments to assets held for sale, net in the consolidated statements of comprehensive income (loss). During the thirty-six weeks ended September 8, 2020, following the sale of a company-operated restaurant to a franchisee, the related lease was assigned to the franchisee. The Company is a guarantor on the lease which has a remaining term of 18 years, expiring in 2039, and remaining lease payments total approximately $1.5 million. The Company would remain a guarantor of the lease in the event the lease is extended for any established renewal periods. As of September 7, 2021, the Company does not anticipate any material defaults under the forgoing lease, and therefore, no liability has been provided. Additionally, another Del Taco franchisee has a direct sublease with a third party where the Company is a guarantor on the sublease. The lease has a remaining term of 10 years, expiring in 2031, and remaining lease payments total approximately $1.4 million. The Company would remain a guarantor of the lease in the event the lease is extended for any established renewal periods. In 2019, the franchisee defaulted on the lease payments. The Company had a liability of $0.1 million as of both September 7, 2021 and December 29, 2020, representing the fair value of the guarantee obligation that the Company will be liable for until it is able to find a new franchisee or convert the restaurant to a company-operated restaurant.
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Derivative Instruments |
8 Months Ended |
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Sep. 07, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments 2016 Interest Rate Cap Agreement In June 2016, the Company entered into an interest rate cap agreement, which became effective July 1, 2016, to hedge cash flows associated with interest rate fluctuations on variable rate debt, with a termination date of March 31, 2020 ("2016 Interest Rate Cap Agreement"). The 2016 Interest Rate Cap Agreement had an initial notional amount of $70.0 million of the Senior Credit Facility that effectively converted that portion of the outstanding balance of the Senior Credit Facility from variable rate debt to capped variable rate debt, resulting in a change in the applicable interest rate from an interest rate of one-month LIBOR plus the applicable margin (as provided by the Senior Credit Facility) to a capped interest rate of 2.00% plus the applicable margin. During the period from July 1, 2016 through the expiration on March 31, 2020, the 2016 Interest Rate Cap Agreement had no hedge ineffectiveness. To ensure the effectiveness of the 2016 Interest Rate Cap Agreement, the Company elected the one-month LIBOR rate option for its variable rate interest payments on term balances equal to or in excess of the applicable notional amount of the interest rate cap agreement as of each reset date. The reset dates and other critical terms perfectly match with the interest rate cap reset dates and other critical terms during fiscal year 2020 through the expiration on March 31, 2020. During the thirty-six weeks ended September 8, 2020, the Company reclassified approximately $67,000 of interest expense related to the hedges of these transactions into earnings. The effective portion of the 2016 Interest Rate Cap Agreement through the expiration on March 31, 2020 was included in accumulated other comprehensive loss.
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Fair Value Measurements |
8 Months Ended |
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Sep. 07, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value MeasurementsThe fair values of cash and cash equivalents, accounts receivable, accounts payable and other accrued liabilities approximate their carrying amounts due to their short maturities. The carrying value of the Senior Credit Facility, as amended, approximated its fair value. |
Other Accrued Liabilities and Other Non-current Liabilities |
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Other Liabilities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Accrued Liabilities and Other Non-current Liabilities | Other Accrued Liabilities and Other Non-current Liabilities A summary of other accrued liabilities follows (in thousands):
A summary of other non-current liabilities follows (in thousands):
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Stock-Based Compensation |
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Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation The Del Taco Restaurants, Inc. 2015 Omnibus Incentive Plan (the “2015 Plan”) was approved by shareholders to offer eligible employees, directors and consultants cash and stock-based incentive awards. Awards under the 2015 Plan are generally not restricted to any specific form or structure and could include, without limitation, stock options, stock appreciation rights, restricted stock, restricted stock units, other stock-based awards, other cash-based compensation and performance awards. Under the 2015 Plan, there were originally 3,300,000 shares of common stock reserved and authorized. On May 27, 2021, the Company's shareholders approved an amendment to the 2015 Plan to increase the number of shares available for grant by 1,800,000. At September 7, 2021, there were 1,138,002 shares of common stock available for grant under the 2015 Plan. Stock-Based Compensation Expense The total compensation expense related to the 2015 Plan was $1.4 million and $1.3 million for the twelve weeks ended September 7, 2021 and September 8, 2020, respectively, and $4.3 million and $3.9 million for the thirty-six weeks ended September 7, 2021 and September 8, 2020, respectively. Restricted Stock Awards A summary of outstanding and unvested restricted stock activity as of September 7, 2021 and changes during the period from December 29, 2020 through September 7, 2021 are as follows:
For the thirty-six weeks ended September 7, 2021 and September 8, 2020, the Company made payments of $1.9 million and $1.0 million, respectively, related to tax withholding obligations for the vesting of restricted stock awards in exchange for 191,976 and 164,545 shares withheld, respectively. As of September 7, 2021, there was $6.7 million of unrecognized stock compensation expense, net of estimated forfeitures, related to restricted stock awards that is expected to be recognized over a weighted-average remaining period of 2.3 years. The fair value of these awards was determined based on the Company’s stock price on the grant date. Performance-Based Restricted Stock Units During the twelve weeks ended September 7, 2021, the Company granted 70,199 restricted stock units subject to performance-based vesting conditions based on system-wide sales and Adjusted EBITDA to certain of its officers and executives. Each restricted stock unit ("RSU") has a grant date fair value of $9.89 and a vesting period from the grant date through the date the audit of the Company's fiscal 2021 financial results is expected to be completed. The fair value of each performance-based RSU is expensed based on management's current estimate of the level that the performance goal will be achieved. The Company recognized compensation expense of $0.1 million during the twelve weeks ended September 7, 2021 related to these performance-based awards. As of September 7, 2021, based on the target level of performance, the total unrecognized stock-based compensation expense related to non-vested performance-based restricted stock units was approximately $0.6 million that is expected to be recognized over a weighted-average remaining period of 0.5 years. Stock Options A summary of stock option activity as of September 7, 2021 and changes during the period from December 29, 2020 through September 7, 2021 are as follows:
The aggregate intrinsic value in the table above is the amount by which the current market price of the Company's stock exceeds the exercise price on September 7, 2021 and December 29, 2020, respectively. As of September 7, 2021, there was $2.1 million of unrecognized stock compensation expense, net of estimated forfeitures, related to stock option grants that is expected to be recognized over a weighted-average remaining period of 3.5 years.
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Shareholders' Equity |
8 Months Ended |
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Sep. 07, 2021 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity On February 26, 2016, the Company's Board of Directors authorized a share repurchase program covering up to $25.0 million in the aggregate of the Company's common stock and warrants which was effective immediately and expires upon completion of the repurchase program, unless terminated earlier by the Board of Directors. On August 23, 2016, the Company announced that the Board of Directors increased the repurchase program by $25.0 million to $50.0 million. The Board of Directors authorized an additional increase for the repurchase program effective July 23, 2018 of another $25.0 million to a total of $75.0 million. Purchases under the program may be made in open market or privately negotiated transactions. During the twelve weeks ended September 7, 2021, the Company repurchased 449,324 shares of common stock for an average price per share of $9.87 for an aggregate cost of approximately $4.4 million, including incremental direct costs to acquire the shares. During the thirty-six weeks ended September 7, 2021, the Company repurchased 765,774 shares of common stock for an average price per share of $9.79 for an aggregate cost of approximately $7.5 million, including incremental direct costs to acquire the shares. During the twelve and thirty-six weeks ended September 8, 2020, the Company did not repurchase any shares or warrants. As of September 7, 2021, there was approximately $10.6 million remaining under the share repurchase program. All of the Company's outstanding warrants expired on June 30, 2020. The Company has no obligations to repurchase shares under this authorization, and the timing and value of shares purchased will depend on the Company's stock price, market conditions and other factors.In January 2021, the Board of Directors authorized the initiation of a quarterly cash dividend program. During the twelve weeks ended September 7, 2021, the Company paid a quarterly dividend of $0.04 per share of common stock, which totaled $1.5 million. During the thirty-six weeks ended September 7, 2021, the Company paid three quarterly dividends of $0.04 per share of common stock, which totaled $4.4 million. The payment of dividends on common stock is at the discretion of the Board of Directors.
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(Loss) Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Loss) Earnings Per Share | Earnings (Loss) Per Share Basic income per share is calculated by dividing net income attributable to Del Taco’s common shareholders for the period by the weighted average number of common shares outstanding for the period. In computing dilutive income per share, basic income per share is adjusted for the assumed issuance of all applicable potentially dilutive share-based awards, including warrants, restricted stock, common stock options, performance-based restricted stock units and restricted stock units. Below are basic and diluted net income per share for the periods indicated (amounts in thousands except share and per share data):
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Income Taxes |
8 Months Ended |
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Sep. 07, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective income tax rates were 29.6% and 14.2% for the twelve weeks ended September 7, 2021 and September 8, 2020, respectively. The provision for income taxes was $1.6 million and $1.0 million for the twelve weeks ended September 7, 2021 and September 8, 2020, respectively. The effective income tax rates were 29.2% and 2.0% for the thirty-six weeks ended September 7, 2021 and September 8, 2020, respectively. The provision (benefit) for income taxes was $5.2 million and $(2.0) million for the thirty-six weeks ended September 7, 2021 and September 8, 2020, respectively. The income tax expense for the twelve weeks ended September 7, 2021 is driven by the estimated annual effective income tax rate which primarily consists of statutory federal and state tax rates based on apportioned income, the impact of non-tax deductible compensation to executives and the impact of lower stock compensation expense deductible for tax related to the June 30, 2021 vesting of certain restricted stock awards as compared to the cumulative amount recorded as stock-based compensation expense, partially offset by federal targeted job credits. The income tax expense for the twelve weeks ended September 8, 2020 is driven by the estimated effective income tax rate which primarily consists of statutory federal and state tax rates based on estimated apportioned income for fiscal year 2020, the impact of non-tax deductible compensation to executives and the impact of lower stock compensation expense deductible for tax related to the June 30, 2020 vesting of certain restricted stock awards as compared to the cumulative amount recorded as stock-based compensation expense, partially offset by federal targeted job credits. The income tax expense for the thirty-six weeks ended September 7, 2021 is driven by the estimated annual effective income tax rate which primarily consists of statutory federal and state tax rates based on apportioned income, the impact of non-tax deductible compensation to executives and the impact of lower stock compensation expense deductible for tax related to the June 30, 2021 vesting of certain restricted stock awards as compared to the cumulative amount recorded as stock-based compensation expense, partially offset by federal targeted job credits. The income tax benefit for the thirty-six weeks ended September 8, 2020 is primarily impacted by impairment of non-tax deductible goodwill of $87.3 million and reclassification of $3.5 million of goodwill from held for sale, as well as statutory federal and state tax rates based on estimated apportioned income for fiscal year 2020, the impact of non-tax deductible compensation to executives and the impact of lower stock compensation expense deductible for tax related to the June 30, 2020 vesting of certain restricted stock awards as compared to the cumulative amount recorded as stock-based compensation expense, partially offset by federal targeted job credits. Management believes it is more likely than not that all deferred tax assets will be realized, and therefore, no valuation allowance as of September 7, 2021 and December 29, 2020 is required. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was signed into law. The CARES Act provides numerous tax provisions and other stimulus measures, including temporary changes regarding the prior and future utilization of net operating losses, temporary changes to the prior and future limitations on interest deductions, temporary suspension of certain payment requirements for the employer portion of social security taxes, the creation of certain refundable employee retention credits, and technical corrections from prior tax legislation for tax depreciation of certain qualified improvement property. Beginning with pay dates on and after April 14, 2020, the Company elected to defer the employer-paid portion of social security taxes through the end of fiscal year 2020. The total amount deferred as of December 29, 2020 is $6.8 million, of which 50% is due by December 31, 2021 and 50% is due by December 31, 2022. The Company also assessed its eligibility for the business relief provision under the CARES Act known as the Employee Retention Credit ("ERC"), a refundable payroll tax credit for 50% of qualified wages paid during 2020. The American Rescue Plan passed into law on March 11, 2021 extended the ERC through December 31, 2021, and the credit was increased to 70% of qualified wages paid from January 1, 2021 through December 31, 2021. Based on the Company's assessment, the Company recognized a credit of $0 and $0.9 million during the twelve and thirty-six weeks ended September 7, 2021, respectively, for the ERC, which is recorded as an offset to related wages paid to employees while not providing services due to COVID-19 classified in occupancy and other operating expenses on the consolidated statements of comprehensive income (loss).
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Commitments and Contingencies |
8 Months Ended |
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Sep. 07, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The primary claims in the Company’s business are workers’ compensation and general liabilities. These insurance programs are self-insured or high deductible programs with excess coverage that management believes is sufficient to adequately protect the Company. In the opinion of management, adequate provision has been made for all incurred claims up to the self-insured or high deductible limits, including provision for estimated claims incurred but not reported. Because of the uncertainty of the ultimate resolution of outstanding claims, as well as the uncertainty regarding claims incurred but not reported, it is possible that management’s provision for these losses could change materially. However, no estimate can currently be made of the range of additional losses. Purchasing Commitments The Company enters into various purchase obligations in the ordinary course of business, generally of a short-term nature. Those that are binding primarily relate to commitments for food purchases and supplies, amounts owed under contractor and subcontractor agreements, orders submitted for equipment for restaurants under construction, information technology service agreements and marketing initiatives, some of which are related to both company-operated and franchise-operated locations. The Company also has a long-term beverage supply agreement with a major beverage vendor whereby marketing rebates are provided to the Company and its franchisees based upon the volume of purchases for system-wide restaurants which vary according to demand for beverage syrup. This contract has terms expiring at the end of 2021. The Company’s future estimated cash payments under existing contractual purchase obligations for goods and services as of September 7, 2021 are approximately $17.9 million. The Company has excluded agreements that are cancellable without penalty. Litigation In March 2014, a former Del Taco employee filed a purported class action complaint alleging that Del Taco has not appropriately provided meal breaks and failed to pay wages to its California hourly employees. On March 24, 2021, Del Taco filed its motion to oppose the plaintiff's motion for class certification. Discovery remains in process and Del Taco intends to assert all of its defenses to this threatened class action and the individual claims. Del Taco has several defenses to the action that it believes could prevent the certification of the class, as well as the potential assessment of any damages on a class basis. Legal proceedings are inherently unpredictable, and the Company is not able to predict the ultimate outcome or cost of the unresolved matter. However, based on management’s current understanding of the relevant facts and circumstances, the Company does not believe that these proceedings give rise to a probable or estimable loss and should not have a material adverse effect on the Company’s financial position, operations or cash flows. Therefore, Del Taco has not recorded any amount for the claim as of September 7, 2021. In September 2018, the Equal Employment Opportunity Commission (“EEOC”) filed a complaint on behalf of an individual complainant and an additional class of individuals alleging that Del Taco engaged in unlawful employment practices on the basis of sex and retaliation in violation of Title VII. The Company tendered the claim to its insurance carrier under its employment practices liability insurance policy. The Company's insurance coverage and retention includes amounts incurred for legal defense and any potential settlement. Since the Company had expected the settlement discussions to give rise to a loss in excess of the Company's insurance retention that is both probable and estimable, the Company recorded an expense for the overall action equal to the full retention of $0.5 million during the fifty-two weeks ended December 31, 2019. In December 2020, the Company reached a settlement with the EEOC for $1.25 million and a three-year consent decree, which includes company-wide injunctive relief aimed at preventing workplace harassment and retaliation. As of December 29, 2020, the Company recorded a receivable of $1.3 million from the Company's insurance carrier and an accrued liability of $1.3 million for legal fees covered by insurance and the claim settlement, which was collected from the insurance carrier during the thirty-six weeks ended September 7, 2021. Of the $1.25 million claim settlement, $0.9 million was paid to the plaintiff during the thirty-six weeks ended September 7, 2021 with the remainder to be paid at a later date. During the thirty-six weeks ended September 7, 2021, the Company settled an individual complaint filed by a member of the EEOC class for $0.5 million. Both this matter and the EEOC matter are subject to the same insurance retention of $0.5 million because they are deemed related matters under the Company's employment practices liability insurance policy. The Company's insurance carrier paid the $0.5 million settlement directly to the complainant's attorney. In consideration of the Company's insurance coverage, the ultimate liability with respect to these actions did not have a material effect on the operating results, cash flows or financial position of the Company for the thirty-six weeks ended September 7, 2021. The Company and its subsidiaries are parties to other legal proceedings incidental to their businesses, including claims alleging the Company’s restaurants do not comply with the Americans with Disabilities Act of 1990. In the opinion of management, based upon information currently available, the ultimate liability with respect to those other actions will not have a material effect on the operating results, cash flows or the financial position of the Company. However, due to the risks and uncertainties inherent in legal proceedings and litigation, actual results could differ from expectations. Construction Defect Issues During the second quarter of 2020, the Company identified various construction defects related to three closed restaurants in Texas. During the fourth quarter of 2020, the Company identified a fourth closed restaurant with construction defects. The Company believes the issues are attributable to defective construction performed by the same general contractor for all four restaurants. The Company plans to undertake voluntary rehabilitation of the four properties, and while the full extent of voluntary rehabilitation costs are not yet known, the Company is pursuing legal remedies against the general contractor to recover future incurred costs. These four restaurants were partially impaired in prior years. Subsequent to September 7, 2021, the Company reached a settlement with the general contractor regarding three of the restaurants for $1.5 million, of which $0.4 million is payable to the Company's attorney as a contingency fee.
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Subsequent Events |
8 Months Ended |
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Sep. 07, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsIn October 2021, the Board of Directors declared a quarterly dividend of $0.04 per share of common stock to be paid on November 24, 2021 to shareholders of record at the close of business on November 3, 2021. While the Company intends to pay quarterly cash dividends for the foreseeable future, all subsequent dividend payments will be reviewed quarterly and declared by the Board of Directors at its discretion. |
Basis of Presentation and Summary of Significant Accounting Policies (Policies) |
8 Months Ended |
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Sep. 07, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements included herein have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). For additional information, these unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 29, 2020 ("2020 Form 10-K"). The Company’s fiscal year ends on the Tuesday closest to December 31. Fiscal year 2021 is a fifty-two week period ending December 28, 2021. Fiscal year 2020 is the fifty-two week period ended December 29, 2020. In a fifty-two week fiscal year, the first, second and third quarters each include twelve weeks of operations and the fourth quarter includes sixteen weeks of operations. For fiscal year 2021, the Company’s accompanying financial statements reflect the twelve weeks ended September 7, 2021. For fiscal year 2020, the Company’s accompanying financial statements reflect the twelve weeks ended September 8, 2020. In the opinion of management, the accompanying consolidated financial statements reflect all adjustments which are necessary for a fair presentation of the consolidated financial position, results of operations and cash flows for the periods presented. The results of operations for such interim periods are not necessarily indicative of results of operations to be expected for the full fiscal year.
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Principles of Consolidation | Principles of Consolidation The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly and majority owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
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Use of Estimates | Use of EstimatesThe preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Management believes that such estimates have been based on reasonable and supportable assumptions and the resulting estimates are reasonable for use in the preparation of the consolidated financial statements. Actual results could differ from these estimates. The Company’s significant estimates include estimates for impairment of goodwill, intangible assets and property and equipment, valuations provided in business combinations, insurance reserves, restaurant closure reserves, stock-based compensation, contingent liabilities, certain leasing activities and income tax valuation allowances |
Recently Issued and Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In December 2019, the Financial Accounting Standard Board ("FASB") issued Accounting Standards Update ("ASU") 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing the following exceptions: (1) exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or gain from other items; (2) exception to the requirement to recognize a deferred tax liability for equity method investments when a subsidiary becomes an equity method investment; and (3) exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. Furthermore, ASU 2019-12 simplifies the accounting for income taxes by doing the following: (1) requiring that an entity recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax; (2) requiring that an entity evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction; (3) specifying that an entity is not required to allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements; and (4) requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The Company adopted the requirements of this new standard on December 30, 2020, the first day of fiscal year 2021, utilizing the prospective approach. There was no material impact on the Company's consolidated financial statements and related disclosures as a result of adopting this standard.
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Significant Accounting Policies | Summary of Significant Accounting Policies There have been no changes to our significant accounting policies described in the 2020 Form 10-K filed with the SEC on March 11, 2021 that have had a material impact on our consolidated financial statements and related notes.
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Impairment of Long-Lived Assets and Restaurant Closure Charges (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Closure Liability Activity for 12 Closed Restaurants | A summary of the restaurant closure liability activity for these closed restaurants consisted of the following (in thousands):
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Summary of Refranchising and Franchise Acquisitions (Tables) |
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Franchise Acquisitions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of refranchising [Table Text Block] | The following table summarizes the net loss recognized related to this transaction (dollars in thousands):
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Goodwill and Other Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Intangible Assets | The Company’s other intangible assets at September 7, 2021 and December 29, 2020 consisted of the following (in thousands):
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Debt, Obligations Under Capital Leases and Deemed Landlord Financing Liabilities (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | The Company’s long-term debt, finance lease obligations and other debt at September 7, 2021 and December 29, 2020 consisted of the following (in thousands):
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Leases (Tables) |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Lease Cost, Remaining Lease Term, Discount Rate and Supplemental Cash Flow Information | The components of lease cost for the twelve and thirty-six weeks ended September 7, 2021 were as follows (in thousands):
Supplemental cash flow information related to leases was as follows (in thousands):
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Schedule of Supplemental Balance Sheet Information | Supplemental balance sheet information related to the Company's operating and finance leases (noting the financial statement caption each is included with) as of September 7, 2021 and December 29, 2020 was as follows (in thousands):
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Schedule of Estimated Future Minimum Finance Lease Payments | The estimated future lease payments as of September 7, 2021 are as follows (in thousands):
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Schedule of Estimated Future Minimum Operating Lease Payment | The estimated future lease payments as of September 7, 2021 are as follows (in thousands):
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Schedule of Minimum Rental Commitments | The estimated future lease payments as of September 7, 2021 are as follows (in thousands):
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Schedule of Sublease Minimum Rental Receipts | The estimated future lease payments as of September 7, 2021 are as follows (in thousands):
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Other Accrued Liabilities and Other Non-current Liabilities (Tables) |
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Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Other Accrued Liabilities | A summary of other accrued liabilities follows (in thousands):
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Summary of Other Non-current Liabilities | A summary of other non-current liabilities follows (in thousands):
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Stock-Based Compensation (Tables) |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Outstanding and Unvested Restricted Stock Activity | A summary of outstanding and unvested restricted stock activity as of September 7, 2021 and changes during the period from December 29, 2020 through September 7, 2021 are as follows:
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Summary of Stock Options Activity | A summary of stock option activity as of September 7, 2021 and changes during the period from December 29, 2020 through September 7, 2021 are as follows:
|
(Loss) Earnings Per Share (Tables) |
8 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Basic and Diluted Net Income (Loss) Per Share Data | Below are basic and diluted net income per share for the periods indicated (amounts in thousands except share and per share data):
|
Description of Business (Details) |
Sep. 07, 2021
state
restaurants
|
Sep. 08, 2020
restaurants
state
|
---|---|---|
Franchisor Disclosure [Line Items] | ||
Number of states in which entity operates | state | 16 | 15 |
Entity Operated Units | ||
Franchisor Disclosure [Line Items] | ||
Number of restaurants | 297 | 295 |
Franchised Units | ||
Franchisor Disclosure [Line Items] | ||
Number of restaurants | 306 | 301 |
Franchised Units | GUAM | ||
Franchisor Disclosure [Line Items] | ||
Number of restaurants | 1 | 1 |
Impairment of Long-Lived Assets and Restaurant Closure Charges (Details) |
3 Months Ended | 8 Months Ended | |||
---|---|---|---|---|---|
Sep. 07, 2021
USD ($)
|
Sep. 08, 2020
USD ($)
|
Sep. 07, 2021
USD ($)
|
Sep. 08, 2020
USD ($)
location
|
Dec. 29, 2020
USD ($)
|
|
Restructuring and Related Activities [Abstract] | |||||
Impairment of long-lived assets | $ 0 | $ 0 | $ 0 | $ 8,287,000 | |
Number of underperforming locations | location | 8 | ||||
Restructuring closure liability | 400,000 | 400,000 | $ 500,000 | ||
Current portion of restaurant closure liability | 200,000 | 200,000 | 200,000 | ||
Noncurrent portion of restaurant closure liability | $ 200,000 | $ 200,000 | $ 300,000 |
Impairment of Long-Lived Assets and Restaurant Closure Charges (Details) - USD ($) $ in Thousands |
8 Months Ended | ||
---|---|---|---|
Sep. 07, 2021 |
Sep. 08, 2020 |
Dec. 29, 2020 |
|
Restructuring Reserve [Roll Forward] | |||
Beginning Balance | $ 500 | ||
Accretion | 11 | $ 16 | |
Ending Balance | 400 | ||
Noncurrent portion of restaurant closure liability | 200 | $ 300 | |
Restaurant closure liabilities | 200 | $ 200 | |
Closure of 12 Underperforming Restaurants [Member] | Contract Termination [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Beginning Balance | 454 | 437 | |
Cash payments | (121) | (2) | |
Adjustments to estimates based on current activity | 22 | 0 | |
Ending Balance | $ 366 | $ 451 |
Summary of Refranchising and Franchise Acquisitions - Summary of Refranchising (Details) $ in Thousands |
8 Months Ended | ||
---|---|---|---|
Sep. 07, 2021
USD ($)
restaurants
|
Sep. 08, 2020
USD ($)
restaurants
|
Dec. 29, 2020
USD ($)
|
|
Franchise Acquisitions [Abstract] | |||
Company-operated restaurants sold to franchisees | restaurants | 0 | 6 | |
Proceeds from the sale of company-operated restaurants, net of selling costs | $ 2,558 | ||
Net assets sold (primarily furniture, fixtures and equipment) | (2,086) | ||
Goodwill related to the company-operated restaurants sold to franchisees | 1,196 | ||
Allocation to deferred franchise fees | (193) | ||
Sublease assets, net | 220 | ||
Gain on lease termination | 40 | ||
Loss on sale of company-operated restaurants | $ (657) | ||
Assets Held-for-sale, Not Part of Disposal Group, Current, Total | $ 1,468 | $ 1,495 | |
Land Available-for-sale | 550 | 561 | |
Real Estate Held-for-sale | $ 918 | $ 934 |
Summary of Refranchising and Franchise Acquisitions - Additional Information (Details) $ in Thousands |
8 Months Ended | |||
---|---|---|---|---|
Sep. 07, 2021
USD ($)
restaurants
|
Sep. 08, 2020
USD ($)
restaurants
|
Sep. 09, 2021
USD ($)
|
Dec. 29, 2020
USD ($)
|
|
Franchise Acquisitions [Abstract] | ||||
Assets Held For Sale, Assets Sold | $ 700 | |||
Company-operated restaurants sold to franchisees | restaurants | 0 | 6 | ||
Assets Held For Sale, Fair Value Adjustment | $ 600 | |||
Impairment of Long-Lived Assets to be Disposed of | $ 27 | |||
Franchisor Disclosure [Line Items] | ||||
Accounts and other receivables, net | $ 5,292 | $ 5,463 | ||
Subsequent Event | ||||
Franchisor Disclosure [Line Items] | ||||
Disposal Group, Including Discontinued Operation, Consideration | $ 1,550 | |||
Closing costs | $ 83 |
Goodwill and Other Intangible Assets - Schedule of Other Intangible Assets (Detail) - USD ($) $ in Thousands |
Sep. 07, 2021 |
Dec. 29, 2020 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 16,609 | $ 16,681 |
Accumulated Amortization | (7,739) | (6,927) |
Net | 8,870 | 9,754 |
Sublease assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,820 | 1,820 |
Accumulated Amortization | (273) | (193) |
Net | 1,547 | 1,627 |
Franchise rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 13,846 | 13,918 |
Accumulated Amortization | (7,082) | (6,421) |
Net | 6,764 | 7,497 |
Reacquired franchise rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 943 | 943 |
Accumulated Amortization | (384) | (313) |
Net | $ 559 | $ 630 |
Goodwill and Other Intangible Assets - Additional Information (Details) $ in Thousands |
8 Months Ended | |
---|---|---|
Sep. 07, 2021
USD ($)
location
|
Dec. 29, 2020
USD ($)
|
|
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill | $ 108,979 | $ 108,979 |
Goodwill, Impaired, Accumulated Impairment Loss | 205,600 | $ 205,600 |
Indefinite-lived Intangible Assets, Written off Related to Sale of Business Unit | $ 100 | |
Two Franchise-Operated Restaurants | ||
Finite-Lived Intangible Assets [Line Items] | ||
Number of Franchise Locations Closed | location | 2 |
Debt, Obligations Under Capital Leases and Deemed Landlord Financing Liabilities - Schedule of Debt (Detail) - USD ($) $ in Thousands |
Sep. 07, 2021 |
Dec. 29, 2020 |
---|---|---|
Debt Instrument [Line Items] | ||
Total outstanding indebtedness | $ 105,181 | $ 113,997 |
Present value of lease obligations | 456 | 611 |
Total debt | 105,637 | 114,608 |
Less: amounts due within one year | 59 | 190 |
Total amounts due after one year, net | 105,578 | 114,418 |
Deferred finance costs | 671 | 821 |
2015 Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Credit Facility | 105,181 | 113,997 |
Debt discount | $ 148 | $ 182 |
Debt, Obligations Under Capital Leases and Deemed Landlord Financing Liabilities - Additional Information (Detail) - USD ($) |
8 Months Ended | ||
---|---|---|---|
Sep. 07, 2021 |
Dec. 29, 2020 |
Aug. 04, 2015 |
|
Debt Instrument [Line Items] | |||
Deferred finance costs | $ 671,000 | $ 821,000 | |
Finance lease obligation written off | 36,000 | ||
Net book value of finance lease asset written off | 37,000 | ||
Amount of operating lease, right-of-use asset carried over | 1,000 | ||
2015 Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Credit facility amount | $ 250,000,000 | ||
Letters of credit | $ 13,400,000 | ||
Interest rate on outstanding balance of credit facility (percent) | 1.61% | ||
Availability for additional borrowings under credit facility | $ 130,600,000 | ||
Credit facility outstanding borrowings | 106,000,000 | ||
Debt discount | $ 148,000 | $ 182,000 | |
Letter of Credit | 2015 Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Credit facility amount | $ 35,000,000 |
Leases - Components of Lease Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 8 Months Ended | ||
---|---|---|---|---|
Sep. 07, 2021 |
Sep. 08, 2020 |
Sep. 07, 2021 |
Sep. 08, 2020 |
|
Leases [Abstract] | ||||
Operating lease cost | $ 9,394 | $ 9,251 | $ 28,351 | $ 28,060 |
Finance lease cost: | ||||
Amortization of right of use assets | 17 | 33 | 64 | 123 |
Interest on lease liabilities | 2 | 5 | 7 | 23 |
Short-term lease cost | 21 | 71 | 107 | 238 |
Variable lease cost | 538 | 440 | 1,535 | 1,097 |
Sublease income | (1,683) | (1,716) | (4,997) | (4,988) |
Total lease cost | $ 8,289 | $ 8,084 | $ 25,067 | $ 24,553 |
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands |
Sep. 07, 2021 |
Dec. 29, 2020 |
---|---|---|
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 243,595 | $ 249,071 |
Current portion of operating lease liabilities | 21,286 | 22,648 |
Operating lease liabilities, excluding current portion | 246,220 | 251,958 |
Total operating lease liabilities | 267,506 | 274,606 |
Buildings under finance leases | 260 | 441 |
Accumulated depreciation | (203) | (283) |
Finance lease assets, net | 57 | 158 |
Current portion of finance lease obligations and other debt | 24 | 128 |
Long-term debt, finance lease obligations and other debt, excluding current portion, net | 37 | 46 |
Total finance lease obligations | $ 61 | $ 174 |
Leases - Weighed Average Remaining Lease Term (Details) |
Sep. 07, 2021 |
---|---|
Leases [Abstract] | |
Operating leases | 12 years |
Finance leases | 2 years 6 months |
Leases - Weighted Average Discount Rate (Details) |
Sep. 07, 2021 |
---|---|
Leases [Abstract] | |
Operating Lease, Weighted Average Discount Rate, Percent | 6.51% |
Finance Lease, Weighted Average Discount Rate, Percent | 10.32% |
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
8 Months Ended | |
---|---|---|
Sep. 07, 2021 |
Sep. 08, 2020 |
|
Leases [Abstract] | ||
Operating cash flows used for operating leases | $ 29,679 | $ 25,529 |
Operating cash flows used for finance leases | 7 | 23 |
Financing cash flows used for finance leases | $ 71 | $ 119 |
Leases - Estimated Minimum Future Lease Payments (Details) - USD ($) $ in Thousands |
Sep. 07, 2021 |
Dec. 29, 2020 |
---|---|---|
Finance Lease Liabilities | ||
2021 | $ 17 | |
2022 | 19 | |
2023 | 17 | |
2024 | 16 | |
2025 | 1 | |
Thereafter | 0 | |
Total lease payments | 70 | |
Amounts representing interest | (9) | |
Present value of lease obligations | 61 | $ 174 |
Operating Lease Liabilities | ||
2021 | 10,315 | |
2022 | 43,213 | |
2023 | 38,218 | |
2024 | 31,992 | |
2025 | 32,179 | |
Thereafter | 238,523 | |
Total lease payments | 394,440 | |
Amounts representing interest | (126,934) | |
Present value of lease obligations | 267,506 | $ 274,606 |
Operating Subleases | ||
2021 | (1,586) | |
2022 | (6,973) | |
2023 | (6,315) | |
2024 | (5,654) | |
2025 | (5,999) | |
Thereafter | (59,525) | |
Total lease payments | (86,052) | |
Net Lease Commitments | ||
2020 | 8,746 | |
2021 | 36,259 | |
2022 | 31,920 | |
2023 | 26,354 | |
2024 | 26,181 | |
Thereafter | 178,998 | |
Total lease payments | 308,458 | |
Amounts representing interest | (126,943) | |
Present value of lease obligations | $ 181,515 |
Derivative Instruments (Details) $ in Thousands |
8 Months Ended |
---|---|
Sep. 08, 2020
USD ($)
| |
Derivative [Line Items] | |
Interest expense reclassified into earnings | $ 67 |
Interest Rate Cap | Cash Flow Hedging | |
Derivative [Line Items] | |
Derivative, Notional Amount | $ 70,000 |
Cap interest rate | 2.00% |
Other Accrued Liabilities and Other Non-current Liabilities - Summary of Other Accrued Liabilities (Detail) - USD ($) $ in Thousands |
Sep. 07, 2021 |
Dec. 29, 2020 |
---|---|---|
Other Liabilities Disclosure [Abstract] | ||
Employee compensation and related items | $ 16,979 | $ 16,048 |
Accrued insurance | 5,123 | 5,031 |
Accrued advertising | 4,522 | 3,920 |
Accrued sales tax | 4,179 | 3,712 |
Deferred Social Security Taxes | 3,381 | 3,381 |
Accrued property and equipment purchases | 3,075 | 1,970 |
Accrued real property tax | 2,619 | 1,841 |
Accrued income tax | 1,852 | 4,301 |
Accrued rent and related items | 1,530 | 1,490 |
Deferred gift card income | 1,219 | 1,669 |
Other | 2,260 | 2,050 |
Other accrued liabilities | $ 46,739 | $ 45,413 |
Other Accrued Liabilities and Other Non-current Liabilities - Summary of Other Non-current Liabilities (Detail) - USD ($) $ in Thousands |
Sep. 07, 2021 |
Dec. 29, 2020 |
---|---|---|
Other Liabilities Disclosure [Abstract] | ||
Insurance reserves | $ 7,751 | $ 8,178 |
Deferred development and initial franchise fees | 5,598 | 4,523 |
Deferred social security taxes, Non Current | 3,381 | 3,381 |
Sublease liabilities | 1,298 | 1,375 |
Deferred gift card income | 859 | 1,464 |
Other | 739 | 839 |
Other non-current liabilities | $ 19,626 | $ 19,760 |
Stock-Based Compensation - Summary of Outstanding and Unvested Restricted Stock Activity (Details) - Restricted Stock |
8 Months Ended |
---|---|
Sep. 07, 2021
$ / shares
shares
| |
Shares | |
Nonvested Shares, Beginning balance (in shares) | shares | 1,254,775 |
Granted (in shares) | shares | 281,822 |
Vested (in shares) | shares | (519,931) |
Forfeited (in shares) | shares | (3,750) |
Nonvested Shares, Ending balance (in shares) | shares | 1,012,916 |
Weighted-Average Grant Date Fair Value | |
Weighted-Average Grant Date Fair Value, Beginning balance (in dollars per share) | $ / shares | $ 9.84 |
Weighted-Average Grant Date Fair Value, Granted (in dollars per share) | $ / shares | 9.76 |
Weighted-Average Grant Date Fair Value, Vested (in dollars per share) | $ / shares | 10.64 |
Weighted-Average Grant Date Fair Value, Forfeited (in dollars per share) | $ / shares | 7.93 |
Weighted-Average Grant Date Fair Value, Ending balance (in dollars per share) | $ / shares | $ 9.41 |
Shareholders' Equity (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 8 Months Ended | |||||
---|---|---|---|---|---|---|---|---|
Oct. 31, 2021 |
Sep. 07, 2021 |
Jun. 15, 2021 |
Mar. 23, 2021 |
Sep. 07, 2021 |
Jul. 23, 2018 |
Aug. 23, 2016 |
Feb. 26, 2016 |
|
Class of Stock [Line Items] | ||||||||
Shares repurchased, value | $ 4,442,000 | $ 2,124,000 | $ 948,000 | |||||
Dividend paid (in dollars per share) | $ 0.04 | |||||||
Dividends paid | 1,500,000 | $ 4,400,000 | ||||||
Subsequent Event | ||||||||
Class of Stock [Line Items] | ||||||||
Dividend declared (in dollars per share) | $ 0.04 | |||||||
Common Stock and Warrants | ||||||||
Class of Stock [Line Items] | ||||||||
Maximum authorized stock repurchase amount (up to) | $ 75,000,000 | $ 50,000,000 | $ 25,000,000 | |||||
Remaining authorized stock repurchase amount | $ 10,600,000 | $ 10,600,000 | ||||||
Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Shares repurchased (in shares) | 449,324 | 765,774 | ||||||
Average price per share (in dollars per share) | $ 9.87 | $ 9.79 | ||||||
Shares repurchased, value | $ 4,400,000 | $ 7,500,000 |
Income Taxes (Details) - USD ($) |
3 Months Ended | 8 Months Ended | |||
---|---|---|---|---|---|
Sep. 07, 2021 |
Sep. 08, 2020 |
Sep. 07, 2021 |
Sep. 08, 2020 |
Dec. 29, 2020 |
|
Income Tax Disclosure [Abstract] | |||||
Effective income tax rates (percent) | 29.60% | 14.20% | 29.20% | 2.00% | |
Provision (benefit) for income taxes | $ 1,617,000 | $ 962,000 | $ 5,154,000 | $ (2,028,000) | |
Goodwill, Transfers | 3,500,000 | ||||
Valuation allowance | 0 | 0 | $ 0 | ||
Deferred Tax Expense, Social Security Taxes | $ 6,800,000 | ||||
Deferred Tax Expense, Social Security Taxes, Due in Year One, Percent | 50.00% | ||||
Deferred Tax Expense, Social Security Taxes, Due in Year Two, Percent | 50.00% | ||||
CARES Act, Employee Retention Credit, Refundable Payroll Tax Credit, Percent | 50.00% | ||||
CARES Act, Employee Retention Credit, Refundable Payroll Tax Credit, Extended, Percent | 70.00% | ||||
CARES Act, Employee Retention Credit, Refundable Payroll Tax Credit, Amount | 0 | 900,000 | |||
Impairment of goodwill | $ 0 | $ 0 | $ 0 | $ 87,277,000 |
Commitments and Contingencies (Details) $ in Thousands |
1 Months Ended | 3 Months Ended | 4 Months Ended | 8 Months Ended | 12 Months Ended | |
---|---|---|---|---|---|---|
Oct. 14, 2021
USD ($)
|
Dec. 29, 2020
USD ($)
|
Jun. 16, 2020
restaurants
|
Dec. 29, 2020
USD ($)
restaurants
|
Sep. 07, 2021
USD ($)
|
Dec. 31, 2019
USD ($)
|
|
Loss Contingencies [Line Items] | ||||||
Contractual purchase obligations for goods and services | $ 17,900 | |||||
Construction Defects | ||||||
Loss Contingencies [Line Items] | ||||||
Number of Closed Restaurants | restaurants | 3 | 4 | ||||
Construction Defects | Subsequent Event | ||||||
Loss Contingencies [Line Items] | ||||||
Loss Contingency Accrual | $ 400 | |||||
Litigation Settlement, Amount Awarded from Other Party | $ 1,500 | |||||
EEOC Case | ||||||
Loss Contingencies [Line Items] | ||||||
Litigation Settlement, Expense | $ 1,250 | $ 500 | ||||
Loss Contingency, Receivable | 1,300 | $ 1,300 | ||||
Estimated Litigation Liability | $ 1,300 | $ 1,300 | ||||
Payments for Legal Settlements | 900 | |||||
EEOC Case, Individual Complaint | ||||||
Loss Contingencies [Line Items] | ||||||
Payments for Legal Settlements | $ 500 |
Subsequent Events (Details) |
1 Months Ended |
---|---|
Oct. 31, 2021
$ / shares
| |
Subsequent Event | |
Subsequent Event [Line Items] | |
Dividend declared (in dollars per share) | $ 0.04 |
Label | Element | Value |
---|---|---|
Accounts Receivable, Allowance for Credit Loss, Writeoff | us-gaap_AllowanceForDoubtfulAccountsReceivableWriteOffs | $ 39,000 |
Accounts Receivable, Allowance for Credit Loss, Writeoff | us-gaap_AllowanceForDoubtfulAccountsReceivableWriteOffs | 0 |
Other Noncash Income | us-gaap_OtherNoncashIncome | 373,000 |
Other Noncash Income | us-gaap_OtherNoncashIncome | $ 0 |
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