Strong 4Q15 System-Wide Comparable Restaurant Sales of +5.8%
Company Provides Initial 2016 Outlook
Del Taco Restaurants, Inc. (“Del Taco” or the “Company”), (NASDAQ: TACO, TACOW), the second largest Mexican-American QSR chain by units in the United States, operating restaurants under the name Del Taco, today announced preliminary unaudited fiscal fourth quarter 2015 sales results ahead of its presentation tomorrow at the ICR Conference. Del Taco also provided updated guidance for fiscal year 2015 as well as initial guidance for fiscal year 2016.
Fiscal Fourth Quarter 2015 Highlights
- System-wide comparable restaurant sales growth of approximately 5.8% and company-owned comparable restaurant sales growth of approximately 5.9%, marking the ninth and fourteenth consecutive quarter of gains, respectively;
- Company-owned comparable restaurant sales growth comprises check growth of 6.0%, including over 2% of menu mix growth, and approximately flat transactions at (0.1%);
- Total revenue of approximately $133.4 million, representing 6.1% growth from the fiscal fourth quarter of 2014;
- Restaurant sales of approximately $128.1 million, representing 6.0% growth from the fiscal fourth quarter of 2014; and
- Based on updated 2015 guidance, Adjusted EBITDA guidance (a non-GAAP financial measure) for the fiscal fourth quarter 2015 of at least $21.0 million, representing at least 7% growth from the previous year’s fiscal fourth quarter.
The expected sales results are preliminary and unaudited, have not been reviewed by our independent registered public accountants, and remain subject to the completion of normal quarter-end accounting procedures and adjustments and are subject to change. The Company expects to release financial and operating results for its fiscal fourth quarter and fiscal year ended December 29, 2015 during March 2016.
Paul J.B. Murphy, III, President and Chief Executive Officer of Del Taco, commented, “2015 was an incredibly successful year at Del Taco and we are pleased to have delivered preliminary sales results that we believe will rank among the best in our industry. We continue to elevate and solidify our QSR+ positioning through solid execution and product innovation across our tiered menu strategy including items such as our fresh avocados, handcrafted ensaladas, and freshly grilled carne asada steak. This helped drive another quarter of impressive menu mix improvement, contributing over 2% to our check growth. Our fourth quarter performance also marked our ninth and fourteenth consecutive quarters of comparable restaurant sales growth system-wide and for company-owned restaurants, respectively. We thank all of our team members for their dedication and contributions to these outstanding results and look forward to 2016.”
Updated Fiscal 2015 Guidance
Based upon these preliminary unaudited sales results, Del Taco is offering the following updated guidance for fiscal year 2015, a 52 week period ending December 29, 2015.
- System-wide same store sales growth of approximately 6.3%, including 6.4% for company-owned restaurants and 6.2% for franchise restaurants;
- Total revenue of approximately $424.0 million;
- Total company restaurant sales of approximately $407.6 million;
- Restaurant contribution margin of at least 19.7% (representing the high end of the previously guided range);
- G&A expenses between approximately $32.3 and $32.5 million, including non-cash stock-based compensation of approximately $2.1 million;
- Adjusted EBITDA of at least $64.8 million (representing the high end of the previously guided range); and
- Twelve system-wide restaurant openings, including six company-owned restaurants.
Del Taco opened three company-owned and six franchise restaurants during the fiscal fourth quarter, resulting in twelve system-wide openings during fiscal year 2015. One company-owned restaurant previously expected to open last year was delayed due to significant rains in Georgia and opened on January 6, 2016. Additionally, Del Taco closed twelve previously discussed underperforming company-owned restaurants late in the fiscal fourth quarter.
The updated 2015 guidance is based on preliminary sales results, is unaudited, has not been reviewed by our independent registered public accountants, and remains subject to change in connection with the preparation of the audited financial statements for the year ended December 29, 2015.
Initial Fiscal 2016 Guidance
The Company is providing the following initial guidance for fiscal year 2016, a 53-week period ending January 3, 2017.
- System-wide same store sales growth of approximately 2.5% to 4.5%;
- Total revenue between $439 million and $449 million;
- Total company-owned restaurant sales between $422 million and $432 million;
- 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;
- Adjusted EBITDA between $67.5 million and $70.0 million;
- Fifteen to eighteen new system-wide restaurant openings, including the company-owned restaurant that opened in early January 2016; and
- Net capital expenditures totaling approximately $36.0 to $41.0 million including approximately $10.0 to $12.5 million for new unit construction, approximately $10.0 to $11.0 million for capitalized maintenance, approximately $10.0 to $11.5 million for discretionary investment in equipment and technology, and approximately $6.0 million for land acquisition for development after 2016.
The fiscal 2016 guidance is based on preliminary fiscal 2015 sales results and remains subject to change.
ICR Conference Participation
The Del Taco management team will present at the ICR Conference on Tuesday, January 12, 2016 at the Grande Lakes Hotel and Resort in Orlando, Florida. The presentation will begin at 8:30 AM Eastern Time and will be webcast live and later archived. The presentation will be posted to the Del Taco website at investor.deltaco.com under the “News & Events” tab on Tuesday, January 12, 2016 before the presentation begins.
