UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark one)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
For the transition period from to
Commission File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) | (Zip Code) |
(
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N/A
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer | ☐ | ☒ | |
Non-accelerated Filer | ☐ | Smaller Reporting Company | |
Emerging Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
As of July 24, 2020, there were
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
EL POLLO LOCO HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Amounts in thousands, except share data)
| June 24, |
| December 25, | |||
| 2020 |
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Assets |
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Current assets: |
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Cash and cash equivalents | $ | | $ | | ||
Accounts and other receivables, net |
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Inventories |
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Prepaid expenses and other current assets |
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Income tax receivable |
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Total current assets |
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Property and equipment owned, net |
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Property held under operating leases, net ("ROU asset") |
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Goodwill |
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Trademarks |
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Deferred tax assets |
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Other assets |
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Total assets | $ | | $ | | ||
Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Current portion of obligations under finance leases | $ | | $ | | ||
Current portion of obligations under operating leases |
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Accounts payable |
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Accrued salaries and vacation |
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Accrued insurance |
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Accrued income taxes payable |
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Accrued interest |
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Current portion of income tax receivable agreement payable |
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Other accrued expenses and current liabilities |
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Total current liabilities |
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Revolver loan |
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Obligations under finance leases, net of current portion |
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Obligations under operating leases, net of current portion |
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Deferred taxes |
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Income tax receivable agreement payable, net of current portion |
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Other noncurrent liabilities |
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Total liabilities |
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Commitments and contingencies |
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Stockholders’ Equity |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in-capital |
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Accumulated deficit |
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Accumulated other comprehensive (loss) income |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity | $ | | $ | |
See notes to condensed consolidated financial statements (unaudited).
3
EL POLLO LOCO HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Amounts in thousands, except share data)
| Thirteen Weeks Ended |
| Twenty-Six Weeks Ended |
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June 24, 2020 | June 26, 2019 | June 24, 2020 | June 26, 2019 | ||||||||||
Revenue |
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Company-operated restaurant revenue | $ | | $ | | $ | | $ | | |||||
Franchise revenue |
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Franchise advertising fee revenue |
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Total revenue |
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Cost of operations |
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Food and paper cost |
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Labor and related expenses |
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Occupancy and other operating expenses |
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Company restaurant expenses |
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General and administrative expenses |
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Franchise expenses |
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Depreciation and amortization |
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Loss on disposal of assets |
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Recovery of securities lawsuits related legal expenses and other insurance claims |
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Impairment and closed-store reserves |
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Loss on disposition of restaurants |
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Total expenses |
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Income from operations |
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Interest expense, net |
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Income tax receivable agreement expense (income) |
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Income before provision for income taxes |
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Provision for income taxes |
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Net income | $ | | $ | | $ | | $ | | |||||
Net income per share |
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Basic | $ | | $ | | $ | | $ | | |||||
Diluted | $ | | $ | | $ | | $ | | |||||
Weighted-average shares used in computing net income per share |
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Basic |
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Diluted |
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See notes to condensed consolidated financial statements (unaudited).
4
EL POLLO LOCO HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
(Amounts in thousands, except share data)
| Thirteen Weeks Ended |
| Twenty-Six Weeks Ended | |||||||||
June 24, 2020 | June 26, 2019 | June 24, 2020 |
| June 26, 2019 | ||||||||
Net income | $ | | $ | | $ | | $ | | ||||
Other comprehensive loss (income) |
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Changes in derivative instruments |
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Unrealized net losses arising during the period from interest rate swap |
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Reclassifications of losses into net income |
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Income benefit |
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Other comprehensive loss, net of taxes |
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Comprehensive income | $ | | $ | | $ | | $ | |
5
EL POLLO LOCO HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)
(Amounts in thousands, except share data)
Thirteen Weeks Ended June 24, 2020 | |||||||||||||||||
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Common Stock | Paid-in | Accumulated | Comprehensive | Stockholders’ | |||||||||||||
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| Capital |
| Deficit |
| Income (Loss) |
| Equity | ||||||
Balance, March 25, 2020 | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
Stock-based compensation | — |
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Issuance of common stock related to restricted stock | | | ( | — | — | — | |||||||||||
Issuance of common stock upon exercise of stock options | | | | — | — | | |||||||||||
Shares repurchased for employee tax withholdings | ( | — | ( | — | — | ( | |||||||||||
Forfeiture of common stock related to restricted shares | ( |
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Other comprehensive loss, net of tax | — |
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Net income | — |
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Balance, June 24, 2020 | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
Thirteen Weeks Ended June 26, 2019 | |||||||||||||||||
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Common Stock | Paid-in | Accumulated | Comprehensive | Stockholders’ | |||||||||||||
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| Deficit |
| Income |
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Balance, March 27, 2019 | | $ | | $ | | $ | ( | $ | — | | |||||||
Stock-based compensation | — |
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Issuance of common stock related to restricted shares | |
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Issuance of common stock upon exercise of stock options | |
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Shares repurchased for employee tax withholdings | ( |
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Repurchase of common stock | ( |
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Net income | — |
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Balance, June 26, 2019 | | $ | | $ | | $ | ( | $ | — | $ | |
6
Twenty-Six Weeks Ended June 24, 2020 | |||||||||||||||||
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Common Stock | Paid-in | Accumulated | Comprehensive | Stockholders’ | |||||||||||||
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Balance, December 25, 2019 | | $ | | $ | | $ | ( | $ | | $ | | ||||||
Stock-based compensation | — |
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Issuance of common stock related to restricted stock | | | ( | — | — | — | |||||||||||
Issuance of common stock upon exercise of stock options | | | | — | — | | |||||||||||
Shares repurchased for employee tax withholdings | ( | — | ( | — | — | ( | |||||||||||
Forfeiture of common stock related to restricted shares | ( |
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Other comprehensive loss, net of tax | — |
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Net income | — |
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Balance, June 24, 2020 | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
Twenty-Six Weeks Ended June 26, 2019 | |||||||||||||||||
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Common Stock | Paid-in | Accumulated | Comprehensive | Stockholders’ | |||||||||||||
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Balance, December 26, 2018 | | $ | | $ | | $ | ( | $ | — | | |||||||
Stock-based compensation | — |
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Issuance of common stock related to restricted shares | |
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Issuance of common stock upon exercise of stock options | |
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Shares repurchased for employee tax withholdings | ( |
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Repurchase of common stock | ( |
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Net income | — |
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Balance, June 26, 2019 | | $ | | $ | | $ | ( | $ | — | $ | |
7
EL POLLO LOCO HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Amounts in thousands)
| Twenty-Six Weeks Ended |
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| June 24, 2020 | June 26, 2019 |
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Cash flows from operating activities: |
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Net income | $ | | $ | | |||
Adjustments to reconcile net income to net cash flows provided by operating activities: |
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Depreciation and amortization |
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Stock-based compensation expense |
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Income tax receivable agreement expense |
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Loss on disposition of restaurants |
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Loss on disposal of assets |
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Impairment of property and equipment |
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Amortization of deferred financing costs |
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Amortization of favorable and unfavorable leases, net |
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Deferred income taxes, net |
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Changes in operating assets and liabilities: |
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Accounts and other receivables, net |
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Inventories |
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Prepaid expenses and other current assets |
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Other assets |
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Accounts payable |
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Accrued salaries and vacation |
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Accrued insurance |
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Income taxes payable |
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Other accrued expenses and liabilities |
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Net cash flows provided by operating activities |
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Cash flows from investing activities: |
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Proceeds from disposition of restaurants |
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Purchase of property and equipment |
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Net cash flows used in investing activities |
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Cash flows from financing activities: |
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Minimum tax withholdings related to net share settlements |
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Payments on revolver and swingline loan |
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Borrowings on revolver and swingline loan | | | |||||
Proceeds from issuance of common stock upon exercise of stock options, net of expenses |
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Payment of obligations under finance leases |
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Stock buybacks | — | ( | |||||
Net cash flows provided by (used in) financing activities |
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Increase in cash and cash equivalents |
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Cash and cash equivalents, beginning of period |
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Cash and cash equivalents, end of period | $ | | $ | |
| Twenty-Six Weeks Ended |
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June 24, 2020 | June 26, 2019 | ||||||
Supplemental cash flow information |
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Cash paid during the period for interest | $ | | $ | | |||
Cash paid during the period for income taxes | $ | | $ | | |||
Unpaid purchases of property and equipment | $ | | $ | | |||
Unpaid stock buybacks | $ | — | $ | |
See notes to the condensed consolidated financial statements (unaudited).
8
EL POLLO LOCO HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Overview
El Pollo Loco Holdings, Inc. (“Holdings”) is a Delaware corporation headquartered in Costa Mesa, California. Holdings and its direct and indirect subsidiaries are collectively referred to herein as “we,” “us” or the “Company.” The Company’s activities are conducted principally through its indirect wholly-owned subsidiary, El Pollo Loco, Inc. (“EPL”), which develops, franchises, licenses, and operates quick-service restaurants under the name El Pollo Loco® and operates under
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments necessary for a fair presentation of the Company’s consolidated financial position and results of operations and cash flows for the periods presented. Interim results of operations are not necessarily indicative of the results that may be achieved for the full year. The condensed consolidated financial statements and related notes do not include all information and footnotes required by GAAP for annual reports. This quarterly report should be read in conjunction with the consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 25, 2019.
The Company uses a 52- or 53-week fiscal year ending on the last Wednesday of the calendar year. In a 52-week fiscal year, each quarter includes 13 weeks of operations; in a 53-week fiscal year, the first, second and third quarters each include 13 weeks of operations, and the fourth quarter includes 14 weeks of operations. Every six or seven years, a 53-week fiscal year occurs. Fiscal 2020 is a 53-week year ending on December 30, 2020, and fiscal 2019 was a 52-week year ending on December 25, 2019. Revenues, expenses, and other financial and operational figures may be elevated in a 53-week year.
Holdings has no material assets or operations. Holdings and Holdings’ direct subsidiary, EPL Intermediate, Inc. (“Intermediate”), guarantee EPL’s 2018 Revolver (as defined below) on a full and unconditional basis (see Note 4), and Intermediate has no subsidiaries other than EPL. EPL is a separate and distinct legal entity and has no obligation to make funds available to Intermediate. EPL and Intermediate may pay dividends to Intermediate and to Holdings, respectively, subject to the terms of the 2018 Revolver.
Principles of Consolidation
The accompanying condensed consolidated financial statements include the accounts of Holdings and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and revenue and expenses during the periods reported. Actual results could materially differ from those estimates. The Company’s significant estimates include estimates for impairment of goodwill, intangible assets and property and equipment, insurance reserves, lease accounting matters, stock-based compensation, income tax receivable agreement liability, contingent liabilities and income tax valuation allowances.
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COVID-19
On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China ("COVID-19") and the risks to the international community as the virus spreads globally beyond its point of origin. On March 11, 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally.
The COVID-19 pandemic has significantly disrupted consumer demand, as well as the Company’s restaurant operations. Following the pandemic declaration in March 2020, federal, state and local governments began to respond to the public health crisis by requiring social distancing, "stay at home" directives, and restaurant restrictions - including government-mandated dining room closures - that limited business to off-premise services only (take-out, drive-thru and delivery). Historically, approximately
The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. Management has taken precautionary actions, such as drawing on its 2018 Revolver (see Note 4), temporarily suspending all but essential capital spending and share repurchase activity, reevaluating essential support center general and administrative expenses and fine-tuning its restaurant labor model based on indoor dining room restrictions, limited dining room capacity in restaurants located in geographies where indoor dining is permitted, dining room closures and fluctuating sales volumes. Additionally, Management has delayed making April, May and June rent payments on the majority of its leased properties and has reached agreements for rent abatement and/or deferment with the Company’s landlords for those properties. See Note 5 “Other Accrued Expenses and Current Liabilities” and Note 6 “Other Noncurrent Liabilities” for details of these balances. For the Company’s franchisees, the Company deferred
Due to the rapid development and fluidity of this situation, the Company cannot determine the ultimate impact that the COVID-19 pandemic will have on the Company’s consolidated financial condition, liquidity, and future results of operations, and therefore any prediction as to the ultimate materiality of the adverse impact on the Company’s consolidated financial condition, liquidity, and future results of operations is uncertain.
Subsequent Events
Subsequent to June 24, 2020, the Company has temporarily closed
Subsequent to June 24, 2020, the Surety, from whom the Company procured an appeal bond to secure the judgement against the Company in the matter of Janice P. Handlers-Bryman and Michael D. Bryman v. El Pollo Loco, Inc., released its collateral demand, freeing the $
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subsequent to June 24, 2020, the Company reached an agreement in principle with the plaintiffs to resolve the lawsuit. See Note 7, “Commitments and Contingencies, Legal Matters” for more details.
The Company has evaluated subsequent events that have occurred after June 24, 2020, and determined that there were no other events or transactions occurring during this reporting period that require recognition or disclosure in the condensed consolidated financial statements.
Cash and Cash Equivalents
The Company considers all highly-liquid instruments with an original maturity of three months or less at the date of purchase to be cash equivalents.
Liquidity
The Company’s principal liquidity and capital requirements are new restaurants, existing restaurant capital investments (remodels and maintenance), interest payments on our debt, lease obligations and working capital and general corporate needs. At June 24, 2020, the Company’s total debt was $
Recovery of Securities Class Action Legal Expenses and Other Insurance Claims
During the thirteen and twenty-six weeks ended June 24, 2020, the Company received insurance proceeds of $
Loss on Disposition of Restaurants
During the thirteen and twenty-six weeks ended June 26, 2019, the Company completed the sale of
These sales resulted in cash proceeds of $
Recently Adopted Accounting Pronouncements
In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting," which provides optional guidance, for a limited time, to ease the potential burden in accounting for or
11
recognizing the effects of reference rate reform on financial reporting. ASU 2020-04 is effective for a limited time, from March 12, 2020, through December 31, 2022. The Company adopted this ASU on March 12, 2020. The adoption of ASU 2020-04 did not have a significant impact on the Company’s consolidated financial position or results of operations.
In February 2018, the FASB issued ASU No. 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement," which finalizes proposed ASU No. 2015-350, and of the same name as part of its disclosure framework project, which focuses on improving the effectiveness of disclosures in the notes to financial statements by facilitating clear communication of the information required by U.S. GAAP that is most important to users of each entity’s financial statements. The Company adopted ASU No. 2018-13 during the first quarter of 2020. The adoption of ASU 2018-13 did not have a significant impact on the Company’s consolidated financial position or results of operations.
In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," which finalizes proposed ASU No. 2012-260 "Financial Instruments—Credit Losses (Subtopic 825-15)" and adds Topic 326 "Financial Instruments—Credit Losses", to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date by replacing the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company adopted ASU No. 2016-13 during the first quarter of 2020. The adoption of ASU 2016-03 did not have a significant impact on the Company’s consolidated financial position or results of operations.
Recent Accounting Pronouncements Not Yet Adopted
In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes", which modifies Topic 740 to simplify the accounting for income taxes. ASU 2019-12 is effective for financial statements issued for annual periods beginning after December 15, 2020, and for the interim periods therein. The adoption of ASU 2019-12 is not expected to have a significant impact on the Company’s consolidated financial position or results of operations.
Concentration of Risk
Cash and cash equivalents are maintained at financial institutions and, at times, these balances may exceed federally-insured limits. The Company has never experienced any losses related to these balances.
The Company had
Company-operated and franchised restaurants in the greater Los Angeles area generated, in the aggregate, approximately
Goodwill and Indefinite Lived Intangible Assets
The Company’s indefinite-lived intangible assets consist of trademarks. Goodwill represents the excess of cost over fair value of net identified assets acquired in business combinations accounted for under the purchase method. The Company does not amortize its goodwill and indefinite-lived intangible assets. Goodwill resulted from the acquisition of certain franchise locations.
Upon the sale or closure of a restaurant, the Company evaluates whether there is a decrement of goodwill. The amount of goodwill included in the cost basis of the asset sold is determined based on the relative fair value of the portion of the reporting unit disposed of compared to the fair value of the reporting unit retained. The Company determined there was no decrement of goodwill related to the disposition of restaurants during the thirteen and twenty-six weeks ended June 26, 2019.
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The Company performs an annual impairment test for goodwill during the fourth fiscal quarter of each year, or more frequently if impairment indicators arise.
The Company reviews goodwill for impairment utilizing either a qualitative assessment or a fair value test by comparing the fair value of a reporting unit with its carrying amount. If the Company decides that it is appropriate to perform a qualitative assessment and concludes that the fair value of a reporting unit more likely than not exceeds its carrying value, no further evaluation is necessary. If the Company performs the fair value test, the Company will compare the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered
impaired. If the carrying amount of a reporting unit exceeds its fair value, the Company will recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit.The Company performs an annual impairment test for indefinite-lived intangible assets during the fourth fiscal quarter of each year, or more frequently if impairment indicators arise. An impairment test consists of either a qualitative assessment or a comparison of the fair value of an intangible asset with its carrying amount. The excess of the carrying amount of an intangible asset over its fair value is recognized as an impairment loss.
The assumptions used in the estimate of fair value are generally consistent with the past performance of the Company’s reporting segment and are also consistent with the projections and assumptions that are used in current operating plans. These assumptions are subject to change as a result of changing economic and competitive conditions.
Due to the recent impact of the COVID-19 pandemic to the global economy, including but not limited to, the volatility of the Company’s stock price as well as that of its competitors and the challenging environment for the restaurant industry generally, the Company determined that there were indicators of potential impairment of its goodwill and indefinite-lived intangible assets during the thirteen and twenty-six weeks ended June 24, 2020. As such, the Company performed an impairment assessment for both goodwill and indefinite-lived intangible assets and concluded that the fair value of these assets substantially exceeded their carrying values. Accordingly, the Company did not record any impairment to its goodwill or indefinite-lived intangible assets during the thirteen and twenty-six weeks ended June 24, 2020. The ultimate severity and longevity of the COVID-19 pandemic is unknown, and therefore, it is possible that impairments could be identified in future periods, and such amounts could be material.
Fair Value Measurements
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories:
● | Level 1: Quoted prices for identical instruments in active markets. |
● | Level 2: Observable prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs or significant value drivers are observable. |
● | Level 3: Unobservable inputs used when little or no market data is available. |
During fiscal 2019, the Company entered into an interest rate swap, which is required to be measured at fair value on a recurring basis. The fair value was determined based on Level 2 inputs, which include valuation models, as reported by the Company’s counterparty. These valuation models use a discounted cash flow analysis on the cash flows of the derivative based on the terms of the contract and the forward yield curves adjusted for the Company’s credit risk. The key inputs for the valuation models are observable market prices, discount rates, and forward yield curves. See "Note 4.
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Long-Term Debt" for further discussion regarding our interest rate swaps.
Fair Value Measurements Using | ||||||||||||
| Fair Value |
| Level 1 |
| Level 2 |
| Level 3 | |||||
Other non-current liabilities - Interest rate swap | $ | | $ | | $ | | $ | |
The following table presents fair value for the interest rate swap at December 25, 2019 (in thousands):
Fair Value Measurements Using | ||||||||||||
| Fair Value |
| Level 1 |
| Level 2 |
| Level 3 | |||||
Other assets - Interest rate swap | $ | | $ | | $ | | $ | |
Certain assets and liabilities are measured at fair value on a nonrecurring basis. In other words, the instruments are not measured at fair value on an ongoing basis, but are subject to fair value adjustments only in certain circumstances (e.g. when there is evidence of impairment).
The following non-financial instruments were measured at fair value, on a nonrecurring basis, as of and for the thirteen and twenty-six weeks ended June 24, 2020 (in thousands):
Thirteen Weeks | Twenty-Six Weeks | |||||||||||||||||
Fair Value Measurements at June 24, 2020 Using | Ended June 24, 2020 | Ended June 24, 2020 | ||||||||||||||||
| Total |
| Level 1 |
| Level 2 |
| Level 3 | Impairment Losses | Impairment Losses | |||||||||
Certain property and equipment owned, net | $ | — | $ | | $ | | $ | — |
| $ | | $ | | |||||
Certain ROU assets, net | $ | | $ | | $ | | $ | | $ | — | $ | |
The following non-financial instruments were measured at fair value on a nonrecurring basis as of and for the thirteen and twenty-six weeks ended June 26, 2019 (in thousands):