System-Wide Comparable Restaurant Sales Grew
4.1%; Positive Trends at Both Company-operated and Franchised
Restaurants
Reduced Outstanding Revolver Balance by $21
Million
Presenting at CL King & Associates’ 18th
Annual Best Ideas Conference Tomorrow
Del Taco Restaurants, Inc. (“Del Taco” or the “Company”),
(NASDAQ: TACO), the second largest Mexican-American quick service
restaurant chain by units in the United States, today reported
preliminary unaudited sales results for the 12-week period ending
September 8, 2020 and provided a liquidity update.
John D. Cappasola, Jr., President and Chief Executive Officer of
Del Taco, commented, “Our unique value-oriented QSR+ positioning
combined with our expanding off-premise convenience is proving
resilient and resonating with guests through our contactless or
limited contact channels. I am pleased our nimble and focused
approach resulted in comparable restaurant sales that sequentially
improved from the fiscal second quarter and turned positive at both
company-operated and franchised restaurants during the fiscal third
quarter. This momentum enabled us to reduce our outstanding
revolver balance by $21 million during the fiscal third
quarter.”
Cappasola continued, “We are thankful for our restaurant teams,
franchisees and support center employees who are continuing to
excel in this challenging environment while delivering a great
guest experience. We recently became the first national Mexican QSR
to launch a new Crispy Chicken menu featuring unique flavors and
products across our barbell menu for an unbeatable value.
Outstanding training and consistent execution are driving high
overall guest satisfaction scores for Crispy Chicken and helping to
accelerate comparable restaurant sales trends.”
Fiscal Third Quarter 2020 Sales Highlights
- System-wide comparable restaurant sales increased 4.1%;
- Company-operated comparable restaurant sales increased
2.0%;
- Franchised comparable restaurant sales increased 6.5%;
- Total revenue of $120.7 million, representing a 0.4% increase
from the fiscal third quarter 2019;
- Company-operated restaurant sales of $109.5 million,
representing a 1.4% decrease from the fiscal third quarter 2019
primarily due to fewer company-operated restaurants open during
2020 compared to 2019 due to our refranchising activity; and
- One company-operated and four franchise restaurants opened and
two franchise restaurants closed.
The expected sales results are preliminary and unaudited, have
not been reviewed by the Company’s independent registered public
accountants, and remain subject to the completion of normal
quarter-end accounting procedures and adjustments and are subject
to change.
Liquidity
During the fiscal third quarter, the Company reduced its
outstanding revolving credit facility borrowing by $21 million to
$124 million from $145 million at the end of both the fiscal second
quarter and last year’s fiscal fourth quarter. The Company
currently has $108.7 million available under its revolving credit
facility.
Investor Conference Participation
As a reminder, John D. Cappasola, Jr., President and Chief
Executive Officer, and Steven L. Brake, Executive Vice President
and Chief Financial Officer, will present at CL King &
Associates’ 18th Annual Best Ideas Conference tomorrow at 3:30 PM
ET and hold investor meetings throughout the day.
The presentation will be webcast live and later archived at
www.deltaco.com under the investors section. The Company has posted
an investor deck to its investors website that will accompany the
presentation.
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.
About Del Taco Restaurants, Inc.
Del Taco (NASDAQ: TACO) offers a unique variety of both Mexican
and American favorites such as burritos and fries, prepared fresh
in every restaurant's working kitchen with the value and
convenience of a drive-thru. Del Taco's menu items taste better
because they are made with quality ingredients like fresh grilled
chicken and carne asada steak, hand-sliced avocado, hand-grated
cheddar cheese, slow-cooked beans made from scratch, and creamy
Queso Blanco. The brand's campaign further communicates Del Taco's
commitment to providing guests with the best quality and value for
their money through cooking, chopping, shredding and grilling menu
items from scratch. Founded in 1964, today Del Taco serves more
than three million guests each week at its approximately 600
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 on Del Taco’s management’s current
expectations and beliefs, as well as a number of assumptions
concerning future events. When used in this press release, the
words “estimates,” “projected,” “expects,” “anticipates,”
“forecasts,” “plans,” “intends,” “believes,” “seeks,” “target,”
“may,” “will,” “should,” “future,” “propose,” “preliminary,”
“guidance,” “on track” and variations of these words or similar
expressions (or the negative versions of such words or expressions)
are intended to identify forward-looking statements. Such
forward-looking statements are subject to known and unknown risks,
uncertainties, assumptions and other important factors, many of
which are outside Del Taco’s management’s control that could cause
actual results to differ materially from the results discussed in
the forward-looking statements. These risks include, without
limitation, the impact of the COVID-19 pandemic, 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 (including
minimum wage regulations), food safety and foodborne illness
concerns, our inability to manage existing and to obtain additional
franchisees, our inability to successfully execute our portfolio
optimization strategy, 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 Part I. Item
1A. Risk Factors in our Annual Report on Form 10-K for the year
ended December 31, 2019 and Part II., Item 1A. Risk Factors in our
Quarterly Report on Form 10-Q for the period ended June 16, 2020,
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: https://www.businesswire.com/news/home/20200915006212/en/
Investor Relations: Raphael Gross (203) 682-8253
investor@deltaco.com
Del Taco Restaurants (NASDAQ:TACO)
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