Del Taco Restaurants Inc.

03/08/2021 | Press release | Distributed by Public on 03/08/2021 15:13

Del Taco Restaurants, Inc. Reports Fiscal Fourth Quarter and Fiscal Year 2020 Financial Results

LAKE FOREST, Calif.--(BUSINESS WIRE)-- 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 fiscal fourth quarter and fiscal year 2020 financial results for the 16-week and 52-week periods ending December 29, 2020 and provided a business update.

Management Commentary

John D. Cappasola, Jr., President and Chief Executive Officer of Del Taco, commented, 'We delivered a solid fourth quarter performance in terms of comparable restaurant sales growth, restaurant contribution margin and adjusted EBITDA performance. Our great food, great value, and great experiences drove overall satisfaction scores to record levels, while the success of our Crispy Chicken menu and seasonal Tamale promotion enabled us to grow system-wide comparable restaurant sales while navigating through the clear headwinds affecting our industry. The hard work of our restaurant teams and support center staff helped us manage our margins and profitability despite the many challenges presented by the ongoing pandemic. In doing so, during the second half of 2020 we demonstrated not only the resilience of our business, but also accelerated performance which sets us up for success in 2021.'

Cappasola continued, 'Both company-operated and franchise restaurants continue to generate positive comparable restaurant sales to date in the first quarter and have demonstrated sequential improvement compared to the fourth quarter last year. We further expect accelerated performance for the remainder of the first quarter and through the second quarter as we lap the initial COVID-19 impact. In addition, we believe our five drivers of acceleration, coupled with ongoing margin management strategies, will help drive our results in the second half of the year and facilitate modest restaurant contribution margin expansion on an annual basis.'

Fiscal Fourth Quarter 2020 Highlights

  • System-wide comparable restaurant sales increased 3.8%;
    • Company-operated comparable restaurant sales increased 0.6%;
    • Franchised comparable restaurant sales increased 7.5%;
  • Total revenue of $156.7 million, representing a 0.2% decline from the fiscal fourth quarter 2019;
  • Company-operated restaurant sales of $141.7 million, representing a 2.2% decline from the fiscal fourth quarter 2019 primarily due to fewer company-operated restaurants open during 2020 compared to 2019 due to our refranchising activity;
    • Company-operated comparable restaurant sales within Los Angeles, Orange and Clark (Las Vegas) counties representing approximately half of company-operated restaurants were notably negative, while all other company-operated counties had positive comparable restaurant sales;
  • Net income of $7.5 million, or $0.20 per diluted share, compared to net loss of $114.1 million, or $3.08 per diluted share, in the fiscal fourth quarter 2019;
  • Adjusted net income* of $7.5 million, or $0.20 per diluted share, compared to adjusted net income* of $6.7 million, or $0.18 per diluted share, in the fiscal fourth quarter 2019;
  • Restaurant contribution* margin of 17.0% compared to 17.4% in the fiscal fourth quarter 2019;
  • Adjusted EBITDA* of $18.4 million compared to $20.5 million in the fiscal fourth quarter 2019; and
  • Two franchise-operated restaurants opened and two franchise-operated restaurants closed.

Fiscal Year 2020 Highlights

  • System-wide comparable restaurant sales decreased 0.9%;
    • Company-operated comparable restaurant sales decreased 2.9%;
    • Franchised comparable restaurant sales increased 1.4%;
  • Total revenue of $491.9 million, representing a 4.1% decrease from the fiscal year 2019;
  • Company-operated restaurant sales of $446.8 million, representing a 5.7% decline from the fiscal year 2019 in part due to fewer company-operated restaurants open during 2020 compared to 2019 due to our refranchising activity;
  • Net loss of $89.7 million, or $2.41 per diluted share, compared to net loss of $118.3 million, or $3.20 per diluted share, in fiscal year 2019;
  • Adjusted net income* of $13.5 million, or $0.36 per diluted share, compared to adjusted net income* of $17.7 million, or $0.47 per diluted share, in the fiscal year 2019;
  • Restaurant contribution* margin of 16.1% compared to 17.3% in the fiscal year 2019;
  • Adjusted EBITDA* of $54.6 million compared to $63.8 million in the fiscal year 2019; and
  • Three company-operated and seven franchise-operated restaurants opened, two company-operated and eight franchise-operated restaurants closed, and six company-operated restaurants were sold to franchisees.

* Adjusted net income, restaurant contribution, and adjusted EBITDA are non-GAAP measures and defined below under 'Key Financial Definitions'. Please see the reconciliation of non-GAAP measures accompanying this release.

Review of Fiscal Fourth Quarter 2020 Financial Results

Total revenue decreased 0.2% to $156.7 million compared to $157.1 million in the fiscal fourth quarter 2019. Comparable restaurant sales increased 3.8% system-wide, increased 0.6% at company-operated restaurants, and increased 7.5% at franchised restaurants.

Net income was $7.5 million, or $0.20 per diluted share, compared to net loss of $114.1 million, or $3.08 per diluted share, last year.

Adjusted net income*, which excludes various items, was $7.5 million or $0.20 per diluted share compared to adjusted net income* of $6.7 million or $0.18 per diluted share last year.

Restaurant contribution* was $24.1 million compared to $25.2 million in the fiscal fourth quarter 2019. As a percentage of company-operated restaurant sales, restaurant contribution margin decreased 40 basis points year-over-year to 17.0%. The decrease was the result of an approximate 110 basis point decrease in food and paper costs, an approximate 20 basis point decrease in labor and related expenses, and an approximate 170 basis point increase in occupancy and other operating expenses.

Adjusted EBITDA* was $18.4 million compared to $20.5 million in the fiscal fourth quarter 2019.

Liquidity

The Company reduced its outstanding revolving credit facility borrowing by $9 million during the fiscal fourth quarter 2020 to $115 million from $124 million at the end of the fiscal third quarter 2020. At the end of fiscal year 2020 the Company's debt, net of cash, totaled $106.7 million compared to $143.4 million at the end of fiscal year 2019, representing a reduction of approximately $36.7 million. At the end of fiscal year 2020, the Company had $117.7 million of remaining availability under its revolving credit facility.

Common Stock Repurchase Program

The Company repurchased 496,356 shares of common stock at average price of $8.49 per share for a total of $4.2 million during the fiscal fourth quarter 2020. At the end of fiscal year 2020, approximately $18.1 million remains under the $75 million repurchase authorization.

Dividend Program Initiation

The Company's first quarterly dividend of $0.04 per share of common stock was paid on February 23, 2021 to shareholders of record at the close of business on February 2, 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.

Restaurant Portfolio

During the fiscal fourth quarter 2020, two franchised restaurants opened and two franchised restaurants closed. Del Taco ended fiscal year 2020 with a system-wide total of 596 restaurants consisting of 295 company-operated and 301 franchised restaurants.

Fiscal Year 2021 Guidelines

Due to the continued uncertainty surrounding COVID-19 and its impact on the business, the Company is not able to provide a full outlook with respect to the 2021 fiscal year. However, the Company is able to provide the following guidelines:

  • Commodity inflation of approximately 1%, excluding any adverse impacts from COVID-19 on the supply chain;
  • Labor and related inflation of approximately 6%, due to California regulations including a minimum wage increase from $13 to $14 per hour that began on January 1, 2021 and a mandated minimum salary of twice the minimum wage, which impacts slightly over half of our General Managers;
  • Menu price increase of approximately 4%;
  • Modest restaurant contribution margin* expansion compared to the 16.1% achieved during fiscal 2020;
  • General and administrative expenses, inclusive of stock-based compensation, at approximately 9.0% of total revenue;
  • Effective tax rate of approximately 27%;
  • Capital expenditures in the low $30 million range, including expenditures to maintain or enhance our existing restaurants, company-operated restaurant openings, our test remodel program and various discretionary technology and restaurant level investments;
  • Four company-operated restaurant openings, of which one has already opened; and
  • Eight franchised restaurant openings, of which one has already opened, for a dozen system-wide openings.

Conference Call and Webcast

A conference call and webcast is scheduled for 4:30 p.m. ET today. Hosting the conference call and webcast will be John D. Cappasola, Jr., President and Chief Executive Officer; and Steven L. Brake, Executive Vice President and Chief Financial Officer.

Interested parties may listen to the conference call via telephone by dialing 201-689-8471. A telephone replay will be available shortly after the call has concluded and can be accessed by dialing 412-317-6671; the passcode is 13716256.

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 marginare 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 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.

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; (gain) loss on disposal of assets and adjustments to assets held for sale, net; impairment of goodwill; impairment of trademarks; impairment of long-lived assets; restaurant closure charges, net; amortization of favorable and unfavorable lease assets and liabilities, net; pre-opening costs; sublease income for closed restaurants; executive transition costs; and other income; 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 and (ii) we use Adjusted EBITDA internally as a benchmark to compare performance to that of competitors.

Adjusted net income* represents company net income before sublease income for closed restaurants; impairment of goodwill; impairment of trademarks; impairment of long-lived assets; restaurant closure charges, net; (gain) loss on disposal of assets and adjustments to assets held for sale, net; other income; executive transition costs; net of tax. Adjusted diluted net income per share* represents company diluted net income per share before sublease income for closed restaurants; impairment of goodwill; impairment of trademarks; impairment of long-lived assets; restaurant closure charges, net; (gain) loss on disposal of assets and adjustments to assets held for sale, net; other income; executive transition costs; and tax impact of adjustments, net of tax.

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, sliced avocado, freshly grated cheddar cheese, slow-cooked beans made from scratch, and creamy Queso Blanco.

Founded in 1964, today Del Taco serves more than three million guests each week at its approximately 600 restaurants across 16 states. Del Taco's commitment to providing guests with the best quality and value for their money originates from cooking, chopping, shredding and grilling menu items from scratch. 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 September 8, 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.

Del Taco Restaurants, Inc.
Consolidated Balance Sheets
(In thousands, except share and per share data)
December 29, 2020 December 31, 2019
Assets
Current assets:
Cash and cash equivalents

$ 7,912

$ 1,421

Accounts and other receivables, net

5,463

3,580

Inventories

2,799

3,123

Prepaid expenses and other current assets

2,078

2,289

Assets held for sale

1,495

8,411

Total current assets

19,747

18,824

Property and equipment, net

146,706

156,921

Operating lease right-of-use assets

249,071

258,278

Goodwill

108,979

192,739

Trademarks

208,400

220,300

Intangible assets, net

9,754

10,827

Other assets, net

4,652

4,568

Total assets

$ 747,309

$ 862,457

Liabilities and shareholders' equity
Current liabilities:
Accounts payable

$ 18,683

$ 19,652

Other accrued liabilities

45,413

34,577

Current portion of finance lease obligations and other debt

190

220

Current portion of operating lease liabilities

22,648

17,848

Total current liabilities

86,934

72,297

Long-term debt, finance lease obligations and other debt, excluding current portion, net

114,418

144,581

Operating lease liabilities, excluding current portion

251,958

257,361

Deferred income taxes

61,485

69,510

Other non-current liabilities

19,760

16,601

Total liabilities

534,555

560,350

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; 36,828,237
shares issued and outstanding at December 29, 2020; 37,059,202
shares issued and outstanding at December 31, 2019

4

4

Additional paid-in capital

333,712

333,379

Accumulated other comprehensive loss

-

(52

)

Accumulated deficit

(120,962

)

(31,224

)

Total shareholders' equity

212,754

302,107

Total liabilities and shareholders' equity

$ 747,309

$ 862,457

Del Taco Restaurants, Inc.
Consolidated Statements of Comprehensive Income (Loss)
(In thousands, except share and per share data)
16 Weeks Ended 52 Weeks Ended
December 29, 2020 December 31, 2019 December 29, 2020 December 31, 2019
(Unaudited) (Unaudited)
Revenue:
Company restaurant sales

$ 141,689

$ 144,849

$ 446,805

$ 473,991

Franchise revenue

6,683

5,810

20,763

19,002

Franchise advertising contributions

5,121

4,467

15,116

14,516

Franchise sublease and other income

3,228

1,970

9,199

5,442

Total revenue

156,721

157,096

491,883

512,951

Operating expenses:
Restaurant operating expenses:
Food and paper costs

37,857

40,277

120,845

130,711

Labor and related expenses

46,188

47,553

148,183

156,095

Occupancy and other operating expenses

33,567

31,855

105,666

105,376

General and administrative

13,857

12,141

43,996

43,877

Franchise advertising expenses

5,121

4,467

15,116

14,516

Depreciation and amortization

8,122

7,826

26,599

25,488

Occupancy and other - franchise subleases and other

2,995

1,605

8,083

4,463

Pre-opening costs

112

930

471

1,650

Impairment of goodwill

-

118,250

87,277

118,250

Impairment of trademarks

-

-

11,900

-

Impairment of long-lived assets

-

2,058

8,287

7,159

Restaurant closure charges, net

642

1,244

2,048

2,961

(Gain) loss on disposal of assets and adjustments to assets held for
sale, net

(296

)

659

401

9,448

Total operating expenses

148,165

268,865

578,872

619,994

Income (loss) from operations

8,556

(111,769

)

(86,989

)

(107,043

)

Other expense (income), net:
Interest expense

1,081

2,066

4,811

7,235

Other income

-

(161

)

-

(364

)

Total other expense, net

1,081

1,905

4,811

6,871

Income (loss) from operations before (benefit) provision for income taxes

7,475

(113,674

)

(91,800

)

(113,914

)

(Benefit) provision for income taxes

(34

)

459

(2,062

)

4,371

Net income (loss)

7,509

(114,133

)

(89,738

)

(118,285

)

Other comprehensive income (loss):
Change in fair value of interest rate cap, net of tax

-

(24

)

-

(364

)

Reclassification of interest rate cap amortization included in net
income (loss), net of tax

-

58

52

132

Total other comprehensive income (loss), net

-

34

52

(232

)

Comprehensive income (loss)

$ 7,509

$ (114,099

)

$ (89,686

)

$ (118,517

)

Earnings (loss) per share:
Basic

$ 0.20

$ (3.08

)

$ (2.41

)

$ (3.20

)

Diluted

$ 0.20

$ (3.08

)

$ (2.41

)

$ (3.20

)

Weighted average shares outstanding
Basic

37,183,215

37,059,202

37,161,921

37,018,445

Diluted

37,427,136

37,059,202

37,161,921

37,018,445

Del Taco Restaurants, Inc.
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
(Unaudited)
(In thousands)
16 Weeks Ended 52 Weeks Ended
December 29, 2020 December 31, 2019 December 29, 2020 December 31, 2019
Net income (loss)

$ 7,509

$ (114,133

)

$ (89,738

)

$ (118,285

)

Non-GAAP adjustments:
(Benefit) provision for income taxes

(34

)

459

(2,062

)

4,371

Interest expense

1,081

2,066

4,811

7,235

Depreciation and amortization

8,122

7,826

26,599

25,488

EBITDA

16,678

(103,782

)

(60,390

)

(81,191

)

Stock-based compensation expense (a)

1,747

1,692

5,652

6,293

(Gain) loss on disposal of assets and adjustments to assets
held for sale, net (b)

(296

)

659

401

9,448

Impairment of goodwill (c)

-

118,250

87,277

118,250

Impairment of trademarks (d)

-

-

11,900

-

Impairment of long-lived assets (e)

-

2,058

8,287

7,159

Restaurant closure charges, net (f)

642

1,244

2,048

2,961

Amortization of favorable and unfavorable lease
assets and liabilities, net (g)

(112

)

(50

)

(297

)

-

Pre-opening costs (h)

112

930

471

1,650

Sublease income for closed restaurants (i)

(330

)

(317

)

(1,075

)

(871

)

Executive transition costs (j)

-

-

287

438

Other income (k)

-

(161

)

-

(364

)

Adjusted EBITDA

$ 18,441

$ 20,523

$ 54,561

$ 63,773

(a) Includes non-cash, stock-based compensation.
(b) Loss on disposal of assets and adjustments to assets held for sale, net includes adjustments to reduce the carrying amount for assets held for sale to estimated fair value less cost to sell, loss or gain on disposal of assets related to sales, retirements and replacement or write-off of leasehold improvements or equipment in the ordinary course of business, net gains or losses recorded associated with the sale of company-operated restaurants to franchisees, gains from the write-off of right-of-use assets and operating lease liabilities related to the termination of leases and net gains or losses recorded associated with sale-leaseback transactions.
(c) Includes non-cash charges related to impairment of goodwill.
(d) Includes non-cash charges related to impairment of trademarks.
(e) Includes non-cash charges related to impairment of long-lived assets.
(f) Restaurant closure costs include rent expense, non-lease executory costs, other direct costs associated with previously closed restaurants and future obligations associated with the closure of a restaurant.
(g) Includes amortization of favorable lease assets and unfavorable lease liabilities.
(h) 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.
(i) Includes other sublease income related to closed restaurants that have been subleased to third parties.
(j) Includes costs associated with the transition of former Company executives, such as severance expense.
(k) During 2019, other income consists of insurance proceeds related to a fire at a company-operated restaurant.
Del Taco Restaurants, Inc.
Reconciliation of Company Restaurant Sales to Restaurant Contribution
(Unaudited)
(In thousands)
16 Weeks Ended 52 Weeks Ended
December 29, 2020 December 31, 2019 December 29, 2020 December 31, 2019
Company restaurant sales

$ 141,689

$ 144,849

$ 446,805

$ 473,991

Restaurant operating expenses

117,612

119,685

374,694

392,182

Restaurant contribution

$ 24,077

$ 25,164

$ 72,111

$ 81,809

Restaurant contribution margin

17.0

%

17.4

%

16.1

%

17.3

%

Del Taco Restaurants, Inc.
Reconciliation of Income (Loss) from Operations to Restaurant Contribution
(Unaudited)
(In thousands)
16 Weeks Ended 52 Weeks Ended
December 29, 2020 December 31, 2019 December 29, 2020 December 31, 2019
Income (loss) from operations

$ 8,556

$ (111,769

)

$ (86,989

)

$ (107,043

)

Less:
Franchise revenue

(6,683

)

(5,810

)

(20,763

)

(19,002

)

Franchise advertising contributions

(5,121

)

(4,467

)

(15,116

)

(14,516

)

Franchise sublease income and other

(3,228

)

(1,970

)

(9,199

)

(5,442

)

Plus:
General and administrative

13,857

12,141

43,996

43,877

Franchise advertising expenses

5,121

4,467

15,116

14,516

Depreciation and amortization

8,122

7,826

26,599

25,488

Occupancy and other - franchise
subleases and other

2,995

1,605

8,083

4,463

Pre-opening costs

112

930

471

1,650

Impairment of goodwill

-

118,250

87,277

118,250

Impairment of trademarks

-

-

11,900

-

Impairment of long-lived assets

-

2,058

8,287

7,159

Restaurant closure charges, net

642

1,244

2,048

2,961

(Gain) loss on disposal of assets and
adjustments to assets held for sale, net

(296

)

659

401

9,448

Restaurant contribution

$ 24,077

$ 25,164

$ 72,111

$ 81,809

Company restaurant sales

$ 141,689

$ 144,849

$ 446,805

$ 473,991

Restaurant contribution margin

17.0

%

17.4

%

16.1

%

17.3

%

Del Taco Restaurants, Inc.
Reconciliation of Net Income (Loss) to Adjusted Net Income
(Unaudited)
(In thousands, except per share data)
16 Weeks Ended 52 Weeks Ended
December 29, 2020 December 31, 2019 December 29, 2020 December 31, 2019
Net income (loss), as reported

$ 7,509

$ (114,133

)

$ (89,738

)

$ (118,285

)

Sublease income for closed restaurants (a)

(330

)

(317

)

(1,075

)

(871

)

Impairment of goodwill (b)

-

118,250

87,277

118,250

Impairment of trademarks (c)

-

-

11,900

-

Impairment of long-lived assets (d)

-

2,058

8,287

7,159

Restaurant closure charges, net (e)

642

1,244

2,048

2,961

(Gain) loss on disposal of assets and adjustments to assets
held for sale, net (f)

(296

)

659

401

9,448

Other income (g)

-

(161

)

-

(364

)

Executive transition costs (h)

-

-

287

438

Tax impact of adjustments (i)

(4

)

(880

)

(5,886

)

(1,060

)

Non-GAAP adjusted net income

$ 7,521

$ 6,720

$ 13,501

$ 17,676

Earnings (loss) per share (as reported):
Basic

$ 0.20

$ (3.08

)

$ (2.41

)

$ (3.20

)

Diluted

$ 0.20

$ (3.08

)

$ (2.41

)

$ (3.20

)

Weighted average shares outstanding (as reported):
Basic

37,183,215

37,059,202

37,161,921

37,018,445

Diluted

37,427,136

37,059,202

37,161,921

37,018,445

Adjusted earnings per share:
Basic

$ 0.20

$ 0.18

$ 0.36

$ 0.48

Diluted

$ 0.20

$ 0.18

$ 0.36

$ 0.47

Shares used in computing adjusted earnings per share:
Basic

37,183,215

37,059,202

37,161,921

37,018,445

Diluted

37,427,136

37,096,723

37,267,643

37,237,125

(a) Includes other sublease income related to closed restaurants that have been subleased to third parties.
(b) Includes non-cash charges related to impairment of goodwill.
(c) Includes non-cash charges related to impairment of trademarks.
(d) Includes non-cash charges related to impairment of long-lived assets.
(e) Restaurant closure costs include rent expense, non-lease executory costs, other direct costs associated with previously closed restaurants and future obligations associated with the closure of a restaurant.
(f) Loss on disposal of assets and adjustments to assets held for sale, net includes adjustments to reduce the carrying amount for assets held for sale to estimated fair value less cost to sell, loss or gain on disposal of assets related to sales, retirements and replacement or write-off of leasehold improvements or equipment in the ordinary course of business, net gains or losses recorded associated with the sale of company-operated restaurants to franchisees, gains from the write-off of right-of-use assets and operating lease liabilities related to the termination of leases and net gains or losses recorded associated with sale-leaseback transactions.
(g) During 2019, other income consists of insurance proceeds related to a fire at a company-operated restaurant.
(h) Includes costs associated with the transition of former Company executives, such as severance expense.
(i) Represents the income tax associated with the adjustments in (a) through (h) that are deductible for income tax purposes.
Del Taco Restaurants, Inc.
Restaurant Development
16 Weeks Ended 52 Weeks Ended
December 29, 2020 December 31, 2019 December 29, 2020 December 31, 2019
Company-operated restaurant activity:
Beginning of period

295

312

300

322

Openings

-

7

3

10

Closures

-

(1

)

(2

)

(5

)

Purchased from franchisees

-

-

-

4

Sold to franchisees

-

(18

)

(6

)

(31

)

Restaurants at end of period

295

300

295

300

Franchise-operated restaurant activity:
Beginning of period

301

274

296

258

Openings

2

6

7

14

Closures

(2

)

(2

)

(8

)

(3

)

Sold to Company

-

-

-

(4

)

Purchased from Company

-

18

6

31

Restaurants at end of period

301

296

301

296

Total restaurant activity:
Beginning of period

596

586

596

580

Openings

2

13

10

24

Closures

(2

)

(3

)

(10

)

(8

)

Restaurants at end of period

596

596

596

596

View source version on businesswire.com : https://www.businesswire.com/news/home/20210308005782/en/

Investor Relations:
Raphael Gross
(203) 682-8253
[email protected]

Source: Del Taco Restaurants, Inc.