News

Del Taco has 'incredibly successful year'

Del Taco has released Q4 and fiscal year 2015 financial results.

March 8, 2016

Paul J.B. Murphy III, president and CEO of Del Taco Restaurants Inc, called 2015 "an incredibly successful year," according to a company press release.

"We solidified our QSR+ positioning by elevating brand perceptions and guest experiences, Murphy said when discussing the chain’s fiscal fourth quarter and fiscal year 2015 financial results. "Strong execution of our initiatives is reflected in the progress we made in increasing operating margins and towards reaching our average unit volume goal of $1.5 million by 2018.

"This past year also marked Del Taco's entry into the public markets, laying the foundation for our next growth phase. I thank all of our team members for their hard work without which these achievements would not have been possible."

The chain also announced that its Board of Directors has authorized a share repurchase program under which the company may repurchase up to $25 million of its outstanding common stock and warrants.

"As we look to 2016, we are striving to improve the guest experience with a great lineup of new products including continued innovation within our Buck & Under value platform," Murphy said. "We are also investing in our operations to drive speed of service and expand our QSR+ capabilities, and we are focused on embedding and enhancing our positioning by taking a fresh approach to everything we do."

Q4 2015 highlights:

• System-wide comparable restaurant sales growth of 5.8 percent and company-owned comparable restaurant sales growth of 5.9 percent, marking the ninth and 14th consecutive quarter of gains, respectively; company-owned comparable restaurant sales growth comprised check growth of 6 percent, including over 2 percent of menu-mix growth, and approximately flat transactions at (0.1 percent);
• Total revenue of $133.4 million, representing 6.1-percent growth from the fiscal fourth quarter of 2014;
• Restaurant sales of $128.1 million, representing 6 percent growth from the fiscal fourth quarter of 2014;
• Restaurant contribution margin, a non-GAAP financial measure, of 21.2 percent, an improvement of approximately 90 basis points from the fiscal fourth quarter of 2014;
• Net income increased to $4.8 million from a net loss of $8.1 million in the fiscal fourth quarter of 2014, representing diluted earnings (loss) per share of 12 cents and ($2.08) in the fiscal fourth quarter of 2015 and 2014, respectively;
• Adjusted EBITDA, a non-GAAP financial measure, of $21.2 million, representing 8.4-percent growth from the fiscal fourth quarter of 2014; and
• The opening of nine restaurants system wide, including three company-owned and six franchised restaurants.

Fiscal year 2015 highlights:

• System-wide comparable restaurant sales growth of 6.3 percent and company-owned comparable restaurant sales growth of 6.4 percent; company-owned comparable restaurant sales growth comprises check growth of 4.8 percent and transaction growth of 1.6 percent;
• Total revenue of $424 million, representing 7.1-percent growth from the prior fiscal year;
• Restaurant sales of $407.6 million, representing 7 percent growth from the prior fiscal year;
• Restaurant contribution margin, a non-GAAP financial measure, of 20 percent, an improvement of approximately 130 basis points from the prior fiscal year;
• Adjusted EBITDA, a non-GAAP financial measure, of $65.0 million, representing 10.4 percent growth from the prior fiscal year; and
• The opening of 12 restaurants system wide, including six company-owned and six franchised restaurants.

Fiscal year 2016 guidance:

The company is providing the following guidance for fiscal year 2016, the 53-week period ending Jan. 3, 2017, and currently expects the following for fiscal year 2016:

• System-wide same-store sales growth of approximately 2.5 percent to 4.5 percent;
• Total revenue between $439 million and $449 million;
• Total company-owned restaurant sales between $422 million and $432 million;
• Restaurant contribution margin between 19.8 percent and 20.3 percent;
• 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;
• General and administrative expenses of between approximately 7.9 percent and 8.3 percent of total revenue, including incremental public company costs and non-cash stock-based compensation;
• Adjusted EBITDA between $67.5 million and $70 million;
• Effective tax rate of approximately 40 percent;
• Diluted earnings per share of approximately 53 cents and 56 cents;
• Fifteen to 18 new system-wide restaurant openings, including the company-owned restaurant that opened in early January 2016; and
• Net capital expenditures totaling approximately $36 to $41 million, including approximately $10 to $12.5 million for new unit construction, approximately $10 to $11 million for capitalized maintenance, approximately $10 to $11.5 million for discretionary investment in equipment and technology, and approximately $6 million for land acquisition for development after 2016.