
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 endedDecember 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 theSecurities and Alternate Fee ("SEC") onMarch 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 endedDecember 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 toDecember 31 for monetary reporting functions. Fiscal 12 months 2021 is the 52-week interval endedDecember 28, 2021 ("Fiscal 2021"). Fiscal 12 months 2020 is the 52-week interval endedDecember 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 ofJune 15, 2021 , we've 601Del 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 endedJune 15, 2021 to$125.0 million in comparison with$104.6 million for the twelve weeks endedJune 16, 2020 . Complete revenues elevated 12.2% for the twenty-four weeks endedJune 15, 2021 to$240.5 million in comparison with$214.4 million for the twenty-four weeks endedJune 16, 2020 . The rise in each the twelve and twenty-four weeks endedJune 15, 2021 is primarily attributable to a rise in company-operated and franchise-operated similar retailer gross sales. •For the twelve weeks endedJune 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 endedJune 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%. 20 -------------------------------------------------------------------------------- Desk of Contents •In the course of the twelve weeks endedJune 15, 2021 , we opened two new franchise-operated eating places. In the course of the twelve weeks endedJune 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 endedJune 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 endedJune 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 endedJune 15, 2021 andJune 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 endedJune 15, 2021 andJune 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.
21 -------------------------------------------------------------------------------- Desk of Contents 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 ofJune 15, 2021 andJune 16, 2020 , there have been 290 and 281 eating places, respectively, within the comparable company-operated restaurant base. As ofJune 15, 2021 andJune 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 withUnited 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 belowU.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 22 -------------------------------------------------------------------------------- Desk of Contents contribution margin as key efficiency indicators to guage the profitability of incremental gross sales atDel 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 withU.S. GAAP. EBITDA and Adjusted EBITDA usually are not measurements of monetary efficiency belowU.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 withU.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 belowU.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 theU.S. GAAP quantities excluded from such non-GAAP monetary measures. We additional compensate for the constraints in using non-GAAP monetary measures by presenting comparableU.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 23 -------------------------------------------------------------------------------- Desk of Contents 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 24 -------------------------------------------------------------------------------- Desk of Contents 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 ofDel 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 ofGoodwill Goodwill 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. 25 -------------------------------------------------------------------------------- Desk of Contents 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. 26 -------------------------------------------------------------------------------- Desk of Contents Outcomes of Operations Comparability of Outcomes of Operations for the Twelve Weeks EndedJune 15, 2021 and Twelve Weeks EndedJune 16, 2020 The next desk presents working outcomes for the twelve weeks endedJune 15, 2021 and twelve weeks endedJune 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 endedJune 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. 27 -------------------------------------------------------------------------------- Desk of Contents Franchise Income Franchise income elevated$1.1 million , or 24.0%, for the twelve weeks endedJune 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 endedJune 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 endedJune 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 endedJune 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 endedJune 15, 2021 in comparison with 26.9% for the twelve weeks endedJune 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 endedJune 15, 2021 , primarily attributable to a rise in firm restaurant gross sales and aCalifornia minimal wage enhance onJanuary 1, 2021 . As a proportion of firm restaurant gross sales, labor and associated bills had been 32.9% for the twelve weeks endedJune 15, 2021 in comparison with 33.2% for the twelve weeks endedJune 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 elevatedCalifornia 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 endedJune 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 endedJune 15, 2021 in comparison with 23.5% for the twelve weeks endedJune 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 endedJune 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 endedJune 15, 2021 in comparison with 9.0% for the twelve weeks endedJune 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 endedJune 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. 28 -------------------------------------------------------------------------------- Desk of Contents Depreciation and Amortization Depreciation and amortization bills had been$6.0 million and$6.3 million for the twelve weeks endedJune 15, 2021 andJune 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 endedJune 15, 2021 in comparison with 6.0% for the twelve weeks endedJune 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 endedJune 15, 2021 andJune 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 endedJune 15, 2021 andJune 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 endedJune 15, 2021 andJune 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 endedJune 15, 2021 andJune 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 endedJune 15, 2021 andJune 16, 2020 , respectively. The lower is primarily attributable to decrease common excellent balances and decrease weighted common rates of interest through the twelve weeks endedJune 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 endedJune 15, 2021 and 123.8% for the twelve weeks endedJune 16, 2020 . The supply for revenue taxes was$2.5 million for the twelve weeks endedJune 15, 2021 and$3.0 million for the twelve weeks endedJune 16, 2020 . The revenue tax expense for the twelve weeks endedJune 15, 2021 is pushed by our estimated annual efficient revenue tax charge which primarily consists of statutory federal and state tax charges primarily based on apportioned revenue and the impression of non-tax deductible compensation to executives, partially offset by federal focused job credit. The revenue tax expense for the twelve weeks endedJune 16, 2020 is pushed by our estimated efficient revenue tax charge which primarily consists of statutory federal and state tax charges primarily based on estimated apportioned revenue for fiscal 12 months 2020 and the impression of non-tax deductible compensation to executives, partially offset by federal focused job credit. 29 -------------------------------------------------------------------------------- Desk of Contents Outcomes of Operations Comparability of Outcomes of Operations for the Twenty-4 Weeks EndedJune 15, 2021 and Twenty-4 Weeks EndedJune 16, 2020 The next desk presents working outcomes for the twenty-four weeks endedJune 15, 2021 and twenty-four weeks endedJune 16, 2020 , in absolute phrases and expressed as a proportion of whole income (or firm restaurant gross sales), as in contrast beneath: 24 Weeks Ended June 15, 2021 June 16, 2020 Enhance / (Lower) (Greenback quantities in 1000's) ($) (%) ($) (%) ($) (%) 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 30 -------------------------------------------------------------------------------- Desk of Contents Firm Restaurant Gross sales Firm restaurant gross sales elevated$21.0 million , or 10.7%, for the twenty-four weeks endedJune 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 endedJune 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 endedJune 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 endedJune 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 endedJune 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 endedJune 15, 2021 in comparison with 27.6% for the twenty-four weeks endedJune 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 endedJune 15, 2021 , primarily attributable to a rise in firm restaurant gross sales and aCalifornia minimal wage enhance onJanuary 1, 2021 . As a proportion of firm restaurant gross sales, labor and associated bills had been 33.6% for the twenty-four weeks endedJune 15, 2021 in comparison with 34.0% for the twenty-four weeks endedJune 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 elevatedCalifornia 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 endedJune 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 endedJune 15, 2021 in comparison with 23.9% for the twenty-four weeks endedJune 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 endedJune 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 endedJune 15, 2021 in comparison with 9.0% for the twenty-four weeks endedJune 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. 31 -------------------------------------------------------------------------------- Desk of Contents Franchise Promoting Bills Franchise promoting bills elevated$2.0 million , or 33.7%, for the twenty-four weeks endedJune 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 endedJune 15, 2021 andJune 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 endedJune 15, 2021 in comparison with 5.8% for the twenty-four weeks endedJune 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 endedJune 15, 2021 andJune 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 endedJune 15, 2021 andJune 16, 2020 attributable to an identical degree of pre-opening exercise in comparison with the prior 12 months. Impairment ofGoodwill No impairment costs had been recorded through the twenty-four weeks endedJune 15, 2021 . The Firm recorded a non-cash impairment cost of$87.3 million throughout the twenty-four weeks endedJune 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 endedJune 15, 2021 . The Firm recorded a non-cash impairment cost of$11.9 million throughout the twenty-four weeks endedJune 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 endedJune 15, 2021 . The Firm recorded a non-cash impairment cost of$8.3 million throughout the twenty-four weeks endedJune 16, 2020 associated to the analysis of long-lived belongings underlying eight eating places inCalifornia ,Nevada andGeorgia 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 endedJune 15, 2021 andJune 16, 2020 , respectively. The lower was attributable to decrease hire and property tax expense associated to beforehand closed eating places. 32 -------------------------------------------------------------------------------- Desk of Contents 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 endedJune 15, 2021 andJune 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 endedJune 15, 2021 andJune 16, 2020 , respectively. The lower is primarily attributable to decrease common excellent balances and decrease weighted common curiosity charges through the twenty-four weeks endedJune 15, 2021 in comparison with the prior 12 months. Different Earnings Different revenue was$0.4 million for the twenty-four weeks endedJune 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 endedJune 16, 2020 . Provision (Profit) for Earnings Taxes The efficient revenue tax charges had been 29.1% for the twenty-four weeks endedJune 15, 2021 and a couple of.8% for the twenty-four weeks endedJune 16, 2020 . The provision (profit) for revenue taxes consisted of revenue tax expense of$3.5 million for the twenty-four weeks endedJune 15, 2021 and revenue tax good thing about$3.0 million for the twenty-four weeks endedJune 16, 2020 . The revenue tax expense for the twenty-four weeks endedJune 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 endedJune 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$126.6 million atJune 15, 2021 , might be adequate to fulfill ongoing debt service necessities, working lease obligations, capital expenditures, working capital necessities and different wants for a minimum of the following 12 months. As well as, share repurchases and our quarterly money dividend might impression our accessible capital assets. Ought to our enterprise take longer to get better from the COVID-19 pandemic than we at present anticipate, there are actions we will take to preserve liquidity. Abstract of Money Flows Our main sources of liquidity and capital assets have been money offered from operations, money and money equivalents, and our senior secured credit score amenities. Our main necessities for liquidity and capital are new eating places, present restaurant capital investments (primarily upkeep), investments in infrastructure and knowledge know-how, curiosity funds on debt, lease obligations, revenue tax funds, purchases below our share repurchase program, dividend funds, working capital and basic company wants. The working capital necessities usually are not vital since clients pay for his or her purchases in money or by fee card (credit score or debit) on the time of sale. Thus, we're capable of promote many stock objects earlier than we've to pay suppliers for such objects since we usually have fee phrases for our meals and paper suppliers. Our company-operated eating places don't require vital inventories. 33
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Desk of Contents The next desk presents abstract info on money flows for the durations indicated (in 1000’s).
24 Weeks Ended June 15, 2021 June 16, 2020 Web money offered by (utilized in) Working actions$ 21,268 $ 21,461 Investing actions (11,306) (11,917) Financing actions (11,294) (216)
Web enhance (lower) in money
Money Flows Supplied by Working Actions In the course of the twenty-four weeks endedJune 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 endedJune 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 endedJune 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 endedJune 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 endedJune 15, 2021 . In the course of the twenty-four weeks endedJune 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 endedJune 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 endedJune 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 endedJune 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 endedJune 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. 34 -------------------------------------------------------------------------------- Desk of Contents 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 onSeptember 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 ofJune 15, 2021 . As ofJune 15, 2021 , the weighted-average rate of interest on the excellent steadiness of the Senior Credit score Facility was 1.86%. As ofJune 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 atJune 15, 2021 was$126.6 million . Inventory Repurchase Program InFebruary 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. OnAugust 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 efficientJuly 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 endedJune 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 endedJune 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 ofJune 15, 2021 , there was roughly$15.0 million remaining below the share repurchase program. All the Firm's excellent warrants expired onJune 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 inTexas . 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 EndedJune 15, 2021
Firm restaurant sale
$ 113,004 $
95,261
Restaurant working bills
91,616 79,640 178,618 167,279 Restaurant contribution$ 21,388 $
15 621
Contribution margin of the restaurant
18.9 % 16.4 % 17.5 % 14.5 % 35
-------------------------------------------------------------------------------- Desk of Contents A reconciliation of revenue (loss) from operations to restaurant contribution is offered beneath (in 1000's): 12 Weeks Ended 24 Weeks EndedJune 15, 2021
Working revenue (loss)
$ 9,211 $
3,706
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
Firm restaurant sale
$ 113,004 $
95,261
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)
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 36
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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. 37
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