17015000
200000000
15000000
15000000
37438686
20397000
37438686
37438686
200000000
0
1002449
0.01
100000000
0.01
3050456
13054000
77465000
1366000
150000000
30923000
592000
808000
374000
5038000
-142648000
1478000
359934000
217660000
2790000
46833000
3420000
447463000
3982000
4098000
229803000
7838000
6579000
203000
0
150800000
8587000
1400000
248674000
83015000
6031000
125000
4090000
10982000
238000
160480000
1596400
447463000
118000
19360000
1708000
102000
61888000
1803000
40003000
742000
4170000
1455000
37464000
0.0262
0.0217
6666
1924891
1572000
1446000
17000000
30200000
43000000
94826000
50548000
2783000
12323000
243
173
7000000
43000000
200000000
0.01
200000000
0.01
300000000
100000000
0.01
15.00
100000000
37420450
37420450
200000000
0
0.01
100000000
0.01
13013000
75310000
1535000
165000000
31577000
638000
208000
374000
5528000
-149439000
1673000
359465000
210400000
2730000
46147000
3390000
455306000
832000
3818000
3918000
244906000
7970000
6204000
208000
0
11499000
248674000
82090000
5759000
125000
5108000
15566000
255000
157400000
1800800
455306000
128000
19490000
1900000
102000
61888000
1944000
43983000
778000
4170000
1544000
37213000
92834000
49890000
2353000
12323000
500000
1500000
8.56381 for 1
8.563811
0.85
8214286
112300000
1071429
0.06
0.05
2
0.18
1444694
7582000
30157316
0.19
218369
28712622
800000
64000
4000
-31000
-82000
-444000
5887000
-276000
2000000
0
11510000
-276000
81427000
475000
3661000
5470000
5003000
5214000
76213000
1229000
237000
-2877000
5623000
69917000
389000
983000
181000
192000
93000
3382000
19313000
417000
24023000
2600000
2595000
-539000
644000
-3661000
59380000
53000
6630000
-323000
43000
169000
0
55000
10000
16044000
0.03
0.36
2
0.70
158000
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>Basis of Presentation</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
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. 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 its 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 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 31, 2014.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
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 2014,
which was a 53-week year, ended on December 31, 2014. Fiscal
2015, which is a 52-week year, will end on December 30, 2015.
Because fiscal 2014 is a 53-week year, both revenues and expenses,
and other financial and operational figures, may be on an elevated
scale compared with 52-week periods both before and after.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
On April 22, 2014, Chicken Acquisition Corp.
(“CAC”), which was a predecessor of Holdings, as well
as its wholly owned subsidiary, Chicken Subsidiary Corp
(“CSC”) and CSC’s wholly owned subsidiary, the
former El Pollo Loco Holdings, Inc. (“Old Holdings”)
entered into the following reorganization transactions:
(i) Old Holdings merged with and into CSC with CSC continuing
as the surviving corporation; (ii) CSC merged with and into
CAC with CAC continuing as the surviving corporation and
(iii) CAC renamed itself El Pollo Loco Holdings, Inc.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
Holdings has no material assets or operations. Holdings and
Holdings’ direct subsidiary, EPL Intermediate, Inc.
(“Intermediate”), guarantee EPL’s 2014 Revolver
(see Note 4) on a full and unconditional basis 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.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
Under the 2014 Revolver, Holdings may not make certain payments
such as cash dividends, except that it may, inter alia,
(i) pay up to $1 million per year to repurchase or redeem
qualified equity interests of Holdings held by past or present
officers, directors, or employees (or their estates) of the Company
upon death, disability, or termination of employment, (ii) pay
under its income tax receivable agreement (the “TRA”),
and, (iii) so long as no default or event of default has
occurred and is continuing, (a) make non-cash repurchases of
equity interests in connection with the exercise of stock options
by directors and officers, provided that those equity interests
represent a portion of the consideration of the exercise price of
those stock options, (b) pay up to $2.5 million per year
pursuant to stock option plans, employment agreements, or incentive
plans, (c) make up to $5 million in other restricted payments
per year, and (d) make other restricted payments, provided
that such payments would not cause, in each case, on a pro forma
basis, (x) its lease-adjusted consolidated leverage ratio to
equal or exceed 4.25 times and (y) its consolidated fixed
charge coverage ratio to be less than 1.75 times.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
On July 14, 2014, we amended our certificate of incorporation
to increase our authorized share count to 200,000,000 shares of
common stock, par value $0.01 per share, and split our stock
8.56381:1. On July 24, 2014, we amended and restated our
certificate of incorporation to, among other things, increase our
authorized share count to 300,000,000 shares of stock, including
200,000,000 shares of common stock and 100,000,000 shares of
preferred stock, each par value $0.01 per share. On July 30,
2014, we completed our initial public offering of 8,214,286 shares
of common stock at a price to the public of $15.00 per share (the
“IPO”), including 1,071,429 shares sold to the
underwriters pursuant to their option to purchase additional
shares. After underwriting discounts, commissions, and fees and
expenses of IPO offering and distribution, as set forth in our
registration statement for the IPO on Form S-1, we received net IPO
proceeds of approximately $112.3 million. We used these proceeds
primarily to repay in whole a $100 million second lien term loan
(the “Second Lien Term Loan”). All share and per-share
data herein have been adjusted to reflect the 8.56381 for 1 common
stock split effected on July 14, 2014 as though it had
occurred prior to the earliest data presented.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>7. COMMITMENTS AND CONTINGENCIES</b></p>
<!-- xbrl,body -->
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
<b>Legal Matters</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
On or about February 24, 2014, a former employee filed a class
action in the Superior Court of the State of California, County of
Orange, against EPL on behalf of all putative class members (all
hourly employees from 2010 to the present) alleging certain
violations of California labor laws, including failure to pay
overtime compensation, failure to provide meal periods and rest
breaks, and failure to provide itemized wage statements. The
putative lead plaintiff’s requested remedies include
compensatory and punitive damages, injunctive relief, disgorgement
of profits, and reasonable attorneys’ fees and costs. No
specific amount of damages sought was specified in the complaint.
The Company was served with the complaint on March 3, 2014.
While the Company intends to vigorously defend against this action,
including its class certification, the ultimate outcome of the case
is presently not determinable as it is in a preliminary phase.
Thus, the Company cannot at this time determine the likelihood of
an adverse judgment nor a likely range of damages in the event of
an adverse judgment. Any settlement of, or judgment with a negative
outcome arising from, this lawsuit could have a material adverse
effect.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company is also involved in various other claims and legal
actions that arise in the ordinary course of business. The Company
does not believe that the ultimate resolution of these other
actions will have a material adverse effect on the Company’s
financial position, results of operations, liquidity, or capital
resources. A significant increase in the number of claims, or an
increase in amounts owing under successful claims, could materially
and adversely affect the Company’s business, financial
condition, results of operations, and cash flows.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>Purchasing Commitments</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The Company has long-term beverage supply agreements with certain
major beverage vendors. Pursuant to the terms of these
arrangements, marketing rebates are provided to the Company and its
franchisees from the beverage vendors based upon the dollar volume
of purchases for system-wide restaurants which will vary according
to their demand for beverage syrup and fluctuations in the market
rates for beverage syrup. These contracts have terms extending into
2017 with an estimated Company obligation totaling $17.0
million.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
At April 1, 2015, the Company’s total estimated
commitment to purchase chicken was $30.2 million.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>Contingent Lease Obligations</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
As a result of assigning the Company’s interest in
obligations under real estate leases in connection with the sale of
Company-operated restaurants to some of the Company’s
franchisees, the Company is contingently liable on four lease
agreements. These leases have various terms, the latest of which
expires in 2022. As of April 1, 2015, the potential amount of
undiscounted payments the Company could be required to make in the
event of non-payment by the primary lessee was $1,572,000. The
present value of these potential payments discounted at the
Company’s estimated pre-tax cost of debt at April 1,
2015 was $1,446,000. The Company’s franchisees are primarily
liable on the leases. The Company has cross-default provisions with
these franchisees that would put them in default of their franchise
agreements in the event of non-payment under the leases. The
Company believes that these cross-default provisions reduce the
risk that payments will be required to be made under these leases.
Accordingly, no liability has been recorded in the Company’s
consolidated financial statements related to these contingent
liabilities.</p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 18px">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>Employment Agreements</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The Company has employment agreements with four of the officers of
the Company on an at will basis. These agreements provide for
minimum salary levels, possible annual adjustments for
cost-of-living changes, and incentive bonuses that are payable
under certain business conditions.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>Indemnification Agreements</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The Company has entered into indemnification agreements with each
of its current directors and executive officers. These agreements
require the Company to indemnify these individuals to the fullest
extent permitted under Delaware law against liabilities that may
arise by reason of their service to the Company and to advance
expenses incurred as a result of any proceeding against them as to
which they could be indemnified. The Company also intends to enter
into indemnification agreements with future directors and executive
officers.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>4. CREDIT AGREEMENTS</b></p>
<!-- xbrl,body -->
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
On December 11, 2014, the Company refinanced its debt, with
EPL, Intermediate, and Holdings entering into a credit agreement
with Bank of America, N.A., as administrative agent, swingline
lender, and letter of credit issuer, the lenders party thereto, and
the other parties thereto, which provides for a $200 million
five-year senior secured revolving facility (the “2014
Revolver”). The 2014 Revolver includes a sub limit of $15
million for letters of credit and a sub limit of $15 million for
swingline loans. At April 1, 2015, $7.0 million of letters of
credit were outstanding and $43.0 million was available to borrow
under the revolving line of credit. The 2014 Revolver will mature
on or about December 11, 2019.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
Borrowings under the 2014 Revolver (other than any swingline loans)
bear interest, at the borrower’s option, at rates based upon
either LIBOR or a base rate, plus, for each rate, a margin
determined in accordance with a lease-adjusted consolidated
leverage ratio-based pricing grid. The base rate is calculated as
the highest of (a) the federal funds rate plus 0.50%,
(b) the prime rate of Bank of America, or (c) LIBOR plus
1.00%. For LIBOR loans, the margin is in the range of 1.75% to
2.50%, and for base rate loans the margin is in the range of 0.75%
to 1.50%. The margin is initially set at 2.00% for LIBOR loans and
at 1.00% for base rate loans until the delivery of financial
statements and a compliance certificate for the first quarter of
2015. The interest rate range was 2.17% to 2.62% for the period
ended April 1, 2015.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The 2014 Revolver includes a number of negative and financial
covenants, including, among others, the following (all subject to
certain exceptions): a maximum lease-adjusted consolidated leverage
ratio covenant, a minimum consolidated fixed charge coverage ratio,
and limitations on indebtedness, liens, investments, asset sales,
mergers, consolidations, liquidations, dissolutions, restricted
payments, and negative pledges. The 2014 Revolver also includes
certain customary affirmative covenants and events of default. The
Company was in compliance with all such covenants at April 1,
2015. See Note 1 for restrictions on the payment of dividends under
the 2014 Revolver.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>Transaction Costs</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Transaction costs of $1.5 million were incurred in connection with
the December 11, 2014 refinancing and were capitalized and are
included in other assets in the accompanying condensed consolidated
balance sheets and the related amortization is reflected as a
component of interest expense, net, in the accompanying condensed
consolidated statements of operations.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>Maturities</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
There are no required principal payments prior to maturity for the
2014 Revolver.</p>
</div>
0.17
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>8. NET INCOME PER SHARE</b></p>
<!-- xbrl,body -->
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Basic net income per share is calculated using the weighted-average
number of shares of common stock outstanding during the thirteen
weeks ended April 1, 2015, and March 26, 2014. Diluted
net income per share is calculated using the weighted-average
number of shares of common stock outstanding and potentially
dilutive during the period, using the treasury stock method.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
Below are basic and diluted net income per share data for the
periods indicated, which are in thousands except for per share
data.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="76%" align="center" border="0"><!-- Begin Table Head -->
<tr>
<td width="72%"></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1pt solid" valign="bottom" colspan="6" align="center"><b>Thirteen Weeks Ended</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1pt solid" valign="bottom" colspan="2" align="center"><b>April 1,<br />
2015</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1pt solid" valign="bottom" colspan="2" align="center"><b>March 26,<br />
2014</b></td>
<td valign="bottom"> </td>
</tr>
<!-- End Table Head --><!-- Begin Table Body -->
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Numerator:</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Net income</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">6,791</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">5,470</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Denominator:</p>
</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Weighted-average shares outstanding—basic</p>
</td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">37,424,745</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">28,712,622</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Weighted-average shares outstanding—diluted</p>
</td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">38,921,884</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">30,157,316</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Net income per share—basic</p>
</td>
<td valign="bottom"></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.18</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.19</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Net income per share—diluted</p>
</td>
<td valign="bottom"></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.17</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.18</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Anti-dilutive securities not considered in diluted EPS
calculation</p>
</td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">5,865</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">218,369</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<!-- End Table Body --></table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
Below is a reconciliation of basic and diluted share counts.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="76%" align="center" border="0"><!-- Begin Table Head -->
<tr>
<td width="74%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1pt solid" valign="bottom" colspan="6" align="center"><b>Thirteen Weeks Ended</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1pt solid" valign="bottom" colspan="2" align="center"><b>April 1,<br />
2015</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1pt solid" valign="bottom" colspan="2" align="center"><b>March 26,<br />
2014</b></td>
<td valign="bottom"> </td>
</tr>
<!-- End Table Head --><!-- Begin Table Body -->
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Weighted-average shares outstanding—basic</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">37,424,745</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">28,712,622</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Dilutive effect of stock options and restricted shares</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,497,139</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,444,694</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Weighted-average shares outstanding—diluted</p>
</td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">38,921,884</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">30,157,316</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>Goodwill and Indefinite Lived Intangible Assets</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
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.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
Upon the sale of a restaurant, we decrement 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 compared to the fair value of the reporting unit
retained.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company performs annual impairment tests for goodwill during
the fourth fiscal quarter of each year, or more frequently if
impairment indicators arise.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company reviews goodwill for impairment utilizing either a
qualitative assessment or a two-step process. If the Company
decides that it is appropriate to perform a qualitative assessment
and conclude 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 two-step process, the first
step of the goodwill impairment test is used to identify potential
impairment by comparing 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 not impaired and the second step of
the impairment test is unnecessary. If the carrying amount of a
reporting unit exceeds its fair value, the second step is performed
to measure the amount of impairment by comparing the carrying
amount of the goodwill to a determination of the implied value of
the goodwill. If the carrying amount of goodwill is greater than
the implied value, an impairment charge is recognized for the
difference.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company performs annual impairment tests 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 its impairment loss.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The assumptions used in the estimate of fair value are generally
consistent with the past performance of the Company’s
reporting unit 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.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company did not identify any indicators of potential impairment
during the thirteen weeks ended April 1, 2015, and therefore
did not perform any impairment review, nor did the Company record
any impairment.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
Below is a reconciliation of basic and diluted share counts.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="76%" align="center" border="0"><!-- Begin Table Head -->
<tr>
<td width="74%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1pt solid" valign="bottom" colspan="6" align="center"><b>Thirteen Weeks Ended</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1pt solid" valign="bottom" colspan="2" align="center"><b>April 1,<br />
2015</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1pt solid" valign="bottom" colspan="2" align="center"><b>March 26,<br />
2014</b></td>
<td valign="bottom"> </td>
</tr>
<!-- End Table Head --><!-- Begin Table Body -->
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Weighted-average shares outstanding—basic</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">37,424,745</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">28,712,622</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Dilutive effect of stock options and restricted shares</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,497,139</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,444,694</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Weighted-average shares outstanding—diluted</p>
</td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">38,921,884</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">30,157,316</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
</tr>
</table>
</div>
10-Q
El Pollo Loco Holdings, Inc.
LOCO
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES</b></p>
<!-- xbrl,body -->
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
<b>Overview</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
El Pollo Loco Holdings, Inc. (“Holdings”) is a Delaware
corporation headquartered in Costa Mesa, California. Holdings and
its direct and indirect subsidiaries are collectively known as
“we,” “us” or the “Company.”
Our activities are conducted principally through our indirect
wholly-owned subsidiary, El Pollo Loco, Inc. (“EPL”),
which develops, franchises, licenses, and operates quick-service
restaurants under the name El Pollo Loco<sup style="FONT-SIZE: 85%; VERTICAL-ALIGN: top">®</sup> and operates
under one operating segment. At April 1, 2015, we operated 173
and franchised 243 El Pollo Loco restaurants.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>Basis of Presentation</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
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. 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 its 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 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 31, 2014.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
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 2014,
which was a 53-week year, ended on December 31, 2014. Fiscal
2015, which is a 52-week year, will end on December 30, 2015.
Because fiscal 2014 is a 53-week year, both revenues and expenses,
and other financial and operational figures, may be on an elevated
scale compared with 52-week periods both before and after.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
On April 22, 2014, Chicken Acquisition Corp.
(“CAC”), which was a predecessor of Holdings, as well
as its wholly owned subsidiary, Chicken Subsidiary Corp
(“CSC”) and CSC’s wholly owned subsidiary, the
former El Pollo Loco Holdings, Inc. (“Old Holdings”)
entered into the following reorganization transactions:
(i) Old Holdings merged with and into CSC with CSC continuing
as the surviving corporation; (ii) CSC merged with and into
CAC with CAC continuing as the surviving corporation and
(iii) CAC renamed itself El Pollo Loco Holdings, Inc.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
Holdings has no material assets or operations. Holdings and
Holdings’ direct subsidiary, EPL Intermediate, Inc.
(“Intermediate”), guarantee EPL’s 2014 Revolver
(see Note 4) on a full and unconditional basis 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.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
Under the 2014 Revolver, Holdings may not make certain payments
such as cash dividends, except that it may, inter alia,
(i) pay up to $1 million per year to repurchase or redeem
qualified equity interests of Holdings held by past or present
officers, directors, or employees (or their estates) of the Company
upon death, disability, or termination of employment, (ii) pay
under its income tax receivable agreement (the “TRA”),
and, (iii) so long as no default or event of default has
occurred and is continuing, (a) make non-cash repurchases of
equity interests in connection with the exercise of stock options
by directors and officers, provided that those equity interests
represent a portion of the consideration of the exercise price of
those stock options, (b) pay up to $2.5 million per year
pursuant to stock option plans, employment agreements, or incentive
plans, (c) make up to $5 million in other restricted payments
per year, and (d) make other restricted payments, provided
that such payments would not cause, in each case, on a pro forma
basis, (x) its lease-adjusted consolidated leverage ratio to
equal or exceed 4.25 times and (y) its consolidated fixed
charge coverage ratio to be less than 1.75 times.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
On July 14, 2014, we amended our certificate of incorporation
to increase our authorized share count to 200,000,000 shares of
common stock, par value $0.01 per share, and split our stock
8.56381:1. On July 24, 2014, we amended and restated our
certificate of incorporation to, among other things, increase our
authorized share count to 300,000,000 shares of stock, including
200,000,000 shares of common stock and 100,000,000 shares of
preferred stock, each par value $0.01 per share. On July 30,
2014, we completed our initial public offering of 8,214,286 shares
of common stock at a price to the public of $15.00 per share (the
“IPO”), including 1,071,429 shares sold to the
underwriters pursuant to their option to purchase additional
shares. After underwriting discounts, commissions, and fees and
expenses of IPO offering and distribution, as set forth in our
registration statement for the IPO on Form S-1, we received net IPO
proceeds of approximately $112.3 million. We used these proceeds
primarily to repay in whole a $100 million second lien term loan
(the “Second Lien Term Loan”). All share and per-share
data herein have been adjusted to reflect the 8.56381 for 1 common
stock split effected on July 14, 2014 as though it had
occurred prior to the earliest data presented.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>Principles of Consolidation</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
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.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>Use of Estimates</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
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 period 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 termination liabilities, stock-based compensation, income tax
receivable agreement liability, and income tax valuation
allowances.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>Cash and Cash Equivalents</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The Company considers all highly-liquid instruments with a maturity
of three months or less at the date of purchase to be cash
equivalents.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>Restricted Cash</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The Company’s restricted cash represents cash collateral to
one commercial bank for Company credit cards.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>Reclassifications</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Certain comparative prior year amounts in the condensed
consolidated financial statements and accompanying notes have been
reclassified to conform to the current year presentation. These
reclassifications have no effect on previously-reported working
capital, net income, earnings per share, stockholder’s
equity, or cash flows.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>Liquidity</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The Company’s principal liquidity requirements are to service
our debt and to meet capital expenditure needs. At April 1,
2015, the Company’s total debt (including capital lease
liabilities) was $150.8 million. The Company’s ability to
make payments on its indebtedness and to fund planned capital
expenditures depends on available cash and on its ability to
generate adequate cash flows in the future, which, to a certain
extent, is subject to general economic, financial, competitive,
legislative, regulatory, and other factors that are beyond the
Company’s control. Based on current operations, the Company
believes that its cash flow from operations, available cash of $8.6
million at April 1, 2015, and available borrowings under the
2014 Revolver (which availability was approximately $43.0 million
at April 1, 2015) will be adequate to meet the Company’s
liquidity needs for the next 12 months.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>Recent Accounting Pronouncements</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
In April 2015, the FASB issued ASU No. 2015-03, Simplifying
the Presentation of Debt Issuance Costs. To simplify presentation
of debt issuance costs, the standard requires that debt issuance
costs be presented in the balance sheet as a direct deduction from
the carrying amount of debt liability, consistent with debt
discounts or premiums. The recognition and measurement guidance for
debt issuance costs would not be affected by the amendments in this
Update. ASU 2015-03 applies to all entities and is effective for
annual reporting periods beginning after December 15, 2015,
with early adoption permitted. The standard is to be applied
retrospectively. The Company does not expect that the adoption of
this standard will have a material effect on its consolidated
financial statements.</p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 18px">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>Subsequent Events</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The Company evaluated subsequent events that have occurred after
April 1, 2015, 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.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>Concentration of Risk</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Cash and cash equivalents are maintained at financial institutions
and, at times, balances may exceed federally-insured limits. The
Company has never experienced any losses related to these
balances.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company had two suppliers for which amounts due at
April 1, 2015 totaled 7% and 6% of the Company’s
accounts payable. As of December 31, 2014, the Company had two
different suppliers for which amounts totaled 6% and 5% of the
Company’s accounts payable. Purchases from the
Company’s two largest suppliers totaled 36% and 4% at
April 1, 2015 and 36% and 3% at March 26, 2014 of the
Company’s purchases. Company-operated and franchised
restaurants in the greater Los Angeles area generated, in the
aggregate, approximately 68% and 70% of total revenue for the
thirteen weeks ended April 1, 2015, and March 26, 2014,
respectively.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
There have been no material changes from the risk factors
previously disclosed in our annual report on Form 10-K for the year
ended December 31, 2014. For information regarding
concentration of risk, see Item 1A “Risk Factors”
in our annual report on Form 10-K for the year ended
December 31, 2014<b><i>.</i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>Goodwill and Indefinite Lived Intangible Assets</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
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.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
Upon the sale of a restaurant, we decrement 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 compared to the fair value of the reporting unit
retained.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company performs annual impairment tests for goodwill during
the fourth fiscal quarter of each year, or more frequently if
impairment indicators arise.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company reviews goodwill for impairment utilizing either a
qualitative assessment or a two-step process. If the Company
decides that it is appropriate to perform a qualitative assessment
and conclude 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 two-step process, the first
step of the goodwill impairment test is used to identify potential
impairment by comparing 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 not impaired and the second step of
the impairment test is unnecessary. If the carrying amount of a
reporting unit exceeds its fair value, the second step is performed
to measure the amount of impairment by comparing the carrying
amount of the goodwill to a determination of the implied value of
the goodwill. If the carrying amount of goodwill is greater than
the implied value, an impairment charge is recognized for the
difference.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company performs annual impairment tests 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 its impairment loss.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The assumptions used in the estimate of fair value are generally
consistent with the past performance of the Company’s
reporting unit 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.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company did not identify any indicators of potential impairment
during the thirteen weeks ended April 1, 2015, and therefore
did not perform any impairment review, nor did the Company record
any impairment.</p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 18px">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>Income Taxes</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The provision for income taxes, income taxes payable and deferred
income taxes is determined using the asset and liability method.
Deferred tax assets and liabilities are determined based on
temporary differences between the financial carrying amounts and
the tax bases of assets and liabilities using enacted tax rates in
effect in the years in which the temporary differences are expected
to reverse. On a periodic basis, the Company assesses the
probability that our net deferred tax assets, if any, will be
recovered. If, after evaluating all of the positive and negative
evidence, a conclusion is made that it is more likely than not that
some portion or all of the net deferred tax assets will not be
recovered, a valuation allowance is provided by charging to tax
expense to reserve the portion of deferred tax assets which are not
expect to be realized.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company reviews its filing positions for all open tax years in
all U.S. federal and state jurisdictions where the Company is
required to file.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
When there are uncertainties related to potential income tax
benefits, in order to qualify for recognition, the position the
Company takes has to have at least a “more likely than
not” chance of being sustained (based on the position’s
technical merits) upon challenge by the respective authorities. The
term “more likely than not” means a likelihood of more
than 50 percent. Otherwise, the Company may not recognize any of
the potential tax benefit associated with the position. The Company
recognizes a benefit for a tax position that meets the “more
likely than not” criterion at the largest amount of tax
benefit that is greater than 50 percent likely of being realized
upon its effective resolution. Unrecognized tax benefits involve
management’s judgment regarding the likelihood of the benefit
being sustained. The final resolution of uncertain tax positions
could result in adjustments to recorded amounts and may affect our
results of operations, financial position, and cash flows.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company’s policy is to recognize interest and penalties
related to income tax matters in income tax expense. The Company
had no accrual for interest or penalties at April 1, 2015, or
at December 31, 2014, and did not recognize interest or
penalties during the thirteen weeks ended April 1, 2015, or
March 26, 2014, since there were no material unrecognized tax
benefits. Management believes no material changes to the amount of
unrecognized tax benefits will occur within the next twelve
months.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
On July 30, 2014, the Company entered into Income Tax
Receivable Agreement (the TRA). The TRA calls for the Company to
pay to its pre-IPO stockholders 85% of the savings in cash that the
Company realizes in its taxes as a result of utilizing its net
operating losses and other tax attributes attributable to preceding
periods.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>Income Taxes</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The provision for income taxes, income taxes payable and deferred
income taxes is determined using the asset and liability method.
Deferred tax assets and liabilities are determined based on
temporary differences between the financial carrying amounts and
the tax bases of assets and liabilities using enacted tax rates in
effect in the years in which the temporary differences are expected
to reverse. On a periodic basis, the Company assesses the
probability that our net deferred tax assets, if any, will be
recovered. If, after evaluating all of the positive and negative
evidence, a conclusion is made that it is more likely than not that
some portion or all of the net deferred tax assets will not be
recovered, a valuation allowance is provided by charging to tax
expense to reserve the portion of deferred tax assets which are not
expect to be realized.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company reviews its filing positions for all open tax years in
all U.S. federal and state jurisdictions where the Company is
required to file.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
When there are uncertainties related to potential income tax
benefits, in order to qualify for recognition, the position the
Company takes has to have at least a “more likely than
not” chance of being sustained (based on the position’s
technical merits) upon challenge by the respective authorities. The
term “more likely than not” means a likelihood of more
than 50 percent. Otherwise, the Company may not recognize any of
the potential tax benefit associated with the position. The Company
recognizes a benefit for a tax position that meets the “more
likely than not” criterion at the largest amount of tax
benefit that is greater than 50 percent likely of being realized
upon its effective resolution. Unrecognized tax benefits involve
management’s judgment regarding the likelihood of the benefit
being sustained. The final resolution of uncertain tax positions
could result in adjustments to recorded amounts and may affect our
results of operations, financial position, and cash flows.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company’s policy is to recognize interest and penalties
related to income tax matters in income tax expense. The Company
had no accrual for interest or penalties at April 1, 2015, or
at December 31, 2014, and did not recognize interest or
penalties during the thirteen weeks ended April 1, 2015, or
March 26, 2014, since there were no material unrecognized tax
benefits. Management believes no material changes to the amount of
unrecognized tax benefits will occur within the next twelve
months.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
On July 30, 2014, the Company entered into Income Tax
Receivable Agreement (the TRA). The TRA calls for the Company to
pay to its pre-IPO stockholders 85% of the savings in cash that the
Company realizes in its taxes as a result of utilizing its net
operating losses and other tax attributes attributable to preceding
periods.</p>
</div>
2014-04-22
Non-accelerated Filer
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>Restricted Cash</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The Company’s restricted cash represents cash collateral to
one commercial bank for Company credit cards.</p>
</div>
0.0100
P2Y6M
1497139
14313000
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Other noncurrent liabilities consist of the following (in
thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="76%" align="center" border="0"><!-- Begin Table Head -->
<tr>
<td width="76%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1pt solid" valign="bottom" colspan="2" align="center"><b>April 1,<br />
2015</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1pt solid" valign="bottom" colspan="2" align="center"><b>December 31,<br />
2014</b></td>
<td valign="bottom"> </td>
</tr>
<!-- End Table Head --><!-- Begin Table Body -->
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Deferred rent</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">6,579</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">6,204</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
TRA payable</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">37,464</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">37,213</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Other</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,790</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,730</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Total other noncurrent liabilities</p>
</td>
<td valign="bottom"></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">46,833</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">46,147</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>9. RELATED PARTY TRANSACTIONS</b></p>
<!-- xbrl,body -->
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Trimaran Capital, L.L.C. (“Trimaran”) and Freeman
Spogli & Co. (“Freeman Spogli”) indirectly
beneficially own shares sufficient for majority control over all
matters requiring stockholder votes, including: the election of
directors; mergers, consolidations and acquisitions; the sale of
all or substantially all of the Company’s assets and other
decisions affecting the Company’s capital structure;
amendments to the Company’s certificate of incorporation or
by-laws; and the Company’s winding up and dissolution.
Furthermore, pursuant to the limited liability company operating
agreement of Trimaran Pollo Partners, L.L.C. (“LLC”),
the majority stockholder, investment funds managed by Trimaran and
Freeman Spogli have the right to instruct LLC to appoint certain
members of the board of directors of the Company, subject to
certain conditions. Specifically, provided LLC owns a majority of
the Company’s common stock, Freeman Spogli will be able to
appoint one member of the board of directors for so long as it
holds 5% of the outstanding membership interests of LLC, and
Trimaran will be able to appoint the remaining members of the board
of directors.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
On November 18, 2005, the Company entered into a Monitoring
and Management Services Agreement (the “Agreement”)
with Trimaran Fund Management, L.L.C. (“Fund
Management”), an affiliate of the majority owner of the
Company and of certain directors, which provided for annual fees of
$500,000 and reasonable expenses. This Agreement was amended on
December 26, 2007 to add an affiliate of Freeman Spogli,
Freeman Spogli & Co. V, L.P., as a party sharing in the
fees payable under the Agreement. During the thirteen weeks ended
March 26, 2014, $158,000 was paid pursuant to this Agreement.
This amount was included in general and administrative expenses in
the accompanying condensed consolidated statements of operations.
The Agreement terminated as of the Company’s initial public
offering.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>5. OTHER ACCRUED EXPENSES AND CURRENT LIABILITIES</b></p>
<!-- xbrl,body -->
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Other accrued expenses and current liabilities consist of the
following (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="76%" align="center" border="0"><!-- Begin Table Head -->
<tr>
<td width="76%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1pt solid" valign="bottom" colspan="2" align="center"><b>April, 1,<br />
2015</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1pt solid" valign="bottom" colspan="2" align="center"><b>December 31,<br />
2014</b></td>
<td valign="bottom"> </td>
</tr>
<!-- End Table Head --><!-- Begin Table Body -->
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Accrued sales and property taxes</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">4,098</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">3,918</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Income tax receivable agreement payable</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4,170</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4,170</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Gift card liability</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,366</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,535</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Other</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,420</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,390</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Total other accrued expenses and current liabilities</p>
</td>
<td valign="bottom"></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">13,054</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">13,013</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>6. OTHER NONCURRENT LIABILITIES</b></p>
<!-- xbrl,body -->
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Other noncurrent liabilities consist of the following (in
thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="76%" align="center" border="0"><!-- Begin Table Head -->
<tr>
<td width="76%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1pt solid" valign="bottom" colspan="2" align="center"><b>April 1,<br />
2015</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1pt solid" valign="bottom" colspan="2" align="center"><b>December 31,<br />
2014</b></td>
<td valign="bottom"> </td>
</tr>
<!-- End Table Head --><!-- Begin Table Body -->
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Deferred rent</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">6,579</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">6,204</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
TRA payable</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">37,464</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">37,213</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Other</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,790</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,730</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Total other noncurrent liabilities</p>
</td>
<td valign="bottom"></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">46,833</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">46,147</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
</tr>
</table>
</div>
(a) the federal funds rate plus 0.50%, (b) the prime rate of Bank of America, or (c) LIBOR plus 1.00%. For LIBOR loans, the margin is in the range of 1.75% to 2.50%, and for base rate loans the margin is in the range of 0.75% and 1.50%. The margin is initially set at 2.00% for LIBOR loans and at 1.00% for base rate loans until the delivery of financial statements and a compliance certificate for the period ended April 1, 2015. The interest rate range was 2.17% to 2.62% at April 1, 2015.
2048007
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>Use of Estimates</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
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 period 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 termination liabilities, stock-based compensation, income tax
receivable agreement liability, and income tax valuation
allowances.</p>
</div>
2015-04-01
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>Cash and Cash Equivalents</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The Company considers all highly-liquid instruments with a maturity
of three months or less at the date of purchase to be cash
equivalents.</p>
</div>
1
false
--12-30
2015
38921884
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>Principles of Consolidation</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
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.</p>
</div>
0.18
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
Below are basic and diluted net income per share data for the
periods indicated, which are in thousands except for per share
data.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="76%" align="center" border="0"><!-- Begin Table Head -->
<tr>
<td width="72%"></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1pt solid" valign="bottom" colspan="6" align="center"><b>Thirteen Weeks Ended</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1pt solid" valign="bottom" colspan="2" align="center"><b>April 1,<br />
2015</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1pt solid" valign="bottom" colspan="2" align="center"><b>March 26,<br />
2014</b></td>
<td valign="bottom"> </td>
</tr>
<!-- End Table Head --><!-- Begin Table Body -->
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Numerator:</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Net income</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">6,791</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">5,470</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Denominator:</p>
</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Weighted-average shares outstanding—basic</p>
</td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">37,424,745</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">28,712,622</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Weighted-average shares outstanding—diluted</p>
</td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">38,921,884</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">30,157,316</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Net income per share—basic</p>
</td>
<td valign="bottom"></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.18</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.19</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Net income per share—diluted</p>
</td>
<td valign="bottom"></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.17</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.18</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Anti-dilutive securities not considered in diluted EPS
calculation</p>
</td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">5,865</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">218,369</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
</tr>
</table>
</div>
0001606366
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>3. STOCK-BASED COMPENSATION</b></p>
<!-- xbrl,body -->
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
At April 1, 2015, options to purchase 3,050,456 shares of
common stock were outstanding, including 2,048,007 vested and
1,002,449 unvested. Unvested options vest over time, or upon our
achieving annual financial goals. However, upon a change in
control, the board may accelerate vesting. At April 1, 2015,
1,924,891 premium options remained outstanding. For the thirteen
ended April 1, 2015, there were exercises of stock options for
19,720 shares.</p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
At April 1, 2015 there were 6,666 restricted shares
outstanding. Restricted shares vest over time.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
At April 1, 2015, we had total unrecognized compensation
expense of $1.4 million, related to unvested stock options and
restricted shares, which we expect to recognize over a
weighted-average period of 2.5 years.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
Total stock-based compensation expense was $296,600 for the
thirteen weeks ended April 1, 2015, and was $168,900 for the
thirteen weeks ended March 26, 2014.</p>
</div>
On or about February 24, 2014
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>Recent Accounting Pronouncements</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
In April 2015, the FASB issued ASU No. 2015-03, Simplifying
the Presentation of Debt Issuance Costs. To simplify presentation
of debt issuance costs, the standard requires that debt issuance
costs be presented in the balance sheet as a direct deduction from
the carrying amount of debt liability, consistent with debt
discounts or premiums. The recognition and measurement guidance for
debt issuance costs would not be affected by the amendments in this
Update. ASU 2015-03 applies to all entities and is effective for
annual reporting periods beginning after December 15, 2015,
with early adoption permitted. The standard is to be applied
retrospectively. The Company does not expect that the adoption of
this standard will have a material effect on its consolidated
financial statements.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>2. PROPERTY AND EQUIPMENT</b></p>
<!-- xbrl,body -->
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The costs and related accumulated depreciation and amortization of
major classes of property are as follows (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="76%" align="center" border="0"><!-- Begin Table Head -->
<tr>
<td width="74%"></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1pt solid" valign="bottom" colspan="2" align="center"><b>April 1,<br />
2015</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1pt solid" valign="bottom" colspan="2" align="center"><b>December 31,<br />
2014</b></td>
<td valign="bottom"> </td>
</tr>
<!-- End Table Head --><!-- Begin Table Body -->
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Land</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">12,323</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">12,323</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Buildings and improvements</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">94,826</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">92,834</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Other property and equipment</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">50,548</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">49,890</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Construction in progress</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,783</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,353</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">160,480</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">157,400</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Less: accumulated depreciation and amortization</p>
</td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(77,465</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(75,310</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">83,015</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">82,090</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
<!-- End Table Body --></table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
Depreciation expense was $3.1 million and $2.6 million for the
thirteen weeks ended April 1, 2015, and March 26, 2014,
respectively. The gross value of assets under capital leases for
buildings and improvements was $1,596,400 and $1,800,800 at
April 1, 2015 and December 31, 2014, respectively.
Accumulated depreciation for assets under capital leases was
$1,478,000 and $1,673,000 for the periods ended April 1, 2015
and December 31, 2014, respectively. For the thirteen weeks
ended April 1, 2015, capital expenditures related primarily to
restaurant remodeling and new restaurant expenditures, which
totaled $1.2 million and $0.6 million, respectively. For the
thirteen weeks ended March 24, 2014, capital expenditures
related primarily to restaurant remodeling and new restaurant
expenditures, which totaled $2.0 million and $0.8 million,
respectively.</p>
</div>
Under the 2014 Revolver, Holdings may not make certain payments such as cash dividends, except that it may, inter alia, (i) pay up to $1 million per year to repurchase or redeem qualified equity interests of Holdings held by past or present officers, directors, or employees (or their estates) of the Company upon death, disability, or termination of employment, (ii) pay under its income tax receivable agreement (the “TRA”), and, (iii) so long as no default or event of default has occurred and is continuing, (a) make non-cash repurchases of equity interests in connection with the exercise of stock options by directors and officers, provided that those equity interests represent a portion of the consideration of the exercise price of those stock options, (b) pay up to $2.5 million per year pursuant to stock option plans, employment agreements, or incentive plans, (c) make up to $5 million in other restricted payments per year, and (d) make other restricted payments, provided that such payments would not cause, in each case, on a pro forma basis, (x) its lease-adjusted consolidated leverage ratio to equal or exceed 4.25 times and (y) its consolidated fixed charge coverage ratio to be less than 1.75 times.
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>Subsequent Events</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The Company evaluated subsequent events that have occurred after
April 1, 2015, 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.</p>
</div>
Q1
5865
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>Concentration of Risk</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Cash and cash equivalents are maintained at financial institutions
and, at times, balances may exceed federally-insured limits. The
Company has never experienced any losses related to these
balances.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company had two suppliers for which amounts due at
April 1, 2015 totaled 7% and 6% of the Company’s
accounts payable. As of December 31, 2014, the Company had two
different suppliers for which amounts totaled 6% and 5% of the
Company’s accounts payable. Purchases from the
Company’s two largest suppliers totaled 36% and 4% at
April 1, 2015 and 36% and 3% at March 26, 2014 of the
Company’s purchases. Company-operated and franchised
restaurants in the greater Los Angeles area generated, in the
aggregate, approximately 68% and 70% of total revenue for the
thirteen weeks ended April 1, 2015, and March 26, 2014,
respectively.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
There have been no material changes from the risk factors
previously disclosed in our annual report on Form 10-K for the year
ended December 31, 2014. For information regarding
concentration of risk, see Item 1A “Risk Factors”
in our annual report on Form 10-K for the year ended
December 31, 2014<b><i>.</i></b></p>
</div>
2019-12-11
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>Liquidity</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The Company’s principal liquidity requirements are to service
our debt and to meet capital expenditure needs. At April 1,
2015, the Company’s total debt (including capital lease
liabilities) was $150.8 million. The Company’s ability to
make payments on its indebtedness and to fund planned capital
expenditures depends on available cash and on its ability to
generate adequate cash flows in the future, which, to a certain
extent, is subject to general economic, financial, competitive,
legislative, regulatory, and other factors that are beyond the
Company’s control. Based on current operations, the Company
believes that its cash flow from operations, available cash of $8.6
million at April 1, 2015, and available borrowings under the
2014 Revolver (which availability was approximately $43.0 million
at April 1, 2015) will be adequate to meet the Company’s
liquidity needs for the next 12 months.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Other accrued expenses and current liabilities consist of the
following (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="76%" align="center" border="0"><!-- Begin Table Head -->
<tr>
<td width="76%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1pt solid" valign="bottom" colspan="2" align="center"><b>April, 1,<br />
2015</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1pt solid" valign="bottom" colspan="2" align="center"><b>December 31,<br />
2014</b></td>
<td valign="bottom"> </td>
</tr>
<!-- End Table Head --><!-- Begin Table Body -->
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Accrued sales and property taxes</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">4,098</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">3,918</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Income tax receivable agreement payable</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4,170</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4,170</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Gift card liability</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,366</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,535</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Other</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,420</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,390</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Total other accrued expenses and current liabilities</p>
</td>
<td valign="bottom"></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">13,054</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">13,013</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
</tr>
</table>
</div>
("Old Holdings") entered into the following reorganization transactions (i) Old Holdings merged with and into CSC with CSC continuing as the surviving corporation; (ii) CSC merged with and into CAC with CAC continuing as the surviving corporation and (iii) CAC renamed itself El Pollo Loco Holdings, Inc.
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>Reclassifications</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Certain comparative prior year amounts in the condensed
consolidated financial statements and accompanying notes have been
reclassified to conform to the current year presentation. These
reclassifications have no effect on previously-reported working
capital, net income, earnings per share, stockholder’s
equity, or cash flows.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The costs and related accumulated depreciation and amortization of
major classes of property are as follows (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="76%" align="center" border="0">
<tr>
<td width="74%"></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>April 1,<br />
2015</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>December 31,<br />
2014</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Land</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">12,323</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">12,323</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Buildings and improvements</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">94,826</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">92,834</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Other property and equipment</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">50,548</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">49,890</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Construction in progress</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,783</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,353</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">160,480</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">157,400</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Less: accumulated depreciation and amortization</p>
</td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(77,465</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(75,310</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">83,015</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">82,090</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
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