Company-operated and System-wide comparable
restaurant sales growth of 4.0% and 4.2%
Conference call and webcast will be held at
5:00 p.m. ET today
Del Taco Restaurants, Inc. (“Del Taco” or the “Company”),
(NASDAQ:TACO), the second largest Mexican-American QSR chain by
units in the United States, operating restaurants under the name
Del Taco, today announced fiscal first quarter 2017 financial
results. The Company also reaffirmed guidance for fiscal year
2017.
Fiscal First Quarter 2017 Highlights
- System-wide comparable restaurant sales
growth of 4.2% and company-operated comparable restaurant sales
growth of 4.0%, marking the 14th and 19th consecutive quarter of
gains, respectively;
- Company-operated comparable restaurant
sales growth was comprised of average check growth of 3.7%,
including over 1% of menu mix growth, and a transaction increase of
0.3%;
- Total revenue of $105.3 million,
representing 8.2% growth from the fiscal first quarter 2016;
- Company-operated restaurant sales of
$101.2 million, representing 8.2% growth from the fiscal first
quarter 2016;
- Net income increased to $4.2 million,
representing diluted earnings per share of $0.10, compared to $3.1
million in the fiscal first quarter 2016, representing diluted
earnings per share of $0.08;
- Adjusted EBITDA, a non-GAAP financial
measure, increased to $14.6 million from $13.1 million in the
fiscal first quarter 2016, representing 11.4% growth including an
approximate $0.5 million benefit in the fiscal first quarter 2017
from the timing of advertising expense which will reverse
throughout the year;
- The opening of three franchise
restaurants and the strategic refranchising of five
company-operated restaurants; and
- The repurchase of approximately 641
thousand shares at an average price per share of $12.48, for $8.0
million.
Paul J.B. Murphy, III, Chief Executive Officer of Del Taco,
commented, “We delivered a successful quarter characterized by
comparable restaurant sales and profitability growth, despite
traffic challenges across our industry and other external
headwinds. With our expectation for continued sales momentum in the
second quarter and our underlying operational and product
initiatives in place for the balance of the year, we are
increasingly confident that we can achieve our 2017 annual guidance
and reach our stated goal of $1.5 million in average unit volume by
2018.”
Murphy continued, “Fresh Combined Solutions has strengthened our
QSR+ value oriented positioning, enabling us to take share from QSR
and grow relevance among fast casual occasions. The efficacy of
this strategy also supports our acceleration to mid-single-digit
restaurant growth in 2017 and our ability to accelerate that growth
in 2018 and beyond. Our new unit development is predicated on
quality of growth and will be well balanced across geographies and
between company and franchise partners.”
Review of Fiscal First Quarter 2017 Financial Results
Total revenue was $105.3 million, an increase of 8.2% compared
to $97.4 million in the fiscal first quarter 2016. The growth in
revenue was driven by an 8.2% increase in Company restaurant sales
and an 8.5% increase in franchise revenue.
Comparable restaurant sales increased 4.2% system-wide for the
fiscal first quarter 2017, resulting in a 7.4% increase on a
two-year basis. The Del Taco system has now generated comparable
restaurant sales growth for 14th consecutive quarters.
Company-operated comparable restaurant sales increased 4.0%,
marking the 19th consecutive quarter of comparable restaurant sales
growth. Franchise comparable restaurant sales increased 4.4%.
Net income was $4.2 million, representing $0.10 per diluted
share, compared to $3.1 million in the fiscal first quarter 2016,
representing $0.08 per diluted share.
Restaurant contribution, a non-GAAP financial measure, increased
10.6% year-over-year to $19.4 million. As a percentage of Company
restaurant sales, restaurant contribution increased approximately
40 basis points year-over-year to 19.1%. The improvement was driven
by the timing of advertising expense which drove a 50 basis point
reduction in occupancy and other operating expenses during the
quarter. Excluding this timing benefit, which will reverse
throughout the year, restaurant contribution margin would have
decreased by approximately 10 basis points, driven by a 100 basis
point increase in labor and related expenses partially offset by
improvements in other operating expenses and food and paper costs.
A reconciliation between restaurant contribution and the nearest
GAAP financial measure is included in the accompanying financial
data.
Adjusted EBITDA, a non-GAAP financial measure, increased to
$14.6 million compared to $13.1 million in the previous year’s
fiscal first quarter, representing 11.4% growth which includes an
approximate $0.5 million benefit from the timing of advertising
expense which will reverse throughout the year. A reconciliation
between adjusted EBITDA and the nearest GAAP financial measure is
included in the accompanying financial data.
Restaurant Portfolio
Our franchise partners opened three restaurants during the
fiscal first quarter 2017. As previously announced, we sold two
company-operated restaurants in the San Diego, CA area to a new
franchisee that had previously signed a development commitment in
that market. Additionally, we sold three company-operated
restaurants in Atlanta, GA to another new franchisee who had
previously signed a development agreement in the Atlanta area.
Lastly, we announced the signing of new franchise development
agreements for West Palm Beach, FL and Tennessee. These
transactions reflect strategic opportunities to help accelerate
system development.
Repurchase Program for Common Stock and Warrants
During the fiscal first quarter 2017, we repurchased 641,165
shares at an average price per share of $12.48. Subsequent to the
end of the quarter, we purchased 400,000 warrants from PW
Acquisitions, LP, a related party, for $3.75 per warrant.
We currently have $25.3 million remaining under our $50 million
repurchase authorization.
Fiscal Year 2017 Guidance
We are reaffirming the following guidance for fiscal year 2017,
which is a 52-week period ending January 2, 2018:
- System-wide same store sales growth of
approximately 2.0% to 4.0%;
- Total revenue between $466 million and
$476 million;
- Total company-operated restaurant sales
between $448 million and $458 million;
- Restaurant contribution margin between
19.8% and 20.3%;
- General and administrative expenses of
between approximately 8.1% and 8.5% of total revenue, including
incremental public company costs to support compliance with the
Sarbanes-Oxley Section 404(b) requirement during fiscal 2018;
- Effective tax rate of approximately
40.0%;
- Diluted earnings per share of
approximately $0.52 to $0.55;
- Adjusted EBITDA between $71.0 million
and $73.5 million;
- 23 to 26 new system-wide restaurant
openings; and
- Net capital expenditures totaling
approximately $43.0 million to $46.0 million including
approximately $16.0 to $17.0 million for new unit construction,
approximately $12.5 to $13.5 million for capitalized maintenance,
approximately $7.5 to $8.5 million for discretionary investment in
equipment, technology and remodels, and up to approximately $7.0
million for land acquisition for development after 2017.
We have not reconciled guidance for Adjusted EBITDA to the
corresponding GAAP financial measure because we do not provide
guidance for the various reconciling items. We are unable to
provide guidance for these reconciling items because we cannot
determine their probable significance, as certain items are outside
of our control and cannot be reasonably predicted due to the fact
that these items could vary significantly from period to period.
Accordingly, a reconciliation to the corresponding GAAP financial
measure is not available without unreasonable effort.
Conference Call
A conference call and webcast to discuss Del Taco’s financial
results is scheduled for 5:00 p.m. ET today. Hosting the conference
call and webcast will be Paul J.B. Murphy, III, Chief Executive
Officer; John D. Cappasola, Jr., President and Chief Brand Officer;
and Steven L. Brake, Executive Vice President and Chief Financial
Officer.
Interested parties may listen to the conference call via
telephone by dialing 1-201-689-8471. A telephone replay will be
available shortly after the call has concluded and can be accessed
by dialing 1-412-317-6671, the passcode is 13658730.
The webcast will be available at www.deltaco.com under the
investors section and will be archived on the site shortly after
the call has concluded.
Key Financial Definitions
Comparable restaurant sales growth reflects the change in
year-over-year sales for the comparable company, franchise and
total system restaurant base. Restaurants are included in the
comparable store base in the accounting period following its 18th
full month of operations and excludes restaurant closures.
Restaurant contribution is defined as company restaurant
sales less restaurant operating expenses, which are food and paper
costs, labor and related expenses and occupancy and other operating
expenses. Restaurant contribution margin is defined as
restaurant contribution as a percentage of company restaurant
sales. Restaurant contribution and restaurant contribution
margin are neither required by, nor presented in accordance
with, GAAP. Restaurant contribution and restaurant contribution
margin are supplemental measures of operating performance of
restaurants and the calculations thereof may not be comparable to
those reported by other companies. Restaurant contribution and
restaurant contribution margin have limitations as analytical
tools, and you should not consider them in isolation or as
substitutes for analysis of results as reported under U.S. GAAP.
Management believes that restaurant contribution and restaurant
contribution margin are important tools for investors because they
are widely-used metrics within the restaurant industry to evaluate
restaurant-level productivity, efficiency and performance.
Management uses restaurant contribution and restaurant contribution
margin as key performance indicators to evaluate the profitability
of incremental sales at Del Taco restaurants, to evaluate
restaurant performance across periods and to evaluate restaurant
financial performance compared with competitors. A reconciliation
between restaurant contribution and the nearest GAAP financial
measure is included in the accompanying financial data.
Adjusted EBITDA is defined as net income/loss prior to
interest expense, income taxes, and depreciation and amortization,
as adjusted to add back certain charges, such as stock-based
compensation expense and transaction-related costs, as these
expenses are not considered an indicator of ongoing company
performance. Adjusted EBITDA is a non-GAAP financial measure
and should not be considered as an alternative to operating income
or net income/loss as a measure of operating performance or cash
flows or as measures of liquidity. Non-GAAP financial measures are
not necessarily calculated the same way by different companies and
should not be considered a substitute for or superior to GAAP
results. We believe Adjusted EBITDA facilitates operating
performance comparisons from period to period by isolating the
effects of some items that vary from period to period without any
correlation to core operating performance or that vary widely among
similar companies. These potential differences may be caused by
variations in capital structures (affecting interest expense), tax
positions (such as the impact on periods or changes in effective
tax rates or net operating losses) and the age and book
depreciation of facilities and equipment (affecting relative
depreciation expense). We also present Adjusted EBITDA because (i)
we believe this measure is frequently used by securities analysts,
investors and other interested parties to evaluate companies in our
industry, (ii) we believe investors will find this measure useful
in assessing our ability to service or incur indebtedness, and
(iii) we use Adjusted EBITDA internally as a benchmark to compare
performance to that of competitors. A reconciliation between
Adjusted EBITDA and the nearest GAAP financial measure is included
in the accompanying financial data.
About Del Taco Restaurants, Inc.
Del Taco (NASDAQ: TACO) offers a unique variety of both Mexican
and American favorites such as burritos and fries, prepared fresh
in every restaurant’s working kitchen with the value and
convenience of a drive thru. Del Taco’s menu items taste better
because they are made with quality ingredients like freshly grated
cheddar, hand-chopped pico de gallo, sliced avocado, slow-cooked
beans made from scratch, and fresh-grilled marinated chicken and
carne asada. The brand’s UnFreshing Believable® campaign further
communicates Del Taco’s commitment to provide guests with the best
quality and value for their money. Founded in 1964, today Del Taco
serves more than three million guests each week at its more than
550 restaurants across 15 states. For more information,
visit www.deltaco.com.
Forward-Looking Statements
In addition to historical information, this release may contain
a number of “forward-looking statements” as defined in the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements include, without limitation, information concerning Del
Taco’s possible or assumed future results of operations, business
strategies, competitive position, industry environment, potential
growth opportunities and the effects of regulation. These
statements are based Del Taco’s management’s current expectations
and beliefs, as well as a number of assumptions concerning future
events. When used in this press release, the words “estimates,”
“projected,” “expects,” “anticipates,” “forecasts,” “plans,”
“intends,” “believes,” “seeks,” “target,” “may,” “will,” “should,”
“future,” “propose,” “preliminary,” “guidance,” “on track” and
variations of these words or similar expressions (or the negative
versions of such words or expressions) are intended to identify
forward-looking statements. Such forward-looking statements are
subject to known and unknown risks, uncertainties, assumptions and
other important factors, many of which are outside Del Taco’s
management’s control that could cause actual results to differ
materially from the results discussed in the forward-looking
statements. These risks included, without limitation, consumer
demand, our inability to successfully open company-operated or
franchised restaurants or establish new markets, competition in our
markets, our inability to grow and manage growth profitably,
adverse changes in food and supply costs, our inability to access
additional capital, changes in applicable laws or regulations, food
safety and foodborne illness concerns, our inability to manage
existing and to obtain additional franchisees, our inability to
attract and retain qualified personnel, our inability to profitably
expand into new markets, changes in, or the discontinuation of, the
Company’s repurchase program, and the possibility that we may be
adversely affected by other economic, business, and/or competitive
factors. Additional risks and uncertainties are identified and
discussed in Del Taco’s reports filed with the SEC, including under
Item 1A. Risk Factors in our Annual Report on Form 10-K for the
year ended January 3, 2017, and available at the SEC’s website at
www.sec.gov and the Company’s website at www.deltaco.com.
Forward-looking statements included in this release speak only
as of the date of this release. Del Taco undertakes no obligation
to update its forward-looking statements to reflect events or
circumstances after the date of this release or otherwise.
Del Taco Restaurants, Inc.
Consolidated Balance Sheets (In thousands, except share
and per share data) March 28, 2017 January 3,
2017 Assets (unaudited) Current assets: Cash and cash
equivalents $ 9,316 $ 8,795 Accounts and other receivables, net
3,147 4,141 Inventories 2,630 2,718 Prepaid expenses and other
current assets 2,290 4,204 Total current assets
17,383 19,858 Property and equipment, net 138,082 138,320 Goodwill
319,778 320,025 Trademarks 220,300 220,300 Intangible assets, net
24,030 24,782 Other assets, net 3,825 3,872 Total
assets $ 723,398 $ 727,157
Liabilities and shareholders'
equity Current liabilities: Accounts payable $ 16,025 $ 16,427
Other accrued liabilities 36,430 36,653 Current portion of capital
lease obligations and deemed landlord
financing liabilities
1,575 1,588 Total current liabilities 54,030 54,668
Long-term debt, capital lease obligations and deemed landlord
financing liabilities, excluding current
portion, net
173,466 173,743 Deferred income taxes 91,408 91,273 Other
non-current liabilities 30,011 30,140 Total
liabilities 348,915 349,824 Shareholders' equity: Preferred
stock, $0.0001 par value; 1,000,000 shares authorized; no
shares issued and outstanding
— — Common stock, $0.0001 par value; 400,000,000 shares authorized;
38,518,902 shares issued and outstanding
at March 28, 2017; 39,153,503
shares issued and outstanding at January
3, 2017
4 4 Additional paid-in capital 353,131 360,131 Accumulated other
comprehensive income 84 172 Retained earnings 21,264
17,026 Total shareholders' equity 374,483 377,333
Total liabilities and shareholders' equity $ 723,398 $ 727,157
Del Taco Restaurants,
Inc. Consolidated Statements of Comprehensive Income
(Unaudited) (In thousands, except share and per share
data) 12 Weeks Ended March 28, 2017
March 22, 2016 Revenue: Company restaurant sales $ 101,222 $
93,550 Franchise revenue 3,613 3,329 Franchise sublease income
510 524 Total revenue 105,345 97,403 Operating
expenses: Restaurant operating expenses: Food and paper costs
27,918 26,129 Labor and related expenses 33,221 29,784 Occupancy
and other operating expenses 20,718 20,123 General and
administrative 9,305 8,292 Depreciation and amortization 5,103
5,486 Occupancy and other - franchise subleases 481 503 Pre-opening
costs 26 93 Restaurant closure charges, net 9 178 (Gain) loss on
disposal of assets, net (49 ) 75 Total operating
expenses 96,732 90,663 Income from operations
8,613 6,740 Other expense Interest expense 1,543 1,472
Transaction-related costs — 65 Total other
expense 1,543 1,537 Income from operations
before provision for income taxes 7,070 5,203 Provision for income
taxes 2,832 2,142 Net income 4,238 3,061 Other
comprehensive loss: Change in fair value of interest rate cap, net
of tax (88 ) — Total other comprehensive loss
(88 ) — Comprehensive income $ 4,150 $ 3,061 Earnings
per share: Basic $ 0.11 $ 0.08 Diluted $ 0.10 $ 0.08
Weighted-average shares outstanding Basic 39,003,935 38,798,014
Diluted 40,375,061 38,798,301
Del
Taco Restaurants, Inc. Reconciliation of Net Income to
EBITDA and Adjusted EBITDA (Unaudited) (In
thousands) 12 Weeks Ended March 28, 2017
March 22, 2016 Net income $ 4,238 $ 3,061 Non-GAAP
adjustments: Provision for income taxes 2,832 2,142 Interest
expense 1,543 1,472 Depreciation and amortization 5,103
5,486
EBITDA 13,716
12,161 Stock-based compensation expense (a) 1,069 699
(Gain) loss on disposal of assets, net (b) (49 ) 75 Restaurant
closure charges, net (c) 9 178 Amortization of favorable and
unfavorable lease assets and liabilities, net (d) (147 ) (140 )
Transaction-related costs (e) — 65 Pre-opening costs (f) 26
93
Adjusted EBITDA $ 14,624 $
13,131 (a) Includes non-cash, stock-based
compensation. (b) (Gain) loss on disposal of assets, net includes
the loss or gain on disposal of assets related to sales,
retirements and replacement or write-off of leasehold improvements,
furniture, fixtures or equipment in the ordinary course of
business, net of amortization of deferred gains on assets sales
associated with sale-leaseback transactions and gains or losses
recorded associated with the sale of company-operated stores to
franchisees. (c) Includes costs related to future obligations
associated with the closure or net sublease shortfall of a
restaurant. (d) Includes amortization of favorable lease assets and
unfavorable lease liabilities. (e) Includes costs related to the
strategic sale process which commenced during 2014 and resulted in
the March 2015 stock purchase agreement and the June 2015 Business
Combination consummated pursuant to the Merger Agreement. (f)
Pre-opening costs consist of costs directly associated with the
opening of new restaurants and incurred prior to opening, including
restaurant labor, supplies, cash and non-cash rent expense and
other related pre-opening costs. These are generally incurred over
the three to five months prior to opening.
Del Taco Restaurants, Inc. Reconciliation
of Company Restaurant Sales to Restaurant Contribution
(Unaudited) (In thousands) 12 Weeks
Ended March 28, 2017 March 22, 2016 Company
restaurant sales $ 101,222 $ 93,550 Restaurant operating expenses
81,857 76,036 Restaurant contribution $
19,365 $ 17,514 Restaurant contribution margin
19.1 % 18.7 %
Del Taco
Restaurants, Inc. Restaurant Development 12
Weeks Ended March 28, 2017 March 22, 2016
Company-operated restaurant activity: Beginning of period
310 297 Openings — 1 Closures —
(1
)
Sold to franchisees (5 ) — Restaurants at end of period 305
297
Franchise-operated restaurant activity:
Beginning of period 241 247 Openings 3 1 Closures — (2 ) Purchased
from Company 5 — Restaurants at end of period 249
246
Total restaurant activity: Beginning of
period 551 544 Openings 3 2 Closures — (3 ) Restaurants at
end of period 554 543
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170504006279/en/
Del Taco Restaurants, Inc.Media:Julia Young, (646)
277-1280julia.young@icrinc.comorInvestor Relations:Raphael Gross,
(203) 682-8253investor@deltaco.com
Del Taco Restaurants (NASDAQ:TACO)
Graphique Historique de l'Action
De Juin 2024 à Juil 2024
Del Taco Restaurants (NASDAQ:TACO)
Graphique Historique de l'Action
De Juil 2023 à Juil 2024