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Del Taco draws down $50M on revolving credit facility, withdraws 2020 guidance

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April 2, 2020

Del Taco Restaurants, Inc. withdrew its 2020 earnings outlook and has drawn down $50 million on its revolving credit facility, among several measures taken to respond to COVID-19 pandemic, calling it "precautionary measure" that will help the brand stay flexible amid business constraints due to the crisis. 

"We have also deferred planned non-essential capital expenditures and have adjusted our operating expenses in view of the current economic uncertainties," said Del Taco President and CEO John Cappasola, Jr., in the release. "We believe that our actions have us well positioned for both the near term and when this crisis is firmly behind us." 

The company said that including the draw down and existing cash, it now has more than $56 million in cash on hand. The company plans to update its earnings outlook during its Q1 earnings call, the date of which has not been set. 

With approximately 600 restaurants across 15 states, the brand typically serves more than 3 million guests each week. But due to the pandemic, the brand has closed its dining rooms and continues to operate through limited contact or contactless channels such as drive-thru, takeout and delivery.

Del Taco said prior that before it introduced delivery, including its third provider adoption late last year, its drive-thru and takeout channels comprised more than 85% of its sales. But its continuing adoption of more delivery providers has shown an increasing number of orders are now coming from that channel. 

The company said it successfully transitioned its Restaurant Support Center into a virtual office on March 16, and is not now having any "meaningful disruptions to its supply chain." Of Del Taco's 597 system-wide restaurants, there are currently four temporary closures, including one company-operated restaurant.

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