UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 2, 2019 (August 1, 2019)
EL POLLO LOCO HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware | 001-36556 | 20-3563182 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
3535 Harbor Blvd., Suite 100, Costa Mesa, California | 92626 | |
(Address of principal executive offices) | (Zip Code) | |
Registrant’s telephone number, including area code: (714) 599-5000
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-2 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b- 2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter). 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. ☒
Item 2.02 Results of Operations and Financial Condition.
On August 1, 2019, El Pollo Loco Holdings, Inc., issued a press release announcing certain financial results for its second quarter ended June 26, 2019, and that management would discuss those results on a conference call that day at 4:30 PM Eastern Time. The press release is attached hereto as Exhibit 99.1.
The information herein, including exhibit, is being furnished and not filed, including for purposes of section 18 of the Securities Exchange Act of 1934. Nor shall it be otherwise subject to liability under that section. Nor shall it be incorporated by reference into any filing under the Securities Act of 1933, or the Securities Exchange Act of 1934, except expressly.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number | Description | |
99.1 | ||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
El Pollo Loco Holdings, Inc. |
(Registrant) |
Date: August 1, 2019
/s/ Laurance Roberts |
Laurance Roberts |
Chief Financial Officer |
Exhibit 99.1
El Pollo Loco Holdings, Inc. Announces
Second Quarter 2019 Financial Results
COSTA MESA, CA – August 1, 2019 – El Pollo Loco Holdings, Inc. (Nasdaq: LOCO) today announced financial results for the 13-week period ended June 26, 2019.
Highlights for the second quarter ended June 26, 2019, compared to the second quarter ended June 27, 2018 were as follows:
• | Total revenue increased 1.9% to $113.7 million compared to $111.6 million in the same period of 2018. |
• | System-wide comparable restaurant sales increased 0.7%, including a 0.4% increase for company-operated restaurants, and a 0.9% increase for franchised restaurants. |
• | Net income was $14.1 million, or $0.37 per diluted share, an increase compared to net income of $5.1 million, or $0.13 per diluted share. During the second quarter of 2019 the Company received insurance proceeds of $10.0 million related to the settlement of a previously disclosed securities class action lawsuit and recorded a loss on sale of restaurants of $0.9 million. During the second quarter of 2018 the Company recorded a $4.0 million pre-tax expense, related to the impairment of one restaurant in Arizona and the closure of two restaurants in Texas and received insurance proceeds of $2.4 million related to the reimbursement of certain legal expenses paid in prior years for the defense of securities lawsuits. |
• | Pro forma net income(1) was $8.7 million, or $0.23 per diluted share, compared to $8.6 million, or $0.22 per diluted share in the same period of 2018. |
• | Adjusted EBITDA(1) was $17.9 million, compared to $17.5 million. |
(1) Pro forma net income and adjusted EBITDA are non-GAAP measures defined below under "Key Financial Definitions." A reconciliation of GAAP net income to pro forma net income and adjusted EBITDA is included in the accompanying financial data. See also “Non-GAAP Financial Measures.”
Bernard Acoca, President and Chief Executive Officer of El Pollo Loco Holdings, Inc., stated, "We reported solid earnings of $0.23 per share for the second quarter, highlighted by our restaurant contribution margin of 19.9% and a tribute to the work of our talented teams in a challenging cost environment. While our system-wide comparable restaurant sales increase of 0.7% was below our expectations, the increase represents our fourth straight quarter of positive system-wide same store sales growth since the launch of our Transformation Agenda.”
Acoca added, “We continue to make progress on a number of initiatives within our Transformation Agenda, including the digitization of how we go to market; streamlining our operations; refining our off-premise efforts; and reinforcing the bonds we have with our communities. We’re confident these ongoing efforts will strengthen the foundation of our business, allowing us to grow profitably and responsibly over the long term.”
Second Quarter 2019 Financial Results
Company-operated restaurant revenue in the second quarter of 2019 was $100.1 million, compared to $99.6 million in the same period last year. The growth in company-operated restaurant revenue was largely driven by a 0.4% increase in company-operated comparable sales and the six new restaurants opened during and subsequent to the second quarter of 2018, partially offset by the closure of seven restaurants and the sale of eleven company-operated locations to existing franchisees during or subsequent to the second quarter of 2018.
Comparable company-operated restaurant sales in the second quarter increased 0.4%, driven by a 3.1% increase in average check, partially offset by a 2.7% decrease in transactions.
Franchise revenue in the second quarter of 2019 increased 20.8% to $7.9 million, compared to $6.6 million in the second quarter of 2018. This increase was due to higher fees received from franchised restaurants related to their use of the Company's point-of-sales system, a comparable franchise restaurant sales increase of 0.9%, the opening of eight new franchised restaurants during or after the prior year quarter and the sale of eleven company operated restaurants to franchisees during the same period. This was partially offset by the closure of three franchise restaurants.
Franchise advertising fee revenue in the second quarter of 2019 increased 4.2% to $5.7 million, compared to $5.5 million in the second quarter of 2018, due to an increase in the number of franchise locations and increased franchise comparable restaurant sales.
Restaurant contribution was $19.9 million or 19.9% of company-operated restaurant revenue, compared to $20.2 million, or 20.3% of company-operated restaurant revenue in the second quarter of 2018. The decrease was largely due to higher labor and related expenses as a result of the impact of wage increases in California. The decrease was partially offset by higher company-operated restaurant revenue due to price increases and a decrease in food costs due to a favorable sales mix, partially offset by higher commodity inflation.
During the second quarter of 2019, the Company completed the sale of four company-operated restaurants within the San Francisco, CA area to an existing franchisee and seven company-operated restaurants in the Phoenix, AZ area to another existing franchisee. This resulted in a net loss on sale of restaurants of $0.9 million for the quarter, and a total net loss on sale of restaurants of $5.1 million, including the $4.2 million loss on held for sale assets recognized in the first quarter. Additionally, the Company received insurance proceeds of $10.0 million related to the settlement of a previously disclosed securities class action lawsuit
The second quarter of 2018 included a $4.0 million pre-tax expense, related to the impairment of one restaurant in Arizona and closure of two restaurants in Texas. Additionally, the Company received insurance proceeds of $2.4 million related to the reimbursement of certain legal expenses paid in prior years for the defense of securities lawsuits.
Net income for the second quarter of 2019 was $14.1 million, or $0.37 per diluted share, compared to net income of $5.1 million, or $0.13 per diluted share in the second quarter of 2018. Pro forma net income was $8.7 million, or $0.23 per diluted share during the second quarter of 2019, compared to $8.6 million, or $0.22 per diluted share during the second quarter of 2018. A reconciliation between GAAP net income and pro forma net income is included in the accompanying financial data.
2019 Outlook
Based on current information, the Company is updating its earnings guidance for fiscal year 2019.
Excluding the impact of potential share repurchases, the Company expects 2019 pro forma diluted net income per share ranging from $0.69 to $0.72. This compares to pro forma diluted net income per share of $0.74 in 2018. Pro forma net income guidance for fiscal year 2019 is based, in part, on the following annual assumptions:
• | System-wide comparable restaurant sales growth of approximately 1.0% to 2.0%; |
• | The opening of 2-3 new company-owned restaurants and 2-3 new franchised restaurants; |
• | Restaurant contribution margin of 18.2% to 18.7%; |
• | G&A expenses of between 8.2% and 8.4% of total revenue excluding legal fees related to securities related litigation; |
• | Pro forma income tax rate of 26.5%; and |
• | Adjusted EBITDA of between $61.0 and $64.0 million. |
Reconciliations of our 2019 expected pro forma diluted net income per share range and our expected 2019 Adjusted EBITDA range to their corresponding GAAP measures have not been provided as we cannot determine the probable significance or timing of certain reconciling items which are outside of our control and therefore cannot be reasonably predicted. Accordingly, we do not provide guidance for these various reconciling items. These reconciling items such as asset impairment and closed store reserves, securities lawsuit related legal expenses and gain or loss on disposal of assets impact the timing and amount of the quarterly recognition of GAAP net income. Therefore, reconciliations of the differences between these forward-looking information items to their most directly comparable financial measures calculated and presented in accordance with GAAP are not available without unreasonable effort.
Key Financial Definitions
Comparable restaurant sales reflect the change in year-over-year sales for the comparable company, franchised and total system restaurant base. The comparable restaurant base is defined to include those restaurants open for 15 months or longer. At June 26, 2019, there were 199 restaurants in our comparable company-operated restaurant base and 459 restaurants in our comparable system restaurant base.
Restaurant contribution and restaurant contribution margin are neither required by, nor presented in accordance with, accounting principles generally accepted in the United States of America ("GAAP"). Restaurant contribution is defined as company-operated restaurant revenue less company restaurant expenses, which are food and paper costs, labor and related expenses and occupancy and other operating expenses. Restaurant contribution excludes certain costs, such as general and administrative expenses, depreciation and amortization, asset impairment and closed-store reserves, loss on sale of restaurants, recovery of securities lawsuits related legal expenses and other costs that are considered normal operating costs and accordingly, restaurant contribution is not indicative of overall Company results and does not accrue directly to the benefit of shareholders because of the exclusion of certain corporate-level expenses. Restaurant contribution margin is defined as restaurant contribution as a percentage of net company-operated restaurant revenue. See also “Non-GAAP Financial Measures.”
EBITDA and adjusted EBITDA are neither required by, nor presented in accordance with, GAAP. EBITDA represents net income before interest expense, provision for income taxes, depreciation, and amortization, and adjusted EBITDA represents EBITDA before items that we do not consider representative of our ongoing operating performance, as identified in the GAAP reconciliation in the accompanying financial data. See also “Non-GAAP Financial Measures.”
Pro forma net income is neither required by, nor presented in accordance with, GAAP. Pro forma net income represents net income adjusted for (i) costs (or gains) related to loss (or gains) on disposal of assets or assets held for sale and asset impairment and closed store costs, (ii) amortization expense and other estimate adjustments (whether expense or income) incurred on the Tax Receivable Agreement (“TRA”) completed at the time of our IPO, (iii) legal costs associated with securities class action litigation, (iv) legal settlement costs, (v) insurance proceeds received related to securities class action legal expenses, (vi) costs associated with the transition of our CEO and (vii) provision for income taxes at a normalized tax rate of 26.5% for the thirteen and twenty-six weeks ended June 26, 2019 and June 27, 2018, which reflects our estimated long-term effective tax rate, including both federal and state income taxes. See the GAAP reconciliation in the accompanying financial data and “Non-GAAP Financial Measures.”
Conference Call
The Company will host a conference call to discuss financial results for the second quarter of 2019 today at 4:30 PM Eastern Time. Bernard Acoca, President and Chief Executive Officer and Larry Roberts, Chief Financial Officer will host the call.
The conference call can be accessed live over the phone by dialing 877-407-3982 or for international callers by dialing 201-493-6780. A replay will be available after the call and can be accessed by dialing 844-512-2921 or for international callers by dialing 412-317-6671; the passcode is 13692472. The replay will be available until Thursday, August 15, 2019. The conference call will also be webcast live from the Company’s corporate website at investor.elpolloloco.com under the “Events & Presentations” page. An archive of the webcast will be available at the same location on the corporate website shortly after the call has concluded.
About El Pollo Loco
El Pollo Loco (Nasdaq:LOCO) is the nation’s leading fire-grilled chicken restaurant chain renowned for its masterfully citrus-marinated, fire-grilled chicken and handcrafted entrees using fresh ingredients inspired by Mexican recipes. With more than 480 company-owned and franchised restaurants in Arizona, California, Nevada, Texas, Utah, and Louisiana. El Pollo Loco is expanding its presence in key markets through a combination of company and existing and new franchisee development. Visit us on our website at ElPolloLoco.com.
Forward-Looking Statements
This press release contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact included in this press release are forward-looking statements. Forward-looking statements discuss our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements because they do not relate strictly to historical or current facts. These statements may include words such as “aim,” “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “outlook,” “potential,” “project,” “projection,” “plan,” “intend,” “seek,” “may,” “could,” “would,” “will,” “should,” “can,” “can have,” “likely,” the negatives thereof and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. They appear in a number of places throughout this press release and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which we operate. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those that we expected.
While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. All forward-looking statements are expressly qualified in their entirety by these cautionary statements. You should evaluate all forward-looking statements made in this press release in the context of the risks and uncertainties disclosed in our annual report on Form 10-K for the year ended December 26, 2018, file number 001-36556, including the sections thereof captioned “Forward-Looking Statements” and “Risk Factors,” as those sections may be updated in our quarterly reports on Form 10-Q. Those and other filings are available online at www.sec.gov, at www.elpolloloco.com or upon request from El Pollo Loco.
We caution you that the important factors referenced above may not contain all of the factors that are important to you. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences we anticipate or affect us or our operations in the ways that we expect. The forward-looking statements included in this press release are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as required by law. If we do update one or more forward-looking statements, no inference should be made that we will make additional updates with respect to those or other forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements.
Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use non-GAAP financial measures which include supplemental measures of operating performance of our restaurants. Our calculations of supplemental measures and other non-GAAP financial measures indicated above may not be comparable to those reported by other companies. These measures have limitations as analytical tools, and are not intended to be considered in isolation or as substitutes for, or superior to, financial measures prepared and presented in accordance with GAAP. We use non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons and to evaluate our restaurants' financial performance against our competitors' performance. We believe that they provide useful information about operating results, enhance understanding of past performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making. These non-GAAP financial measures may also assist investors in evaluating our business and performance relative to industry peers and provide greater transparency with respect to the Company's financial condition and results of operation.
Investor Contact:
Fitzhugh Taylor, ICR
fitzhugh.taylor@icrinc.com
714-599-5200
Media Contact:
Hanna Gray, Edible
hannah.gray@edible-inc.com
323-202-1477
EL POLLO LOCO HOLDINGS, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share data)
Thirteen Weeks Ended | Twenty-Six Weeks Ended | ||||||||||||||||||||||
June 26, 2019 | June 27, 2018 | June 26, 2019 | June 27, 2018 | ||||||||||||||||||||
$ | % | $ | % | $ | % | $ | % | ||||||||||||||||
Revenue: | |||||||||||||||||||||||
Company-operated restaurant revenue | 100,139 | 88.0 | 99,627 | 89.2 | 197,289 | 88.6 | 194,180 | 89.3 | |||||||||||||||
Franchise revenue | 7,918 | 7.0 | 6,553 | 5.9 | 14,362 | 6.4 | 12,659 | 5.8 | |||||||||||||||
Franchise advertising fee revenue | 5,683 | 5.0 | 5,453 | 4.9 | 11,066 | 5.0 | 10,550 | 4.9 | |||||||||||||||
Total revenue | 113,740 | 100.0 | 111,633 | 100.0 | 222,717 | 100.0 | 217,389 | 100.0 | |||||||||||||||
Costs of operations: | |||||||||||||||||||||||
Food and paper cost (1) | 27,886 | 27.8 | 28,681 | 28.8 | 55,038 | 27.9 | 55,916 | 28.8 | |||||||||||||||
Labor and related expenses (1) | 29,272 | 29.2 | 27,856 | 28.0 | 58,848 | 29.8 | 55,518 | 28.6 | |||||||||||||||
Occupancy and other operating expenses (1) | 23,032 | 23.0 | 22,913 | 23.0 | 46,259 | 23.4 | 44,832 | 23.1 | |||||||||||||||
Company restaurant expenses (1) | 80,190 | 80.1 | 79,450 | 79.7 | 160,145 | 81.2 | 156,266 | 80.5 | |||||||||||||||
General and administrative expenses | 9,348 | 8.2 | 12,474 | 11.2 | 20,696 | 9.3 | 25,676 | 11.8 | |||||||||||||||
Franchise expenses | 7,542 | 6.6 | 6,250 | 5.6 | 13,686 | 6.1 | 12,082 | 5.6 | |||||||||||||||
Depreciation and amortization | 4,454 | 3.9 | 4,344 | 3.9 | 9,215 | 4.1 | 8,556 | 3.9 | |||||||||||||||
Loss (gain) on disposal of assets | 134 | 0.1 | (8 | ) | — | 178 | 0.1 | 53 | — | ||||||||||||||
Recovery of securities lawsuits related legal expenses | (10,000 | ) | (8.8 | ) | (2,429 | ) | (2.2 | ) | (10,000 | ) | (4.5 | ) | (4,063 | ) | (1.9 | ) | |||||||
Asset impairment and closed-store reserves | 565 | 0.5 | 3,963 | 3.6 | 874 | 0.4 | 6,782 | 3.1 | |||||||||||||||
Loss on disposition of restaurants | 927 | 0.8 | — | — | 5,051 | 2.3 | — | — | |||||||||||||||
Total expenses | 93,160 | 81.9 | 104,044 | 93.2 | 199,845 | 89.7 | 205,352 | 94.5 | |||||||||||||||
Income from operations | 20,580 | 18.1 | 7,589 | 6.8 | 22,872 | 10.3 | 12,037 | 5.5 | |||||||||||||||
Interest expense, net of interest income | 922 | 0.8 | 960 | 0.9 | 1,781 | 0.8 | 1,848 | 0.9 | |||||||||||||||
Income tax receivable agreement (income) expense | (94 | ) | (0.1 | ) | 712 | 0.6 | 77 | 0.0 | (206 | ) | (0.1 | ) | |||||||||||
Income before provision for income taxes | 19,752 | 17.4 | 5,917 | 5.3 | 21,014 | 9.4 | 10,395 | 4.8 | |||||||||||||||
Provision for income taxes | 5,665 | 5.0 | 865 | 0.8 | 6,014 | 2.7 | 2,814 | 1.3 | |||||||||||||||
Net income | 14,087 | 12.4 | 5,052 | 4.5 | 15,000 | 6.7 | 7,581 | 3.5 | |||||||||||||||
Net income per share: | |||||||||||||||||||||||
Basic | 0.37 | 0.13 | 0.39 | 0.20 | |||||||||||||||||||
Diluted | 0.37 | 0.13 | 0.38 | 0.19 | |||||||||||||||||||
Weighted average shares used in computing net income per share: | |||||||||||||||||||||||
Basic | 37,939,912 | 38,482,074 | 38,296,807 | 38,473,641 | |||||||||||||||||||
Diluted | 38,580,722 | 39,043,434 | 39,043,477 | 39,015,259 | |||||||||||||||||||
(1) | As a percentage of restaurant revenue. |
EL POLLO LOCO HOLDINGS, INC.
UNAUDITED SELECTED BALANCE SHEETS AND SELECTED OPERATING DATA
(dollar amounts in thousands)
As of | |||||||
June 26, 2019 | December 26, 2018 | ||||||
Selected Balance Sheet Data: | |||||||
Cash and cash equivalents | $ | 11,281 | $ | 6,969 | |||
Total assets | 636,993 | 450,226 | |||||
Total debt | 85,000 | 74,184 | |||||
Total liabilities | 374,169 | 184,990 | |||||
Total stockholders’ equity | 262,824 | 265,236 | |||||
Twenty-Six Weeks Ended | |||||||
June 26, 2019 | June 27, 2018 | ||||||
Selected Operating Data: | |||||||
Company-operated restaurants at end of period | 200 | 211 | |||||
Franchised restaurants at end of period | 284 | 269 | |||||
Company-operated: | |||||||
Comparable restaurant sales growth | 1.0 | % | (1.8 | )% | |||
Restaurants in the comparable base | 199 | 194 | |||||
EL POLLO LOCO HOLDINGS, INC.
UNAUDITED RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA
(dollar amounts in thousands)
Thirteen Weeks Ended | Twenty-Six Weeks Ended | ||||||||||||||
June 26, 2019 | June 27, 2018 | June 26, 2019 | June 27, 2018 | ||||||||||||
Adjusted EBITDA: | |||||||||||||||
Net income, as reported | $ | 14,087 | $ | 5,052 | $ | 15,000 | $ | 7,581 | |||||||
Provision for income taxes | 5,665 | 865 | 6,014 | 2,814 | |||||||||||
Interest expense, net | 922 | 960 | 1,781 | 1,848 | |||||||||||
Depreciation and amortization | 4,454 | 4,344 | 9,215 | 8,556 | |||||||||||
EBITDA | 25,128 | 11,221 | 32,010 | 20,799 | |||||||||||
Stock-based compensation expense | 641 | 298 | 1,129 | 443 | |||||||||||
Loss (gain) on disposal of assets | 134 | (8 | ) | 178 | 53 | ||||||||||
Recovery of securities lawsuits related legal expenses | (10,000 | ) | (2,429 | ) | (10,000 | ) | (4,063 | ) | |||||||
Asset impairment and closed-store reserves | 565 | 3,963 | 874 | 6,782 | |||||||||||
Pre-opening costs | 35 | 211 | 35 | 423 | |||||||||||
Loss on disposition of restaurants | 927 | — | 5,051 | — | |||||||||||
Income tax receivable agreement (income) expense | (94 | ) | 712 | 77 | (206 | ) | |||||||||
Securities lawsuits related legal expense | 491 | 3,169 | 2,630 | 6,873 | |||||||||||
Executive transition costs | 63 | 373 | 100 | 1,019 | |||||||||||
Adjusted EBITDA | $ | 17,890 | $ | 17,510 | $ | 32,084 | $ | 32,123 | |||||||
EL POLLO LOCO HOLDINGS, INC.
UNAUDITED RECONCILIATION OF NET INCOME (LOSS) TO PRO FORMA NET INCOME
(dollar amounts in thousands, except share data)
Thirteen Weeks Ended | Twenty-Six Weeks Ended | ||||||||||||||
June 26, 2019 | June 27, 2018 | June 26, 2019 | June 27, 2018 | ||||||||||||
Pro forma net income: | |||||||||||||||
Net income, as reported | $ | 14,087 | $ | 5,052 | $ | 15,000 | $ | 7,581 | |||||||
Provision for taxes, as reported | 5,665 | 865 | 6,014 | 2,814 | |||||||||||
Loss on disposition of restaurants | 927 | — | 5,051 | — | |||||||||||
Income tax receivable agreement (income) expense | (94 | ) | 712 | 77 | (206 | ) | |||||||||
Loss (gain) on disposal of assets | 134 | (8 | ) | 178 | 53 | ||||||||||
Recovery of securities lawsuits related legal expenses | (10,000 | ) | (2,429 | ) | (10,000 | ) | (4,063 | ) | |||||||
Asset impairment and closed-store reserves | 565 | 3,963 | 874 | 6,782 | |||||||||||
Securities lawsuits related legal expenses | 491 | 3,169 | 2,630 | 6,873 | |||||||||||
Executive transition costs | 63 | 373 | 100 | 1,019 | |||||||||||
Provision for income taxes | (3,137 | ) | (3,100 | ) | (5,280 | ) | (5,526 | ) | |||||||
Pro forma net income | $ | 8,701 | $ | 8,597 | $ | 14,644 | $ | 15,327 | |||||||
Pro forma weighted-average share and per share data: | |||||||||||||||
Pro forma net income per share | |||||||||||||||
Basic | $ | 0.23 | $ | 0.22 | $ | 0.38 | $ | 0.40 | |||||||
Diluted | $ | 0.23 | $ | 0.22 | $ | 0.38 | $ | 0.39 | |||||||
Weighted-average shares used in computing pro forma net income per share | |||||||||||||||
Basic | 37,939,912 | 38,482,074 | 38,296,807 | 38,473,641 | |||||||||||
Diluted | 38,580,722 | 39,043,434 | 39,043,477 | 39,015,259 | |||||||||||
EL POLLO LOCO HOLDINGS, INC.
UNAUDITED RECONCILIATION OF INCOME FROM OPERATIONS TO RESTAURANT CONTRIBUTION
(dollar amounts in thousands)
Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||
June 26, 2019 | June 27, 2018 | June 26, 2019 | June 27, 2018 | ||||||||||||
Restaurant contribution: | |||||||||||||||
Income from operations | $ | 20,580 | $ | 7,589 | $ | 22,872 | $ | 12,037 | |||||||
Add (less): | |||||||||||||||
General and administrative expenses | 9,348 | 12,474 | 20,696 | 25,676 | |||||||||||
Franchise expenses | 7,542 | 6,250 | 13,686 | 12,082 | |||||||||||
Depreciation and amortization | 4,454 | 4,344 | 9,215 | 8,556 | |||||||||||
Loss (gain) on disposal of assets | 134 | (8 | ) | 178 | 53 | ||||||||||
Franchise revenue | (7,918 | ) | (6,553 | ) | (14,362 | ) | (12,659 | ) | |||||||
Franchise advertising fee revenue | (5,683 | ) | (5,453 | ) | (11,066 | ) | (10,550 | ) | |||||||
Recovery of securities lawsuits related legal expenses | (10,000 | ) | (2,429 | ) | (10,000 | ) | (4,063 | ) | |||||||
Asset impairment and closed-store reserves | 565 | 3,963 | 874 | 6,782 | |||||||||||
Loss on sale of restaurants | 927 | — | 5,051 | — | |||||||||||
Restaurant contribution | $ | 19,949 | $ | 20,177 | $ | 37,144 | $ | 37,914 | |||||||
Company-operated restaurant revenue: | |||||||||||||||
Total revenue | $ | 113,740 | $ | 111,633 | $ | 222,717 | $ | 217,389 | |||||||
Less: | |||||||||||||||
Franchise revenue | (7,918 | ) | (6,553 | ) | (14,362 | ) | (12,659 | ) | |||||||
Franchise advertising fee revenue | (5,683 | ) | (5,453 | ) | (11,066 | ) | (10,550 | ) | |||||||
Company-operated restaurant revenue | $ | 100,139 | $ | 99,627 | $ | 197,289 | $ | 194,180 | |||||||
Restaurant contribution margin (%) | 19.9 | % | 20.3 | % | 18.8 | % | 19.5 | % | |||||||