Strong 4Q15 System-Wide Comparable Restaurant
Sales of +5.8%
Company Provides Initial 2016 Outlook
Del Taco Restaurants, Inc. (“Del Taco” or the “Company”),
(NASDAQ: TACO, TACOW), the second largest Mexican-American QSR
chain by units in the United States, operating restaurants under
the name Del Taco, today announced preliminary unaudited fiscal
fourth quarter 2015 sales results ahead of its presentation
tomorrow at the ICR Conference. Del Taco also provided updated
guidance for fiscal year 2015 as well as initial guidance for
fiscal year 2016.
Fiscal Fourth Quarter 2015 Highlights
- System-wide comparable restaurant sales
growth of approximately 5.8% and company-owned comparable
restaurant sales growth of approximately 5.9%, marking the ninth
and fourteenth consecutive quarter of gains, respectively;
- Company-owned comparable restaurant
sales growth comprises check growth of 6.0%, including over 2% of
menu mix growth, and approximately flat transactions at
(0.1%);
- Total revenue of approximately $133.4
million, representing 6.1% growth from the fiscal fourth quarter of
2014;
- Restaurant sales of approximately
$128.1 million, representing 6.0% growth from the fiscal fourth
quarter of 2014; and
- Based on updated 2015 guidance,
Adjusted EBITDA guidance (a non-GAAP financial measure) for the
fiscal fourth quarter 2015 of at least $21.0 million, representing
at least 7% growth from the previous year’s fiscal fourth
quarter.
The expected sales results are preliminary and unaudited, have
not been reviewed by our independent registered public accountants,
and remain subject to the completion of normal quarter-end
accounting procedures and adjustments and are subject to change.
The Company expects to release financial and operating results for
its fiscal fourth quarter and fiscal year ended December 29, 2015
during March 2016.
Paul J.B. Murphy, III, President and Chief Executive Officer of
Del Taco, commented, “2015 was an incredibly successful year at Del
Taco and we are pleased to have delivered preliminary sales results
that we believe will rank among the best in our industry. We
continue to elevate and solidify our QSR+ positioning through solid
execution and product innovation across our tiered menu strategy
including items such as our fresh avocados, handcrafted ensaladas,
and freshly grilled carne asada steak. This helped drive another
quarter of impressive menu mix improvement, contributing over 2% to
our check growth. Our fourth quarter performance also marked our
ninth and fourteenth consecutive quarters of comparable restaurant
sales growth system-wide and for company-owned restaurants,
respectively. We thank all of our team members for their dedication
and contributions to these outstanding results and look forward to
2016.”
Updated Fiscal 2015 Guidance
Based upon these preliminary unaudited sales results, Del Taco
is offering the following updated guidance for fiscal year 2015, a
52 week period ending December 29, 2015.
- System-wide same store sales growth of
approximately 6.3%, including 6.4% for company-owned restaurants
and 6.2% for franchise restaurants;
- Total revenue of approximately $424.0
million;
- Total company restaurant sales of
approximately $407.6 million;
- Restaurant contribution margin of at
least 19.7% (representing the high end of the previously guided
range);
- G&A expenses between approximately
$32.3 and $32.5 million, including non-cash stock-based
compensation of approximately $2.1 million;
- Adjusted EBITDA of at least $64.8
million (representing the high end of the previously guided range);
and
- Twelve system-wide restaurant openings,
including six company-owned restaurants.
Del Taco opened three company-owned and six franchise
restaurants during the fiscal fourth quarter, resulting in twelve
system-wide openings during fiscal year 2015. One company-owned
restaurant previously expected to open last year was delayed due to
significant rains in Georgia and opened on January 6, 2016.
Additionally, Del Taco closed twelve previously discussed
underperforming company-owned restaurants late in the fiscal fourth
quarter.
The updated 2015 guidance is based on preliminary sales results,
is unaudited, has not been reviewed by our independent registered
public accountants, and remains subject to change in connection
with the preparation of the audited financial statements for the
year ended December 29, 2015.
Initial Fiscal 2016 Guidance
The Company is providing the following initial guidance for
fiscal year 2016, a 53-week period ending January 3, 2017.
- System-wide same store sales growth of
approximately 2.5% to 4.5%;
- Total revenue between $439 million and
$449 million;
- Total company-owned restaurant sales
between $422 million and $432 million;
- New California minimum wage impact
estimated to increase labor and related expenses by approximately
$7.2 million, including preservation of appropriate wage
differentials and incremental payroll taxes;
- Adjusted EBITDA between $67.5 million
and $70.0 million;
- Fifteen to eighteen new system-wide
restaurant openings, including the company-owned restaurant that
opened in early January 2016; and
- Net capital expenditures totaling
approximately $36.0 to $41.0 million including approximately $10.0
to $12.5 million for new unit construction, approximately $10.0 to
$11.0 million for capitalized maintenance, approximately $10.0 to
$11.5 million for discretionary investment in equipment and
technology, and approximately $6.0 million for land acquisition for
development after 2016.
The fiscal 2016 guidance is based on preliminary fiscal 2015
sales results and remains subject to change.
ICR Conference Participation
The Del Taco management team will present at the ICR Conference
on Tuesday, January 12, 2016 at the Grande Lakes Hotel and Resort
in Orlando, Florida. The presentation will begin at 8:30 AM Eastern
Time and will be webcast live and later archived. The presentation
will be posted to the Del Taco website at investor.deltaco.com
under the “News & Events” tab on Tuesday, January 12, 2016
before the presentation begins.
Key Financial Definitions
Comparable restaurant sales growth reflects the change in
year-over-year sales for the comparable company, franchise and
total system restaurant base. Restaurants are included in the
comparable store base in the accounting period following its 18th
full month of operations and excludes restaurant closures.
Restaurant contribution is defined as company restaurant
sales less restaurant operating expenses, which are food and paper
costs, labor and related expenses and occupancy and other operating
expenses. Restaurant contribution margin is defined as
restaurant contribution as a percentage of company restaurant
sales. Restaurant contribution and restaurant contribution
margin are neither required by, nor presented in accordance
with, GAAP.
Adjusted EBITDA is defined as net income/loss prior to
interest expense, income taxes, and depreciation and amortization,
as adjusted to add back certain charges, such as stock-based
compensation expense and transaction-related costs, as these
expenses are not considered an indicator of ongoing company
performance. Adjusted EBITDA is a non-GAAP financial measure
and should not be considered as an alternative to operating income
or net income/loss as a measure of operating performance or cash
flows or as measures of liquidity. Non-GAAP financial measures are
not necessarily calculated the same way by different companies and
should not be considered a substitute for or superior to GAAP
results. Adjusted EBITDA is a financial measure that was not
calculated in accordance with GAAP.
About Del Taco Restaurants, Inc.
At Del Taco (NASDAQ: TACO, TACOW), all menu items taste better
because they are made to order with fresh ingredients including
cheddar cheese grated from 40-pound blocks, handmade pico de gallo
salsa, lard-free beans slow-cooked from scratch, fresh sliced
avocado and marinated chicken grilled in the restaurant. The menu,
which includes a full line of breakfast, includes classic Mexican
dishes such as tacos, burritos, quesadillas and nachos as well as
American favorites including hamburgers, crinkle-cut fries and
shakes. Del Taco's UnFreshing Believable campaign communicates the
lengths the company goes to in order to deliver quality,
made-to-order menu items created with freshly-prepared ingredients
at unbelievable prices. With nearly 550 restaurants in 16 states,
Del Taco serves more than three million guests each week. Guests
are invited to "like" Del Taco on Facebook at
www.facebook.com/deltaco and join its Raving Fan eClub at
www.DelTaco.com/RavingFan. For more information, please visit
www.deltaco.com.
Forward-Looking Statements
In addition to historical information, this release may contain
a number of “forward-looking statements” as defined in the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements include, without limitation, information concerning Del
Taco’s possible or assumed future results of operations, business
strategies, competitive position, industry environment, potential
growth opportunities and the effects of regulation. These
statements are based Del Taco’s management’s current expectations
and beliefs, as well as a number of assumptions concerning future
events. When used in this press release, the words “estimates,”
“projected,” “expects,” “anticipates,” “forecasts,” “plans,”
“intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,”
“propose,” “preliminary,” “guidance” and variations of these words
or similar expressions (or the negative versions of such words or
expressions) are intended to identify forward-looking statements.
Such forward-looking statements are subject to known and unknown
risks, uncertainties, assumptions and other important factors, many
of which are outside Del Taco’s management’s control that could
cause actual results to differ materially from the results
discussed in the forward-looking statements. These risks included,
without limitation, consumer demand, our inability to successfully
open company-owned or franchised restaurants or establish new
markets, competition in our markets, our inability to grow and
manage growth profitably, adverse changes in food and supply costs,
our inability to access additional capital, changes in applicable
laws or regulations, food safety and foodborne illness concerns,
our inability to manage existing and to obtain additional
franchisees, our inability to attract and retain qualified
personnel, our inability to profitably expand into new markets, and
the possibility that we may be adversely affected by other
economic, business, and/or competitive factors. Additional risks
and uncertainties are identified and discussed in Del Taco’s
reports filed with the SEC and available at the SEC’s website at
www.sec.gov and the Company’s website at www.deltaco.com.
Forward-looking statements included in this release speak only
as of the date of this release. Del Taco undertakes no obligation
to update its forward-looking statements to reflect events or
circumstances after the date of this release or otherwise.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160111006417/en/
Del Taco Restaurants, Inc.Media:Julia Young, (646)
277-1280julia.young@icrinc.comorInvestor Relations:Raphael Gross,
(203) 682-8253investor@deltaco.com
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