RESTAURANTS DEL TACO: Dialogue and evaluation by administration of the monetary place and working outcomes (Type 10-Q)

The next dialogue and evaluation of economic situation and outcomes of
operations needs to be learn along side the Firm's audited consolidated
monetary statements for the fiscal 12 months ended December 29, 2020, and associated
notes thereto, together with the associated Administration's Dialogue and Evaluation of
Monetary Situation and Outcomes of Operations included within the Firm's Annual
Report on Type 10-Ok filed with the Securities and Alternate Fee ("SEC") on
March 11, 2021.
Along with historic info, this dialogue and evaluation accommodates
forward-looking statements that contain dangers and uncertainties such because the
variety of eating places we intend to open and estimates of our efficient tax
charges. We use phrases similar to "estimates," "projected," "expects," "anticipates,"
"forecasts," "plans," "intends," "believes," "seeks," "might," "will," "ought to,"
"future," "suggest," "preliminary," "steerage" and variations of those phrases or
related expressions (or the detrimental variations of such phrases or expressions) to
determine forward-looking statements.  These statements are primarily based on assumptions
and knowledge accessible to us as of the date any such statements are made and
are topic to dangers and uncertainties.  These dangers and uncertainties embody,
with out limitation, the impression of the COVID-19 pandemic, client demand, our
incapability to efficiently open company-operated or franchise-operated
eating places or set up new markets, competitors in our markets, our incapability
to develop and handle progress profitably, antagonistic adjustments in meals and provide prices,
our incapability to entry extra capital, adjustments in relevant legal guidelines or
laws, meals security and foodborne sickness issues, our incapability to handle
present and to acquire extra franchisees, our incapability to draw and
retain certified personnel, our incapability to profitably develop into new markets,
adjustments in, or the discontinuation of the Firm's repurchase program, and the
chance that we could also be adversely affected by different financial, enterprise,
and/or aggressive components.  Our precise outcomes might differ materially from these
anticipated in these forward-looking statements attributable to these dangers and
uncertainties, in addition to others, together with, with out limitation, these mentioned
in Half I. Merchandise 1A. Danger Components in our Annual Report on Type 10-Ok for our
fiscal 12 months ended December 29, 2020. We assume no obligation to replace or revise
these forward-looking statements because of new info, future occasions
or some other purpose.
Fiscal 12 months
We function on a 52- or 53-week fiscal 12 months ending on the Tuesday closest to
December 31 for monetary reporting functions. Fiscal 12 months 2021 is the 52-week
interval ended December 28, 2021 ("Fiscal 2021"). Fiscal 12 months 2020 is the 52-week
interval ended December 29, 2020 ("Fiscal 2020").
Overview
We're a nationwide operator and franchisor of eating places that includes contemporary and
quick delicacies, together with each Mexican impressed and American basic dishes. As of
June 15, 2021, we've 601 Del Taco eating places, a majority of those within the
Pacific Southwest. In every of our eating places, our meals is made to order in
working kitchens. We serve our clients contemporary and high-quality meals typical of
quick informal eating places however with the pace, comfort and worth related
with conventional fast service eating places ("QSRs"). With attributes of each a
quick informal restaurant and a QSR - a mixture we name QSR+ - we occupy a
place within the restaurant market distinct from our rivals. With a menu
designed to attraction to all kinds of budgets and tastes and lately up to date
inside and exterior designs throughout most of our complete system, we imagine that
we're poised for progress, working throughout the quickest rising section of the
restaurant business, the restricted service restaurant ("LSR") section. With excessive
high quality meals and engaging worth factors, we imagine we provide a compelling worth
proposition relative to each QSR and quick informal friends.

Highlights and Tendencies
Second Quarter 2021 Highlights
Our second quarter 2021 outcomes and highlights embody the next:
•Complete revenues elevated 19.5% for the twelve weeks ended June 15, 2021 to
$125.0 million in comparison with $104.6 million for the twelve weeks ended June 16,
2020. Complete revenues elevated 12.2% for the twenty-four weeks ended June 15,
2021 to $240.5 million in comparison with $214.4 million for the twenty-four weeks
ended June 16, 2020. The rise in each the twelve and twenty-four weeks ended
June 15, 2021 is primarily attributable to a rise in company-operated and
franchise-operated similar retailer gross sales.
•For the twelve weeks ended June 15, 2021, system-wide similar retailer gross sales
elevated 17.8%, company-operated similar retailer gross sales elevated 18.3% and
franchise-operated similar retailer gross sales elevated 17.2%. For the twenty-four weeks
ended June 15, 2021, system-wide similar retailer gross sales elevated 13.5%,
company-operated similar retailer gross sales elevated 11.5% and franchise-operated similar
retailer gross sales elevated 15.6%.
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•In the course of the twelve weeks ended June 15, 2021, we opened two new
franchise-operated eating places. In the course of the twelve weeks ended June 16, 2020, we
bought one company-operated restaurant to a franchisee, closed one
company-operated restaurant and closed two franchise-operated eating places.
•In the course of the twenty-four weeks ended June 15, 2021, we opened two new
company-operated eating places, opened 5 new franchise-operated eating places and
closed two franchise-operated eating places. In the course of the twenty-four weeks ended
June 16, 2020, we opened two new company-operated eating places, opened one new
franchise-operated restaurant, bought six company-operated eating places to
franchisees, closed two company-operated eating places and closed 4
franchise-operated eating places.
Identical Retailer Gross sales
Identical retailer gross sales progress displays the change in year-over-year gross sales for a similar
retailer base. We embody a restaurant in the identical retailer base within the accounting
interval following its 18th full month of operations and exclude restaurant
closures. The next desk reveals the identical retailer gross sales progress for the twelve
and twenty-four weeks ended June 15, 2021 and June 16, 2020:
                                                               12 Weeks Ended                                 24 Weeks Ended
                                                   June 15, 2021           June 16, 2020          June 15, 2021           June 16, 2020
Firm-operated similar retailer gross sales                          18.3  %                (12.6) %                11.5  %                 (7.7) %
Franchise-operated similar retailer gross sales                        17.2  %                 (7.2) %                15.6  %                 (5.6) %
System-wide similar retailer gross sales                               17.8  %                (10.1) %                13.5  %                 (6.7) %



Restaurant Improvement
Del Taco restaurant counts on the finish of the twelve and twenty-four weeks ended
June 15, 2021 and June 16, 2020 had been as follows:
                                                                       12 Weeks Ended                                     24 Weeks Ended
                                                            June 15, 2021              June 16, 2020          June 15, 2021              June 16, 2020
Firm-operated restaurant exercise:
Starting of interval                                                297                        296                    295                         300
Openings                                                             -                          -                      2                           2
Closures                                                             -                         (1)                     -                          (2)

Bought to franchisees                                                  -                         (1)                     -                          (6)
Eating places at finish of interval                                       297                        294                    297                         294
Franchise-operated restaurant exercise:
Starting of interval                                                302                        300                    301                         296
Openings                                                             2                          -                      5                           1
Closures                                                             -                         (2)                    (2)                         (4)
Bought from Firm                                               -                          1                      -                           6

Eating places at finish of interval                                       304                        299                    304                         299
Complete restaurant exercise:
Starting of interval                                                599                        596                    596                         596
Openings                                                             2                          -                      7                           3
Closures                                                             -                         (3)                    (2)                         (6)
Eating places at finish of interval                                       601                        593                    601                         593

The closures proven within the desk above characterize everlasting restaurant closures. Momentary closures, which may happen for quite a lot of causes, usually are not mirrored as a discount on this desk. Our franchisees are impartial companies and choices to shut eating places could also be affected by many components past our management, together with, however not restricted to, franchisees’ agreements with their homeowners and lenders.

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Since 2012, we've targeted on repositioning our model, growing model
consciousness, strengthening operational capabilities and refinancing indebtedness
to construct a basis for future natural and new unit progress. New restaurant
growth is predicted to contribute to our progress technique. Whereas the COVID-19
pandemic impacted our restaurant growth plans for Fiscal 2020 as a result of
vital uncertainties that resulted from the impression of dine-in working
restrictions, numerous social distancing measures and stay-at-home orders on
buyer re-engagement with our model and the short- and long-term impression on
client discretionary spending, we and our franchisees plan to proceed
restaurant growth throughout 2021, together with the latest launch of our new
"Recent Flex" prototype restaurant design. We plan to open 13 system-wide
eating places in Fiscal 2021. Occasionally, we and our franchisees might shut
eating places.
Key Efficiency Indicators

In assessing the efficiency of our enterprise, administration makes use of quite a lot of
monetary and efficiency measures.
These key measures embody firm restaurant gross sales, similar retailer gross sales,
company-operated common unit volumes, restaurant contribution and restaurant
contribution margin, variety of new restaurant openings, EBITDA and Adjusted
EBITDA.
Firm Restaurant Gross sales
Firm restaurant gross sales consists of gross sales of meals and drinks in
company-operated eating places internet of promotional allowances, worker meals and
different reductions. Firm restaurant gross sales in any interval are immediately influenced
by the variety of working weeks in such interval, the variety of open eating places,
similar retailer gross sales and per restaurant gross sales.
Seasonal components and the timing of holidays trigger income to fluctuate from
quarter to quarter. Income per restaurant is usually decrease within the first
quarter attributable to decreased January site visitors. Because of seasonality, quarterly
and annual outcomes of operations and key efficiency indicators, similar to firm
restaurant gross sales and similar retailer gross sales, might fluctuate.
Identical Retailer Gross sales
We frequently monitor firm, franchise and whole system similar retailer gross sales. Identical
retailer gross sales progress displays the change in year-over-year gross sales for the
comparable firm, franchise and whole system restaurant base. We embody a
restaurant in the identical retailer base within the accounting interval following its 18th
full month of operations and exclude restaurant closures. As of June 15, 2021
and June 16, 2020, there have been 290 and 281 eating places, respectively, within the
comparable company-operated restaurant base. As of June 15, 2021 and June 16,
2020, there have been 291 and 279 eating places, respectively, within the comparable
franchise-operated restaurant base. This measure highlights the efficiency of
present eating places because the impression of recent restaurant openings is excluded. Identical
retailer gross sales progress could be generated by a rise within the variety of transactions
and/or by will increase within the common verify ensuing from a shift in menu combine
and/or increased costs ensuing from new merchandise, promotions or worth will increase.
Firm-Operated Common Unit Volumes
We measure company-operated common unit volumes ("AUVs") on each a weekly and
an annual foundation. Weekly AUVs are calculated by dividing the gross sales from
comparable company-operated eating places over a seven day interval from Wednesday
to Tuesday by the variety of comparable eating places. Annual AUVs are calculated
by dividing gross sales for the trailing 52-week interval for all company-operated
eating places which might be within the comparable base by the overall variety of eating places
within the comparable base for such interval. This measurement permits administration to
assess adjustments in client site visitors and spending patterns at our company-operated
eating places and the general efficiency of the restaurant base.
Restaurant Contribution and Restaurant Contribution Margin
Restaurant contribution and restaurant contribution margin are neither required
by, nor offered in accordance with United States typically accepted accounting
rules ("U.S. GAAP"). Restaurant contribution is outlined as firm
restaurant gross sales much less restaurant working bills, that are meals and paper
prices, labor and associated bills and occupancy and different working bills.
Restaurant contribution margin is outlined as restaurant contribution as a
proportion of firm restaurant gross sales. Restaurant contribution and restaurant
contribution margin are supplemental measures of working efficiency of
eating places and the calculations thereof is probably not similar to these reported
by different corporations. Restaurant contribution and restaurant contribution margin
have limitations as analytical instruments and shouldn't be thought of in isolation
or as substitutes for evaluation of outcomes as reported below U.S. GAAP.
Administration believes that restaurant contribution and restaurant contribution
margin are essential instruments for buyers as a result of they're widely-used metrics
throughout the restaurant business to guage restaurant-level productiveness,
effectivity and efficiency. Administration makes use of restaurant contribution and
restaurant
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contribution margin as key efficiency indicators to guage the profitability
of incremental gross sales at Del Taco eating places, to guage restaurant efficiency
throughout durations and to guage restaurant monetary efficiency in contrast with
rivals. See the heading entitled "Administration's Use of Non-GAAP Monetary
Measures" for the reconciliation of restaurant contribution to probably the most immediately
comparable GAAP monetary measure.
Variety of New Restaurant Openings
The variety of restaurant openings displays the variety of new eating places opened
by us and our franchisees throughout a selected reporting interval. Earlier than a brand new
restaurant opens, we and our franchisees incur pre-opening prices, as described
beneath. Some new eating places open with an preliminary start-up interval of upper than
regular gross sales volumes, which subsequently lower to stabilized ranges.
Usually, new eating places expertise regular inefficiencies within the type of
increased meals and paper, labor and different direct working bills and, as a
end result, restaurant contribution margins are typically decrease through the start-up
interval of operation. Usually, the typical start-up interval after which new
firm restaurant gross sales and restaurant working bills normalize is
roughly 26 to 52 weeks. In new markets, the size of time earlier than common
firm restaurant gross sales and restaurant working bills for brand new eating places
stabilize is much less predictable and could be longer because of restricted information
of those markets and shoppers' restricted consciousness of our model. After we enter
new markets, we could also be uncovered to start-up occasions which might be longer and restaurant
contribution margins which might be decrease than typical historic expertise, and
these new eating places is probably not worthwhile and their gross sales efficiency might not
observe historic patterns.
EBITDA and Adjusted EBITDA
EBITDA represents internet revenue (loss) earlier than curiosity expense, provision (profit)
for revenue taxes, depreciation and amortization. Adjusted EBITDA represents internet
revenue (loss) earlier than curiosity expense, provision (profit) for revenue taxes,
depreciation, amortization and objects that we don't contemplate consultant of
ongoing working efficiency, as recognized within the reconciliation desk below
the heading entitled "Administration's Use of Non-GAAP Monetary Measures."
EBITDA and Adjusted EBITDA as offered on this quarterly report are
supplemental measures of efficiency which might be neither required by, nor offered
in accordance with U.S. GAAP. EBITDA and Adjusted EBITDA usually are not measurements of
monetary efficiency below U.S. GAAP and shouldn't be thought of as
options to internet revenue (loss), revenue (loss) from operations or some other
efficiency measures derived in accordance with U.S. GAAP or as options to
money movement from working actions as a measure of liquidity. As well as, in
evaluating EBITDA and Adjusted EBITDA, you ought to be conscious that sooner or later we
might incur bills or costs similar to these added again to calculate EBITDA and
Adjusted EBITDA. Our presentation of EBITDA and Adjusted EBITDA shouldn't be
construed as an inference that future outcomes might be unaffected by uncommon or
nonrecurring objects.
EBITDA and Adjusted EBITDA have limitations as analytical instruments, and it is best to
not contemplate them in isolation, or as substitutes for evaluation of outcomes as
reported below U.S. GAAP. A few of these limitations embody however usually are not restricted
to:

(i)they don't mirror money expenditures, or future necessities for capital
expenditures or contractual commitments;
(ii)they don't mirror adjustments in, or money necessities for, working capital
wants;
(iii)they don't mirror the numerous curiosity expense, or the money
necessities essential to service curiosity or principal funds, on debt;
(iv)though depreciation and amortization are non-cash costs, the belongings
being depreciated and amortized will typically have to get replaced sooner or later,
and EBITDA and Adjusted EBITDA don't mirror any money necessities for such
replacements;
(v)they don't modify for all non-cash revenue or expense objects which might be
mirrored within the statements of money flows;
(vi)they don't mirror the impression of earnings or costs ensuing from issues
we contemplate to not be indicative of ongoing operations; and
(vii)different corporations within the business might calculate these measures in another way
than we do, limiting their usefulness as comparative measures.
We compensate for these limitations by offering particular info concerning
the U.S. GAAP quantities excluded from such non-GAAP monetary measures. We additional
compensate for the constraints in using non-GAAP monetary measures by
presenting comparable U.S. GAAP measures extra prominently.
We imagine EBITDA and Adjusted EBITDA facilitate working efficiency
comparisons from interval to interval by isolating the consequences of some objects that
range from interval to interval with none correlation to core working efficiency
or that adjust
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broadly amongst related corporations. These potential variations could also be brought on by
variations in capital buildings (affecting curiosity expense), tax positions
(such because the impression on durations or adjustments in efficient tax charges or internet
working losses) and the age and guide depreciation of amenities and tools
(affecting relative depreciation expense). We additionally current EBITDA and Adjusted
EBITDA as a result of (i) we imagine these measures are ceaselessly utilized by securities
analysts, buyers and different  events to guage corporations of their
business, (ii) we imagine buyers will discover these measures helpful in assessing
our potential to service or incur indebtedness, and (iii) we use EBITDA and
Adjusted EBITDA internally as benchmarks to match efficiency to that of
rivals. See the heading entitled "Administration's Use of Non-GAAP Monetary
Measures" for the reconciliation of EBITDA and Adjusted EBITDA to internet revenue
(loss).
Key Monetary Definitions
Firm Restaurant Gross sales
Firm restaurant gross sales represents sale of meals and drinks in
company-operated eating places, internet of promotional allowances, worker meals and
different reductions. Firm restaurant gross sales in any interval is immediately influenced
by the variety of working weeks in such interval, the variety of open eating places,
similar retailer gross sales efficiency and per-restaurant gross sales.
Franchise Income
Franchise income consists of franchise royalty revenue from franchisees and, to
a lesser extent, franchise renewal charges and franchise charges from franchise homeowners
for brand new franchise restaurant openings. Franchise charges are collected upon signing
a franchise settlement and deferred and acknowledged as income over the time period of
the franchise settlement and franchise renewal charges are deferred and acknowledged
over the time period of the franchise renewal settlement. To a lesser extent, franchise
income additionally consists of pass-through charges for companies, similar to software program
upkeep and know-how subscriptions, since we're thought of the principal
associated to the acquisition and sale of the companies to the franchisee and haven't any
remaining efficiency obligations. The associated bills are acknowledged in
occupancy and different - franchise subleases and different.
Franchise Promoting Contributions
Franchise promoting contributions include a proportion of a franchise
restaurant's internet gross sales, usually 4%, paid to the Firm for promoting and
promotional companies that the Firm gives. The offset is recorded to
franchise promoting bills.
Franchise Sublease and Different Earnings
Franchise sublease and different revenue primarily consists of rental revenue obtained
from franchisees associated to properties the place we've subleased a leasehold
curiosity to the franchisee however stay primarily liable to the owner. The
associated bills are acknowledged in occupancy and different - franchise subleases and
different. Franchise sublease and different revenue additionally consists of rental revenue for
closed restaurant properties the place we've subleased to a 3rd celebration however stay
primarily liable to the owner. The associated bills are acknowledged in
restaurant closure costs, internet. Franchise sublease and different revenue additionally
consists of info know-how {hardware} similar to level of sale tools,
tablets, kitchen show techniques, servers, scanners and printers that we
often buy from third celebration distributors after which promote to franchisees.
Since we're thought of the principal associated to the acquisition and sale of the
{hardware} to the franchisee and haven't any remaining efficiency obligations, the
franchisee reimbursement is acknowledged as franchise sublease and different revenue
upon switch of the {hardware}. The associated bills are acknowledged in occupancy
and different - franchise subleases and different.
Meals and Paper Prices
Meals and paper prices embody the direct prices related to meals, beverage and
packaging of menu objects. The elements of meals and paper prices are variable in
nature, change with gross sales quantity and are impacted by menu combine and are topic to
will increase or decreases primarily based on fluctuations in commodity, distribution and
transportation prices. Different essential components inflicting fluctuations in meals and
paper prices embody seasonality, promotional exercise and restaurant degree
administration of meals and paper waste. Meals and paper are a big expense and
could be anticipated to develop proportionally as firm restaurant gross sales grows.
Labor and Associated Bills
Labor and associated bills embody all restaurant-level administration and hourly
labor prices, together with wages, advantages, bonuses, employees' compensation expense,
group medical insurance, paid go away and payroll taxes. Like different expense objects,
we anticipate labor and associated bills to develop proportionately as firm
restaurant gross sales grows. Components that affect fluctuations in
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labor and associated bills embody minimal wage, paid sick go away and payroll tax
laws, well being care and employees compensation prices and the efficiency of
Del Taco eating places.
Occupancy and Different Working Bills
Occupancy and different working bills embody all different restaurant-level
working bills, similar to hire, utilities, restaurant provides, repairs and
upkeep, credit score and debit card processing charges, promoting, insurance coverage,
frequent space upkeep, actual property taxes, third celebration supply charges and different
restaurant working prices, together with internet bills incurred for workers who
usually are not offering companies attributable to COVID-19.
Normal and Administrative Bills
Normal and administrative bills are comprised of bills related to
company and regional supervision features that assist the operations of
present eating places and growth of recent eating places, together with compensation
and advantages, journey bills, stock-based compensation bills, authorized and
skilled charges, info techniques, company workplace occupancy prices and
different associated company prices. Additionally included are bills above the restaurant
degree, together with salaries for subject administration, similar to space and regional
managers, and franchise operational assist. Normal and administrative bills
additionally embody authorized, accounting, insurance coverage, investor relations and different bills
which might be incurred as a public firm.
Franchise Promoting Bills
Franchise promoting bills include the franchise portion of promoting
expense.
Depreciation and Amortization
Depreciation and amortization bills are periodic non-cash costs that
include depreciation of mounted belongings, together with leasehold enhancements and
restaurant and different tools, and amortization of assorted intangible belongings
primarily together with franchise rights and capitalized software program.
Occupancy and Different - Franchise Subleases and Different
Occupancy and different - franchise subleases consists of hire, property taxes and
frequent space upkeep paid on properties subleased to franchisees the place we
stay primarily liable to the owner, in addition to different franchise bills
associated to info know-how {hardware} that we often buy from
third celebration distributors after which promote to franchisees and acknowledge in franchise
sublease and different revenue.
Pre-opening Prices
Pre-opening prices are incurred in reference to opening of recent eating places and
incurred previous to opening, together with restaurant labor associated to the hiring and
coaching of restaurant workers, in addition to provides, occupancy prices together with
money and non-cash hire expense and different working bills immediately related
with the opening of recent eating places. Pre-opening prices are expensed as incurred.
Impairment of GoodwillGoodwill arises from the surplus buy worth over acquired internet belongings,
together with identifiable intangible belongings, in enterprise combos. Goodwill is
not amortized, and is as a substitute reviewed for impairment yearly, or extra
ceaselessly if occasions and circumstances point out that it could be impaired. The
quantity by which the carrying quantity of the Firm exceeds its truthful worth is
recorded as impairment of goodwill.
Impairment of Emblems
The Firm's emblems usually are not amortized, however as a substitute are examined for
impairment yearly within the fourth quarter of every fiscal 12 months or extra ceaselessly
if occasions and circumstances point out that the belongings could be impaired. When
occasions or circumstances point out the carrying worth of the Firm's emblems
is probably not recoverable, an applicable impairment cost is recorded.
Impairments may enhance if efficiency of the Firm shouldn't be adequate to
get better the carrying quantity of its emblems.
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Impairment of Lengthy-Lived Belongings
We evaluation long-lived belongings similar to leasehold enhancements, restaurant and different
tools and working lease right-of-use belongings on a unit-by-unit foundation for
impairment. When occasions or circumstances point out the carrying worth of the
belongings is probably not recoverable, an applicable impairment cost is recorded.
Impairments may enhance if efficiency of company-operated eating places shouldn't be
adequate to get better the carrying quantity of the associated long-lived belongings.
Restaurant Closure Costs, Web
Restaurant closure costs, internet, consist primarily of (1) hire expense associated
to beforehand closed eating places; (2) non-lease executory prices for closed
eating places, together with any optimistic or detrimental changes to those quantities as
extra info turns into accessible; and (3) direct prices associated to restaurant
closures.
Loss on Disposal of Belongings and Changes to Belongings Held For Sale, Web
Loss on disposal of belongings and changes to belongings held on the market, internet consists of
the loss on disposal of belongings associated to gross sales, retirements and alternative or
write-off of leasehold enhancements, furnishings, fixtures or tools within the
atypical course of enterprise, impairment losses to scale back the carrying quantity for
belongings held on the market to estimated truthful worth much less prices to promote, remeasurement
losses for belongings held on the market reclassified again to held to be used, features or
losses related to sale-leaseback transactions, features or losses related
with the sale of company-operated eating places to franchisees and features or losses
from the write-off of right-of-use belongings and working lease liabilities
associated to the termination of leases.
Curiosity Expense
Curiosity expense consists primarily of curiosity expense on excellent debt
together with finance lease obligations and different debt. Deferred financing prices and
debt low cost are amortized at value over the lifetime of the associated debt.
Different Earnings
Different revenue consists of proceeds obtained on a authorized settlement associated to
development defects at a company-operated restaurant.
Provision (Profit) for Earnings Taxes
Provision (profit) for revenue taxes consists of federal and state present and
deferred revenue tax expense.
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Outcomes of Operations
Comparability of Outcomes of Operations for the Twelve Weeks Ended June 15, 2021 and
Twelve Weeks Ended June 16, 2020
The next desk presents working outcomes for the twelve weeks ended
June 15, 2021 and twelve weeks ended June 16, 2020, in absolute phrases and
expressed as a proportion of whole income (or firm restaurant gross sales), as
in contrast beneath:

                                                                                12 Weeks Ended
                                                           June 15, 2021                               June 16, 2020                         Enhance / (Lower)
(Greenback quantities in 1000's)                        ($)                   (%)                   ($)                   (%)                  ($)                 (%)
Assertion of Operations Knowledge:
Income:
Firm restaurant gross sales                       $     113,004                 90.4  %       $      95,261                 91.1  %       $   17,743                 18.6  %
Franchise income                                      5,604                  4.5                  4,520                  4.3               1,084                 24.0
Franchise promoting contributions                    4,189                  3.4                  2,783                  2.7               1,406       

50.5

Franchise sublease and different revenue                    2,174                  1.7                  2,006                  1.9                 168                  8.4
Complete income                                        124,971                100.0                104,570                100.0              20,401                 19.5
Working bills
Restaurant working bills:
Meals and paper prices                                  28,797                 25.5    (1)          25,642                 26.9    (1)        3,155       

12.3

Labor and associated bills                            37,214                 32.9    (1)          31,609                 33.2    (1)        5,605       

17.7

Occupancy and different working bills                25,605                 22.7    (1)          22,389                 23.5    (1)        3,216       

14.4

Complete restaurant working bills                   91,616                 81.1    (1)          79,640                 83.6    (1)       11,976                 15.0
Normal and administrative                            11,382                  9.1                  9,432                  9.0               1,950                 20.7
Franchise promoting bills                         4,189                  3.4                  2,783                  2.7               1,406       

50.5

Depreciation and amortization                          5,984                  4.8                  6,285                  6.0                (301)      

(4.8)

Occupancy and other-franchise subleases
and different                                              2,092                  1.7                  1,727                  1.7                 365                 21.1
Pre-opening prices                                         59                    -                     63                  0.1                  (4)                (6.3)

Restaurant closure costs, internet                          386                  0.3                    499                  0.5                (113)      

(22.6)

Loss on disposal of belongings and
changes to belongings held on the market, internet                  52                    -                    435                  0.4                (383)     

(88.0)

Complete working bills                             115,760                 92.6                100,864                 96.5              14,896       

14.8

Earnings from operations                                 9,211                  7.4                  3,706                  3.5               5,505                148.5
Different expense, internet
Curiosity expense                                         701                  0.6                  1,281                  1.2                (580)               (45.3)

Complete different expense, internet                                 701                  0.6                  1,281                  1.2                (580)      

(45.3)

Earnings from operations earlier than provision
for revenue taxes                                       8,510                  6.8                  2,425                  2.3               6,085       

250.9

Provision for revenue taxes                             2,508                  2.0                  3,001                  2.9                (493)      

(16.4)

Web revenue (loss)                              $       6,002                  4.8  %       $        (576)                (0.6) %       $    6,578                *



(1)As a proportion of firm restaurant gross sales.
*Immaterial/not significant
Firm Restaurant Gross sales
Firm restaurant gross sales elevated $17.7 million, or 18.6%, for the twelve weeks
ended June 15, 2021, primarily attributable to a rise in company-operated similar retailer
gross sales of 18.3% due partially to the detrimental impression of COVID-19 on prior 12 months
gross sales.
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Franchise Income
Franchise income elevated $1.1 million, or 24.0%, for the twelve weeks ended
June 15, 2021, primarily attributable to a rise in franchise-operated similar retailer
gross sales of 17.2% in addition to extra franchise-operated eating places open throughout
2021 in comparison with 2020.
Franchise Promoting Contributions
Franchise promoting contributions elevated $1.4 million, or 50.5%, for the
twelve weeks ended June 15, 2021 and is immediately associated to franchise income.
As well as, beginning the final fiscal week of the primary quarter of 2020, as a
results of the COVID-19 pandemic, the Firm decreased franchise promoting
contributions from 4.0% to 2.5% of franchise restaurant internet gross sales for eight
weeks.
Franchise Sublease and Different Earnings
Franchise sublease and different revenue elevated $0.2 million, or 8.4%, for the
twelve weeks ended June 15, 2021, primarily attributable to a rise in different revenue
associated to info know-how {hardware} that we buy from third celebration
distributors after which promote to franchisees.
Meals and Paper Prices
Meals and paper prices elevated $3.2 million, or 12.3%, for the twelve weeks
ended June 15, 2021 primarily as a result of enhance in firm restaurant gross sales.
As a proportion of firm restaurant gross sales, meals and paper prices had been 25.5% for
the twelve weeks ended June 15, 2021 in comparison with 26.9% for the twelve weeks
ended June 16, 2020. This proportion lower was primarily the results of menu
worth will increase.
Labor and Associated Bills
Labor and associated bills elevated $5.6 million, or 17.7%, for the twelve
weeks ended June 15, 2021, primarily attributable to a rise in firm restaurant
gross sales and a California minimal wage enhance on January 1, 2021. As a proportion
of firm restaurant gross sales, labor and associated bills had been 32.9% for the
twelve weeks ended June 15, 2021 in comparison with 33.2% for the twelve weeks ended
June 16, 2020. This proportion lower resulted primarily from the impression of
the identical retailer gross sales enhance together with menu worth will increase, partially offset
by the impression of the elevated California minimal wage and a rise in
employees compensation expense primarily based on underlying claims exercise.
Occupancy and Different Working Bills
Occupancy and different working bills elevated $3.2 million, or 14.4%, for the
twelve weeks ended June 15, 2021, primarily attributable to elevated promoting, credit score
card charges, hire expense, repairs and upkeep and utilities, partially offset
by decrease internet bills associated to COVID-19. As a proportion of firm restaurant
gross sales, occupancy and different working bills had been 22.7% for the twelve weeks
ended June 15, 2021 in comparison with 23.5% for the twelve weeks ended June 16, 2020.
This proportion lower was primarily associated to the impression of the identical retailer
gross sales enhance together with menu worth will increase and decrease internet bills associated to
COVID-19, partially offset by elevated promoting as a p.c of firm
restaurant gross sales.

Normal and Administrative Bills
Normal and administrative bills elevated $2.0 million, or 20.7%, for the
twelve weeks ended June 15, 2021, primarily attributable to increased administration incentive
compensation, authorized bills, wage expense, journey expense and stock-based
compensation expense. As a proportion of whole income, basic and
administrative expense was 9.1% for the twelve weeks ended June 15, 2021
in comparison with 9.0% for the twelve weeks ended June 16, 2020. The rise as a
p.c of whole income was primarily attributable to increased administration incentive
compensation, principally offset by the impression of upper income.
Franchise Promoting Bills
Franchise promoting bills elevated $1.4 million, or 50.5%, for the twelve
weeks ended June 15, 2021 and are immediately associated to franchise promoting
bills. These quantities offset towards franchise promoting contributions
included in income. As well as, beginning the final fiscal week of the primary
quarter of 2020, because of the COVID-19 pandemic, the Firm decreased
franchise promoting contributions from 4.0% to 2.5% of franchise restaurant
internet gross sales for eight weeks.
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Depreciation and Amortization
Depreciation and amortization bills had been $6.0 million and $6.3 million for
the twelve weeks ended June 15, 2021 and June 16, 2020, respectively. The
lower primarily displays decrease amortization and depreciation expense associated
to completely depreciated belongings. As a proportion of whole income, depreciation and
amortization bills had been 4.8% for the twelve weeks ended June 15, 2021
in comparison with 6.0% for the twelve weeks ended June 16, 2020. The lower as a
p.c of whole income was primarily attributable to decrease amortization and
depreciation expense mentioned above, in addition to the impression of upper income.
Occupancy and Different - Franchise Sublease and Different
Occupancy and different - franchise sublease and different was $2.1 million and $1.7
million for the twelve weeks ended June 15, 2021 and June 16, 2020,
respectively. The rise is primarily attributable to a rise in different bills
associated to franchise info know-how service contracts and knowledge
know-how {hardware} that we buy from third celebration distributors after which promote to
franchisees.
Pre-opening Prices
Pre-opening prices had been $0.1 million for each the twelve weeks ended June 15,
2021 and June 16, 2020 attributable to an identical degree of pre-opening exercise in contrast
to the prior 12 months.
Restaurant Closure Costs, Web
Restaurant closure costs, internet, had been $0.4 million and $0.5 million for the
twelve weeks ended June 15, 2021 and June 16, 2020, respectively. The lower
was attributable to decrease hire and property tax expense associated to beforehand closed
eating places.
Loss on Disposal of Belongings and Changes to Belongings Held for Sale, Web
Loss on disposal of belongings and changes to belongings held on the market, internet was $0.1
million and $0.4 million for the twelve weeks ended June 15, 2021 and June 16,
2020, respectively. Present 12 months internet loss on disposal of belongings and changes
to belongings held on the market primarily associated to an adjustment to estimated internet
realizable worth for belongings categorised as held on the market and stuck asset
write-offs. Prior 12 months internet loss on disposal of belongings and changes to belongings
held on the market primarily associated to the write-off of belongings associated to the
closure of 1 company-operated restaurant, an adjustment to estimated internet
realizable worth for belongings categorised as held on the market and a loss on the sale
of 1 company-operated restaurant.
Curiosity Expense
Curiosity expense was $0.7 million and $1.3 million for the twelve weeks ended
June 15, 2021 and June 16, 2020, respectively. The lower is primarily attributable to
decrease common excellent balances and decrease weighted common rates of interest
through the twelve weeks ended June 15, 2021 in comparison with the prior 12 months.
Provision for Earnings Taxes
The efficient revenue tax charges had been 29.5% for the twelve weeks ended June 15,
2021 and 123.8% for the twelve weeks ended June 16, 2020. The supply for
revenue taxes was $2.5 million for the twelve weeks ended June 15, 2021 and $3.0
million for the twelve weeks ended June 16, 2020. The revenue tax expense for the
twelve weeks ended June 15, 2021 is pushed by our estimated annual efficient
revenue tax charge which primarily consists of statutory federal and state tax
charges primarily based on apportioned revenue and the impression of non-tax deductible
compensation to executives, partially offset by federal focused job credit.
The revenue tax expense for the twelve weeks ended June 16, 2020 is pushed by our
estimated efficient revenue tax charge which primarily consists of statutory
federal and state tax charges primarily based on estimated apportioned revenue for fiscal
12 months 2020 and the impression of non-tax deductible compensation to executives,
partially offset by federal focused job credit.

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Outcomes of Operations
Comparability of Outcomes of Operations for the Twenty-4 Weeks Ended June 15,
2021 and Twenty-4 Weeks Ended June 16, 2020
The next desk presents working outcomes for the twenty-four weeks ended
June 15, 2021 and twenty-four weeks ended June 16, 2020, in absolute phrases and
expressed as a proportion of whole income (or firm restaurant gross sales), as
in contrast beneath:

                                                                                24 Weeks Ended
                                                           June 15, 2021                               June 16, 2020                          Enhance / (Lower)
(Greenback quantities in 1000's)                        ($)                   (%)                   ($)                   (%)                  ($)                   (%)
Assertion of Operations Knowledge:
Income:
Firm restaurant gross sales                       $     216,582                 90.1  %       $     195,594                 91.2  %       $    20,988                  10.7  %
Franchise income                                     10,809                  4.5                  8,911                  4.2                1,898                  21.3
Franchise promoting contributions                    8,014                  3.3                  5,994                  2.8                2,020                  33.7
Franchise sublease and different revenue                    5,097                  2.1                  3,881                  1.8                1,216                  31.3
Complete income                                        240,502                100.0                214,380                100.0               26,122                  12.2
Working bills
Restaurant working bills:
Meals and paper prices                                  55,449                 25.6    (1)          53,937                 27.6    (1)         1,512                   2.8
Labor and associated bills                            72,722                 33.6    (1)          66,545                 34.0    (1)         6,177                   9.3
Occupancy and different working bills                50,447                 23.3    (1)          46,797                 23.9    (1)         3,650                   7.8
Complete restaurant working bills                  178,618                 82.5    (1)         167,279                 85.5    (1)        11,339                   6.8
Normal and administrative                            22,643                  9.4                 19,298                  9.0                3,345                  17.3
Franchise promoting bills                         8,014                  3.3                  5,994                  2.8                2,020                  33.7
Depreciation and amortization                         11,931                  5.0                 12,422                  5.8                 (491)                 (4.0)
Occupancy and other-franchise subleases
and different                                              4,970                  2.1                  3,322                  1.5                1,648                  49.6
Pre-opening prices                                        255                  0.1                    296                  0.1                  (41)                (13.9)
Impairment of goodwill                                     -                    -                 87,277                 40.7              (87,277)    

(100.0)

Impairment of emblems                                   -                    -                 11,900                  5.6              (11,900)    

(100.0)

Impairment of long-lived belongings                            -                    -                  8,287                  3.9               (8,287)    

(100.0)

Restaurant closure costs, internet                          798                  0.3                    993                  0.5                 (195)                (19.6)
Loss on disposal of belongings and
changes to belongings held on the market, internet                  54                    -                    557                  0.3                 (503)                (90.3)
Complete working bills                             227,283                 94.5                317,625                148.2              (90,342)                (28.4)
Earnings (loss) from operations                         13,219                  5.5               (103,245)               (48.2)             116,464              (112.8)
Different expense, internet
Curiosity expense                                       1,422                  0.6                  2,789                  1.3               (1,367)                (49.0)
Different revenue                                            (373)                (0.2)                     -                    -                 (373)                *
Complete different expense, internet                               1,049                  0.4                  2,789                  1.3               (1,740)                (62.4)
Earnings (loss) from operations earlier than
provision (profit) for revenue taxes                  12,170                  5.1               (106,034)               (49.5)             118,204                 *
Provision (profit) for revenue taxes                   3,537                  1.5                 (2,990)                (1.4)               6,527                 *
Web revenue (loss)                              $       8,633                  3.6  %       $    (103,044)               (48.1) %       $   111,677                 *



(1)As a proportion of firm restaurant gross sales.
*Immaterial/not significant
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Firm Restaurant Gross sales
Firm restaurant gross sales elevated $21.0 million, or 10.7%, for the twenty-four
weeks ended June 15, 2021, primarily attributable to a rise in company-operated similar
retailer gross sales of 11.5% due partially to the detrimental impression of COVID-19 on prior
12 months gross sales.
Franchise Income
Franchise income elevated $1.9 million, or 21.3%, for the twenty-four ended
June 15, 2021, primarily attributable to a rise in franchise-operated similar retailer
gross sales of 15.6% in addition to extra franchise-operated eating places open throughout
2021 in comparison with 2020.
Franchise Promoting Contributions
Franchise promoting contributions elevated $2.0 million, or 33.7%, for the
twenty-four weeks ended June 15, 2021 and is immediately associated to franchise
income. As well as, beginning the final fiscal week of the primary quarter of
2020, because of the COVID-19 pandemic, the Firm decreased franchise
promoting contributions from 4.0% to 2.5% of franchise restaurant internet gross sales
for eight weeks.
Franchise Sublease and Different Earnings
Franchise sublease and different revenue elevated $1.2 million, or 31.3%, for the
twenty-four weeks ended June 15, 2021, primarily attributable to sublease revenue associated
to the sale of six company-operated eating places to franchisees throughout 2020, in
which we retained the leasehold curiosity to the true property, in addition to an
enhance in different revenue associated to info know-how {hardware} that we
buy from third celebration distributors after which promote to franchisees.
Meals and Paper Prices
Meals and paper prices elevated $1.5 million, or 2.8%, for the twenty-four weeks
ended June 15, 2021 as a result of enhance in firm restaurant gross sales, partially
offset by commodity deflation. As a proportion of firm restaurant gross sales, meals
and paper prices had been 25.6% for the twenty-four weeks ended June 15, 2021
in comparison with 27.6% for the twenty-four weeks ended June 16, 2020. This proportion
lower was the results of menu worth will increase and commodity deflation.
Labor and Associated Bills
Labor and associated bills elevated $6.2 million, or 9.3%, for the twenty-four
weeks ended June 15, 2021, primarily attributable to a rise in firm restaurant
gross sales and a California minimal wage enhance on January 1, 2021. As a proportion
of firm restaurant gross sales, labor and associated bills had been 33.6% for the
twenty-four weeks ended June 15, 2021 in comparison with 34.0% for the twenty-four
weeks ended June 16, 2020. This proportion lower resulted primarily from the
impression of the identical retailer gross sales enhance together with menu worth will increase,
partially offset by the impression of the elevated California minimal wage and an
enhance in employees compensation expense primarily based on underlying claims exercise.
Occupancy and Different Working Bills
Occupancy and different working bills elevated $3.7 million, or 7.8%, for the
twenty-four weeks ended June 15, 2021, primarily attributable to elevated promoting,
third celebration supply charges, hire expense, utilities and bank card charges. As a
proportion of firm restaurant gross sales, occupancy and different working bills
had been 23.3% for the twenty-four weeks ended June 15, 2021 in comparison with 23.9% for
the twenty-four weeks ended June 16, 2020. This proportion lower was
primarily associated to the impression of the identical retailer gross sales enhance together with menu
worth will increase, partially offset by elevated promoting and third celebration
supply charges as a p.c of firm restaurant gross sales.

Normal and Administrative Bills
Normal and administrative bills elevated $3.3 million, or 17.3%, for the
twenty-four weeks ended June 15, 2021, primarily attributable to increased administration
incentive compensation, authorized bills, wage expense and stock-based
compensation expense. As a proportion of whole income, basic and
administrative expense was 9.4% for the twenty-four weeks ended June 15, 2021
in comparison with 9.0% for the twenty-four weeks ended June 16, 2020. The rise as
a p.c of whole income was primarily attributable to increased administration incentive
compensation, partially offset by the impression of upper income.
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Franchise Promoting Bills
Franchise promoting bills elevated $2.0 million, or 33.7%, for the
twenty-four weeks ended June 15, 2021 and are immediately associated to franchise
promoting bills. These quantities offset towards franchise promoting
contributions included in income. As well as, beginning the final fiscal week of
the primary quarter of 2020, because of the COVID-19 pandemic, the Firm
decreased franchise promoting contributions from 4.0% to 2.5% of franchise
restaurant internet gross sales for eight weeks.
Depreciation and Amortization
Depreciation and amortization bills had been $11.9 million and $12.4 million for
the twenty-four weeks ended June 15, 2021 and June 16, 2020, respectively. The
lower primarily displays decrease amortization and depreciation expense associated
to completely depreciated belongings. As a proportion of whole income, depreciation and
amortization bills had been 5.0% for the twenty-four weeks ended June 15, 2021
in comparison with 5.8% for the twenty-four weeks ended June 16, 2020. The lower as
a p.c of whole income was primarily attributable to decrease amortization and
depreciation expense mentioned above, in addition to the impression of upper income.
Occupancy and Different - Franchise Sublease and Different
Occupancy and different - franchise sublease and different was $5.0 million and $3.3
million for the twenty-four weeks ended June 15, 2021 and June 16, 2020,
respectively. The rise is primarily attributable to sublease expense associated to the
sale of six company-operated eating places to franchisees throughout 2020, wherein we
retained the leasehold curiosity to the true property, in addition to a rise in
different bills associated to info know-how {hardware} that we buy from
third celebration distributors after which promote to franchisees.
Pre-opening Prices
Pre-opening prices had been $0.3 million for each the twenty-four weeks ended
June 15, 2021 and June 16, 2020 attributable to an identical degree of pre-opening exercise
in comparison with the prior 12 months.
Impairment of Goodwill
No impairment costs had been recorded through the twenty-four weeks ended June 15,
2021. The Firm recorded a non-cash impairment cost of $87.3 million throughout
the twenty-four weeks ended June 16, 2020 associated to an interim goodwill
impairment evaluation carried out through the first quarter of 2020 in response to
adjustments in enterprise, market and financial situations ensuing from the COVID-19
pandemic coupled with a sustained decline within the Firm's inventory worth, which
had been indicators of potential goodwill impairment.
Impairment of Emblems
No impairment costs had been recorded through the twenty-four weeks ended June 15,
2021. The Firm recorded a non-cash impairment cost of $11.9 million throughout
the twenty-four weeks ended June 16, 2020 associated to an interim trademark
impairment evaluation carried out through the first quarter of 2020 in response to
adjustments in enterprise, market and financial situations ensuing from the COVID-19
pandemic coupled with a sustained decline within the Firm's inventory worth, which
had been indicators of potential impairment.
Impairment of Lengthy-Lived Belongings
No impairment costs had been recorded through the twenty-four weeks ended June 15,
2021. The Firm recorded a non-cash impairment cost of $8.3 million throughout
the twenty-four weeks ended June 16, 2020 associated to the analysis of
long-lived belongings underlying eight eating places in California, Nevada and Georgia
which had indicators of impairment.
Restaurant Closure Costs, Web
Restaurant closure costs, internet, had been $0.8 million and $1.0 million for the
twenty-four weeks ended June 15, 2021 and June 16, 2020, respectively. The
lower was attributable to decrease hire and property tax expense associated to beforehand
closed eating places.
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Loss on Disposal of Belongings and Changes to Belongings Held for Sale, Web
Loss on disposal of belongings and changes to belongings held on the market, internet was $0.1
million and $0.6 million for the twenty-four weeks ended June 15, 2021 and
June 16, 2020, respectively. Present 12 months internet loss on disposal of belongings and
changes to belongings held on the market primarily associated to an adjustment to
estimated internet realizable worth for belongings categorised as held on the market and stuck
asset write-offs. Prior 12 months internet loss on disposal of belongings and changes to
belongings held on the market primarily associated to an adjustment ensuing from the
reclassification of 14 company-operated eating places from held on the market to held
to be used, losses on the closure of 1 company-operated restaurant, an adjustment
to estimated internet realizable worth for belongings categorised as held on the market and
losses on the sale of six company-operated eating places, partially offset by a
acquire from one sale-leaseback transaction.
Curiosity Expense
Curiosity expense was $1.4 million and $2.8 million for the twenty-four weeks
ended June 15, 2021 and June 16, 2020, respectively. The lower is primarily
attributable to decrease common excellent balances and decrease weighted common curiosity
charges through the twenty-four weeks ended June 15, 2021 in comparison with the prior
12 months.
Different Earnings
Different revenue was $0.4 million for the twenty-four weeks ended June 15, 2021 and
consisted of proceeds from a authorized settlement associated to development defect
points at a company-operated restaurant. There was no different revenue for the
twenty-four weeks ended June 16, 2020.
Provision (Profit) for Earnings Taxes
The efficient revenue tax charges had been 29.1% for the twenty-four weeks ended
June 15, 2021 and a couple of.8% for the twenty-four weeks ended June 16, 2020. The
provision (profit) for revenue taxes consisted of revenue tax expense of $3.5
million for the twenty-four weeks ended June 15, 2021 and revenue tax good thing about
$3.0 million for the twenty-four weeks ended June 16, 2020. The revenue tax
expense for the twenty-four weeks ended June 15, 2021 is pushed by our estimated
annual efficient revenue tax charge which primarily consists of statutory federal
and state tax charges primarily based on apportioned revenue and the impression of non-tax
deductible compensation to executives, partially offset by federal focused job
credit. The revenue tax profit for the twenty-four weeks ended June 16, 2020 is
primarily impacted by impairment of non-tax deductible goodwill of $87.3 million
and reclassification of $3.5 million of goodwill from held on the market, in addition to
statutory federal and state tax charges primarily based on estimated apportioned revenue for
fiscal 12 months 2020 and the impression of non-tax deductible compensation to
executives, partially offset by federal focused job credit.
Liquidity and Capital Sources
Potential Impacts of Market Situations on Capital Sources
We imagine that money from operations, along with our money steadiness of $6.6
million and accessible borrowing capability of $126.6 million at June 15, 2021,
might be adequate to fulfill ongoing debt service necessities, working lease
obligations, capital expenditures, working capital necessities and different wants
for a minimum of the following 12 months. As well as, share repurchases and our
quarterly money dividend might impression our accessible capital assets. Ought to our
enterprise take longer to get better from the COVID-19 pandemic than we at present
anticipate, there are actions we will take to preserve liquidity.
Abstract of Money Flows
Our main sources of liquidity and capital assets have been money offered
from operations, money and money equivalents, and our senior secured credit score
amenities. Our main necessities for liquidity and capital are new
eating places, present restaurant capital investments (primarily upkeep),
investments in infrastructure and knowledge know-how, curiosity funds on
debt, lease obligations, revenue tax funds, purchases below our share
repurchase program, dividend funds, working capital and basic company
wants. The working capital necessities usually are not vital since clients pay
for his or her purchases in money or by fee card (credit score or debit) on the time of
sale. Thus, we're capable of promote many stock objects earlier than we've to pay
suppliers for such objects since we usually have fee phrases for our meals and
paper suppliers. Our company-operated eating places don't require vital
inventories.
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Desk of Contents The next desk presents abstract info on money flows for the durations indicated (in 1000’s).

                                                24 Weeks Ended
                                      June 15, 2021       June 16, 2020
Web money offered by (utilized in)
Working actions                 $       21,268$       21,461
Investing actions                        (11,306)            (11,917)
Financing actions                        (11,294)               (216)

Web enhance (lower) in money $ (1332)$ 9,328

Money Flows Supplied by Working Actions
In the course of the twenty-four weeks ended June 15, 2021, money flows offered by
working actions had been $21.3 million. The money flows offered by working
actions resulted from internet revenue of $8.6 million, non-cash changes for
asset depreciation and amortization of $12.1 million, amortization of working
lease belongings of $10.6 million, stock-based compensation of $2.9 million,
deferred revenue taxes of $0.7 million and a loss on disposal of belongings and
changes to belongings held on the market of $0.1 million, partially offset by internet
working capital necessities of $13.3 million and different revenue of $0.4 million.
In the course of the twenty-four weeks ended June 16, 2020, money flows offered by
working actions had been $21.5 million. The money flows offered by working
actions resulted from a internet lack of $103.0 million, non-cash changes for
goodwill impairment of $87.3 million, trademark impairment of $11.9 million,
long-lived asset impairment of $8.3 million, asset depreciation and amortization
of $12.6 million, amortization of working lease belongings of $10.2 million,
stock-based compensation of $2.6 million, a loss on disposal of belongings and
changes to belongings held on the market of $0.6 million and internet working capital
necessities of $1.4 million, partially offset by deferred revenue taxes of $10.4
million.
Money Flows Utilized in Investing Actions
In the course of the twenty-four weeks ended June 15, 2021, money flows utilized in investing
actions had been $11.3 million, which was the results of buy of property and
tools and different belongings of $11.3 million. For the twenty-four weeks ended
June 15, 2021, buy of property and tools was $9.6 million, together with
roughly $7.6 million to keep up or improve our present eating places and
info techniques and for discretionary funding in tools, know-how
and reworked eating places, in addition to roughly $2.0 million for brand new
restaurant development. This was partially offset by proceeds obtained on a
authorized settlement associated to development defects at a company-operated
restaurant of $0.4 million. Moreover, accrued capital expenditures decreased
$0.5 million, leading to internet money paid of $9.7 million associated to the acquisition
of property and tools through the twenty-four weeks ended June 15, 2021.
In the course of the twenty-four weeks ended June 16, 2020, money flows utilized in investing
actions had been $11.9 million, which had been primarily the results of buy of
property and tools and different belongings of $14.6 million, partially offset by
proceeds from the disposal of property and tools of $1.4 million and
proceeds from the sale of company-operated eating places to franchisees for $1.3
million.
Money Flows Utilized in Financing Actions
In the course of the twenty-four weeks ended June 15, 2021, money flows utilized in financing
actions had been $11.3 million. The money flows utilized in financing actions had been
primarily the results of the repurchase of 316,450 shares of our frequent inventory for
an mixture buy worth of $3.1 million, dividend funds of $2.9 million,
funds of tax withholding of $0.2 million associated to restricted inventory vesting
and funds on finance leases and different debt totaling $0.1 million. In
addition, through the twenty-four weeks ended June 15, 2021, the Firm borrowed
$15.0 million on its revolving credit score facility and made funds of $20.0
million on its revolving credit score facility.
In the course of the twenty-four weeks ended June 16, 2020, money flows utilized in financing
actions had been $0.2 million. The money flows utilized in financing actions had been
primarily the results of funds of tax withholding of $0.1 million associated to
restricted inventory vesting and funds on finance leases totaling $0.1 million.
As well as, through the twenty-four weeks ended June 16, 2020, the Firm
borrowed $65.0 million on the revolving credit score facility and made funds of
$65.0 million on its revolving credit score facility.
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Senior Credit score Facility
In the course of the fourth quarter of 2019, the Firm refinanced the Senior Credit score
Facility, which gives for a $250 million five-year senior secured revolving
facility. The Senior Credit score Facility, as amended, features a sub restrict of
$35 million for letters of credit score. The Senior Credit score Facility, as amended, will
mature on September 19, 2024.
The Senior Credit score Facility, as amended, accommodates sure monetary covenants,
together with the upkeep of a consolidated whole lease adjusted leverage ratio
and a consolidated mounted cost protection ratio. The Firm was in compliance
with the monetary covenants as of June 15, 2021.
As of June 15, 2021, the weighted-average rate of interest on the excellent
steadiness of the Senior Credit score Facility was 1.86%. As of June 15, 2021, there have been
$110.0 million of borrowings below the Senior Credit score Facility and letters of
credit score excellent of $13.4 million. Unused borrowing capability at June 15, 2021
was $126.6 million.
Inventory Repurchase Program
In February 2016, the Board of Administrators licensed a share repurchase program
below which we might buy as much as $25.0 million within the mixture of our frequent
inventory and warrants, which expires upon completion of the repurchase program,
except terminated earlier by the Board of Administrators. On August 23, 2016, we
introduced that the Board of Administrators elevated the repurchase program by $25.0
million to $50.0 million. The Board of Administrators licensed a further
enhance for the repurchase program efficient July 23, 2018 of one other $25.0
million to a complete of $75.0 million. Purchases below this system could also be made in
open market or privately negotiated transactions. In the course of the twelve weeks ended
June 15, 2021, the Firm repurchased 210,401 shares of frequent inventory for an
common worth per share of $10.07 for an mixture value of roughly $2.1
million, together with incremental direct prices to accumulate the shares. In the course of the
twenty-four weeks ended June 15, 2021, the Firm repurchased 316,450 shares of
frequent inventory for a median worth per share of $9.69 for an mixture value of
roughly $3.1 million, together with incremental direct prices to accumulate the
shares. As of June 15, 2021, there was roughly $15.0 million remaining
below the share repurchase program. All the Firm's excellent warrants
expired on June 30, 2020. We now have no obligations to repurchase shares below the
share repurchase program, and the timing and worth of shares bought, if any,
will depend upon our inventory worth, market situations and different components.
Development Defect Points
In the course of the second quarter of 2020, we recognized numerous development defects
associated to a few closed eating places in Texas. In the course of the fourth quarter of 2020,
we recognized a fourth closed restaurant with development defects. We imagine
the problems are attributable to faulty development carried out by the identical
basic contractor for all 4 eating places. We plan to undertake voluntary
rehabilitation of the 4 properties, and whereas the total extent of voluntary
rehabilitation prices usually are not but recognized, we're pursuing authorized cures towards
the final contractor to get better future incurred prices.

Administration’s Use of Non-GAAP Monetary Measures A reconciliation of company restaurant gross sales and restaurant contribution is offered beneath (in 1000’s):

                                                               12 Weeks Ended                                24 Weeks Ended
                                                    June 15, 2021

June 16, 2020June 15, 2021June 16, 2020
Firm restaurant sale

                           $     113,004          $ 

95,261 $ 216,582$ 195,594
Restaurant working bills

                             91,616                 79,640                178,618                167,279
Restaurant contribution                            $      21,388          $ 

15 621 $ 37,964$ 28,315
Contribution margin of the restaurant

                              18.9  %                16.4  %                17.5  %                14.5  %



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  Desk of Contents
A reconciliation of revenue (loss) from operations to restaurant contribution is
offered beneath (in 1000's):
                                                            12 Weeks Ended                                24 Weeks Ended
                                                 June 15, 2021

June 16, 2020June 15, 2021June 16, 2020
Working revenue (loss)

                   $       9,211          $    

3,706 $ 13,219($ 103,245)
Much less: franchise revenue

                                      (5,604)                (4,520)               (10,809)                (8,911)
Franchise promoting contributions                    (4,189)                (2,783)                (8,014)                (5,994)
Franchise sublease revenue and different                    (2,174)                (2,006)                (5,097)                (3,881)

Extra:

Normal and administrative                             11,382                  9,432                 22,643                 19,298
Franchise promoting bills                          4,189                  2,783                  8,014                  5,994
Depreciation and amortization                           5,984                  6,285                 11,931                 12,422
Occupancy and different - franchise subleases
and different                                               2,092                  1,727                  4,970                  3,322
Pre-opening prices                                          59                     63                    255                    296
Impairment of goodwill                                      -                      -                      -                 87,277
Impairment of emblems                                    -                      -                      -                 11,900
Impairment of long-lived belongings                             -                      -                      -                  8,287
Restaurant closure costs, internet                           386                    499                    798                    993
Loss on disposal of belongings and
changes to belongings held on the market, internet                   52                    435                     54                    557
Restaurant contribution                         $      21,388          $    

15 621 $ 37,964$ 28,315
Firm restaurant sale

                        $     113,004          $    

95,261 $ 216,582$ 195,594
Contribution margin of the restaurant

                           18.9  %                16.4  %                17.5  %                14.5  %

The next desk presents the reconciliations of internet revenue (loss) with EBITDA and adjusted EBITDA (in 1000’s):

                                                                12 Weeks Ended                                  24 Weeks Ended
                                                     June 15, 2021           June 16, 2020           June 15, 2021           June 16, 2020
Web revenue (loss)                                  $        6,002

$ (576) $ 8,633(103,044) $
Non-GAAP changes: Provision (profit) for revenue taxes

                        2,508                   3,001                   3,537                  (2,990)
Curiosity expense                                              701                   1,281                   1,422                   2,789
Depreciation and amortization                               5,984                   6,285                  11,931                  12,422
EBITDA                                                     15,195                   9,991                  25,523                 (90,823)
Inventory-based compensation expense (a)                        1,519                   1,413                   2,919                   2,638
Loss on disposal of belongings and changes
to belongings held on the market, internet (b)                               52                     435                      54                     557
Impairment of goodwill (c)                                      -                       -                       -                  87,277
Impairment of emblems (d)                                    -                       -                       -                  11,900
Impairment of long-lived belongings (e)                             -                       -                       -                   8,287
Restaurant closure costs, internet (f)                           386                     499                     798                     993
Amortization of favorable and unfavorable
lease belongings and liabilities, internet (g)                         (85)                    (66)                   (171)                   (115)
Pre-opening prices (h)                                          59                      63                     255                     296
Sublease revenue for closed eating places (i)                   (269)                   (248)                   (525)                   (498)
Govt transition prices (j)                                  -                       -                       -                     287
Different revenue (ok)                                                -                       -                    (373)                      -
Adjusted EBITDA                                    $       16,857$       12,087$       28,480$       20,799



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Contents

(a)Consists of non-cash, stock-based compensation.
(b)Loss on disposal of belongings and changes to belongings held on the market, internet
consists of changes to scale back the carrying quantity for belongings held on the market to
estimated truthful worth much less value to promote, remeasurement losses for belongings held for
sale reclassified again to held to be used, loss or acquire on disposal of belongings
associated to gross sales, retirements and alternative or write-off of leasehold
enhancements or tools within the atypical course of enterprise, internet features or
losses recorded related to the sale of company-operated eating places to
franchisees, features from the write-off of right-of-use belongings and working lease
liabilities associated to the termination of leases and internet features or losses
recorded related to sale-leaseback transactions.
(c)Consists of non-cash costs associated to impairment of goodwill.
(d)Consists of non-cash costs associated to impairment of emblems.
(e)Consists of non-cash costs associated to impairment of long-lived belongings.
(f)Restaurant closure prices embody hire expense, non-lease executory prices,
different direct prices related to beforehand closed eating places and future
obligations related to the closure of a restaurant.
(g)Consists of amortization of favorable lease belongings and unfavorable lease
liabilities.
(h)Pre-opening prices include prices immediately related to the opening of
new eating places and incurred previous to opening, together with restaurant labor,
provides, money and non-cash hire expense and different associated pre-opening prices.
These are typically incurred over the three to 5 months previous to opening.
(i)Consists of different sublease revenue associated to closed eating places which were
subleased to 3rd events.
(j)Consists of prices related to the transition of former Firm executives,
similar to severance expense.
(ok)Throughout 2021, different revenue consists of a authorized settlement associated to
development defects at a company-operated restaurant.
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