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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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46-3340980
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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25521 Commercentre Drive
Lake Forest, California
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92630
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(Address of principal executive offices)
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(Zip Code)
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(949) 462-9300
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||
(Registrant’s telephone number, including area code)
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Large accelerated filer
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¨
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Accelerated filer
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x
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Non-accelerated filer
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¨
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(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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PART I. FINANCIAL INFORMATION
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PART II. OTHER INFORMATION
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Del Taco Restaurants, Inc.
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||||||||
Consolidated Balance Sheets
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||||||||
(In thousands, except share and per share data)
|
||||||||
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||||||||
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Successor
|
||||||
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June 14, 2016
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December 29, 2015
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||||
Assets
|
|
(Unaudited)
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
7,298
|
|
|
$
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10,194
|
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Accounts and other receivables, net
|
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2,361
|
|
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3,220
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|
||
Inventories
|
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2,427
|
|
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2,806
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|
||
Prepaid expenses and other current assets
|
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3,174
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3,545
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||
Total current assets
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15,260
|
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19,765
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||
Property and equipment, net
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119,459
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114,030
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Goodwill
|
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319,056
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318,275
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||
Trademarks
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220,300
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220,300
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Intangible assets, net
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26,692
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28,373
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||
Other assets, net
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3,050
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2,829
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||
Total assets
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$
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703,817
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$
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703,572
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Liabilities and shareholders’ equity
|
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||||
Current liabilities:
|
|
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||||
Accounts payable
|
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$
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17,266
|
|
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$
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16,831
|
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Other accrued liabilities
|
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29,319
|
|
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32,897
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||
Current portion of capital lease obligations and deemed landlord financing liabilities
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1,667
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|
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1,725
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||
Total current liabilities
|
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48,252
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51,453
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||
Long-term debt, capital lease obligations and deemed landlord financing liabilities, excluding current portion, net
|
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167,387
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167,968
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Deferred income taxes
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83,355
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79,523
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|
||
Other non-current liabilities
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33,835
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36,251
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||
Total liabilities
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332,829
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335,195
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||
Commitments and contingencies (
Note 14
)
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||||
Shareholders’ equity:
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||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; no shares issued and outstanding
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—
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—
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||
Common stock, $0.0001 par value; 400,000,000 shares authorized; 38,173,443 shares issued and outstanding at June 14, 2016; 38,802,425 shares issued and outstanding at December 29, 2015
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4
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4
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|
||
Additional paid-in capital
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366,946
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372,260
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Retained earnings (accumulated deficit)
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4,038
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(3,887
|
)
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Total shareholders’ equity
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370,988
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368,377
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Total liabilities and shareholders’ equity
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$
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703,817
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$
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703,572
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Del Taco Restaurants, Inc.
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|||||||||
Consolidated Statements of Comprehensive Income
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|||||||||
(Unaudited)
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|||||||||
(In thousands, except share and per share data)
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|||||||||
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|||||||||
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Successor
|
|
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Predecessor
|
||||
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12 Weeks Ended
June 14, 2016 |
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12 Weeks Ended
June 16, 2015 |
||||
Revenue:
|
|
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||||
Company restaurant sales
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$
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95,917
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$
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93,902
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Franchise revenue
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3,576
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|
|
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3,147
|
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Franchise sublease income
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533
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|
|
554
|
|
||
Total revenue
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100,026
|
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97,603
|
|
||
Operating expenses:
|
|
|
|
|
|
||||
Restaurant operating expenses:
|
|
|
|
|
|
||||
Food and paper costs
|
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26,358
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26,859
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Labor and related expenses
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30,249
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28,486
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|
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Occupancy and other operating expenses
|
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19,526
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19,924
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General and administrative
|
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8,214
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6,550
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|
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Depreciation and amortization
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5,532
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3,796
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Occupancy and other - franchise subleases
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510
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517
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Pre-opening costs
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35
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129
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|
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Restaurant closure charges, net
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(166
|
)
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72
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|
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Loss on disposal of assets
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62
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14
|
|
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Total operating expenses
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90,320
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86,347
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|
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Income from operations
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9,706
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|
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11,256
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|
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Other expenses:
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|
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|
||||
Interest expense
|
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1,405
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|
|
|
4,018
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|
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Transaction-related costs
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126
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|
877
|
|
||
Debt modification costs
|
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—
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2
|
|
||
Total other expenses
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1,531
|
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4,897
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|
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Income from operations before provision for income taxes
|
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8,175
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|
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6,359
|
|
||
Provision for income taxes
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3,311
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|
|
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1,731
|
|
||
Net income
|
|
4,864
|
|
|
|
4,628
|
|
||
Other comprehensive income (loss):
|
|
|
|
|
|
||||
Change in fair value of interest rate cap
|
|
—
|
|
|
|
(2
|
)
|
||
Reclassification of interest rate cap amortization included in net income
|
|
—
|
|
|
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36
|
|
||
Total other comprehensive income, net
|
|
—
|
|
|
|
34
|
|
||
Comprehensive income
|
|
$
|
4,864
|
|
|
|
$
|
4,662
|
|
Earnings per share:
|
|
|
|
|
|
||||
Basic
|
|
$
|
0.13
|
|
|
|
$
|
0.69
|
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Diluted
|
|
$
|
0.13
|
|
|
|
$
|
0.69
|
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Weighted-average shares outstanding
|
|
|
|
|
|
||||
Basic
|
|
38,292,215
|
|
|
|
6,707,776
|
|
||
Diluted
|
|
38,442,304
|
|
|
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6,707,776
|
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Del Taco Restaurants, Inc.
|
|||||||||
Consolidated Statements of Comprehensive Income (Loss)
|
|||||||||
(Unaudited)
|
|||||||||
(In thousands, except share and per share data)
|
|||||||||
|
|||||||||
|
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Successor
|
|
|
Predecessor
|
||||
|
|
24 Weeks Ended
June 14, 2016 |
|
|
24 Weeks Ended
June 16, 2015 |
||||
Revenue:
|
|
|
|
|
|
||||
Company restaurant sales
|
|
$
|
189,467
|
|
|
|
$
|
184,785
|
|
Franchise revenue
|
|
6,905
|
|
|
|
6,148
|
|
||
Franchise sublease income
|
|
1,057
|
|
|
|
1,088
|
|
||
Total revenue
|
|
197,429
|
|
|
|
192,021
|
|
||
Operating expenses:
|
|
|
|
|
|
||||
Restaurant operating expenses:
|
|
|
|
|
|
||||
Food and paper costs
|
|
52,487
|
|
|
|
52,841
|
|
||
Labor and related expenses
|
|
60,033
|
|
|
|
56,409
|
|
||
Occupancy and other operating expenses
|
|
39,649
|
|
|
|
39,958
|
|
||
General and administrative
|
|
16,506
|
|
|
|
13,846
|
|
||
Depreciation and amortization
|
|
11,018
|
|
|
|
7,588
|
|
||
Occupancy and other - franchise subleases
|
|
1,013
|
|
|
|
1,022
|
|
||
Pre-opening costs
|
|
128
|
|
|
|
248
|
|
||
Restaurant closure charges, net
|
|
12
|
|
|
|
94
|
|
||
Loss on disposal of assets
|
|
137
|
|
|
|
14
|
|
||
Total operating expenses
|
|
180,983
|
|
|
|
172,020
|
|
||
Income from operations
|
|
16,446
|
|
|
|
20,001
|
|
||
Other expenses:
|
|
|
|
|
|
||||
Interest expense
|
|
2,877
|
|
|
|
10,829
|
|
||
Transaction-related costs
|
|
191
|
|
|
|
7,193
|
|
||
Debt modification costs
|
|
—
|
|
|
|
137
|
|
||
Change in fair value of warrant liability
|
|
—
|
|
|
|
(35
|
)
|
||
Total other expenses
|
|
3,068
|
|
|
|
18,124
|
|
||
Income from operations before provision for income taxes
|
|
13,378
|
|
|
|
1,877
|
|
||
Provision for income taxes
|
|
5,453
|
|
|
|
2,189
|
|
||
Net income (loss)
|
|
7,925
|
|
|
|
(312
|
)
|
||
Other comprehensive income (loss):
|
|
|
|
|
|
||||
Change in fair value of interest rate cap
|
|
—
|
|
|
|
(23
|
)
|
||
Reclassification of interest rate cap amortization included in net income (loss)
|
|
—
|
|
|
|
58
|
|
||
Total other comprehensive income, net
|
|
—
|
|
|
|
35
|
|
||
Comprehensive income (loss)
|
|
$
|
7,925
|
|
|
|
$
|
(277
|
)
|
Earnings (loss) per share:
|
|
|
|
|
|
||||
Basic
|
|
$
|
0.21
|
|
|
|
$
|
(0.06
|
)
|
Diluted
|
|
$
|
0.20
|
|
|
|
$
|
(0.06
|
)
|
Weighted-average shares outstanding
|
|
|
|
|
|
||||
Basic
|
|
38,545,115
|
|
|
|
5,391,137
|
|
||
Diluted
|
|
38,672,425
|
|
|
|
5,391,137
|
|
Del Taco Restaurants, Inc.
|
|||||||||
Consolidated Statements of Cash Flows
|
|||||||||
(Unaudited)
|
|||||||||
(In thousands)
|
|||||||||
|
|
|
|
|
|
||||
|
|
Successor
|
|
|
Predecessor
|
||||
|
|
24 Weeks Ended
June 14, 2016 |
|
|
24 Weeks Ended
June 16, 2015 |
||||
Operating activities
|
|
|
|
|
|
||||
Net income (loss)
|
|
$
|
7,925
|
|
|
|
$
|
(312
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||
Depreciation and amortization
|
|
11,018
|
|
|
|
7,590
|
|
||
Amortization of favorable and unfavorable lease assets and liabilities, net
|
|
(280
|
)
|
|
|
(2
|
)
|
||
Amortization of deferred financing costs
|
|
178
|
|
|
|
835
|
|
||
Subordinated note interest paid-in-kind
|
|
—
|
|
|
|
37
|
|
||
Debt modification costs
|
|
—
|
|
|
|
137
|
|
||
Stock-based compensation
|
|
1,629
|
|
|
|
532
|
|
||
Change in fair value of warrant liability
|
|
—
|
|
|
|
(35
|
)
|
||
Deferred income taxes
|
|
3,052
|
|
|
|
—
|
|
||
Loss on disposal of assets
|
|
137
|
|
|
|
14
|
|
||
Restaurant closure charges
|
|
(137
|
)
|
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||
Accounts and other receivables, net
|
|
859
|
|
|
|
961
|
|
||
Inventories
|
|
379
|
|
|
|
93
|
|
||
Prepaid expenses and other current assets
|
|
371
|
|
|
|
571
|
|
||
Accounts payable
|
|
435
|
|
|
|
2,358
|
|
||
Other accrued liabilities
|
|
(3,609
|
)
|
|
|
(95
|
)
|
||
Other non-current liabilities
|
|
(904
|
)
|
|
|
(1,822
|
)
|
||
Net cash provided by operating activities
|
|
21,053
|
|
|
|
10,862
|
|
||
Investing activities
|
|
|
|
|
|
||||
Purchases of property and equipment
|
|
(15,546
|
)
|
|
|
(13,357
|
)
|
||
Proceeds from disposal of property and equipment
|
|
4
|
|
|
|
38
|
|
||
Purchases of other assets
|
|
(647
|
)
|
|
|
(472
|
)
|
||
Net cash used in investing activities
|
|
(16,189
|
)
|
|
|
(13,791
|
)
|
||
Financing activities
|
|
|
|
|
|
||||
Proceeds from term loan, net of debt discount
|
|
—
|
|
|
|
23,654
|
|
||
Proceeds from issuance of common stock
|
|
—
|
|
|
|
91,236
|
|
||
Repurchase of common stock and warrants
|
|
(6,943
|
)
|
|
|
—
|
|
||
Payment of tax withholding related to option exercises and distribution of restricted stock units
|
|
—
|
|
|
|
(7,533
|
)
|
||
Payments on capital leases and deemed landlord financing
|
|
(817
|
)
|
|
|
(768
|
)
|
||
Payment on subordinated notes
|
|
—
|
|
|
|
(108,113
|
)
|
||
Proceeds from revolving credit facility
|
|
4,000
|
|
|
|
10,000
|
|
||
Payments on revolving credit facility
|
|
(4,000
|
)
|
|
|
(6,000
|
)
|
||
Payments for debt issue costs
|
|
—
|
|
|
|
(591
|
)
|
||
Net cash (used in) provided by financing activities
|
|
(7,760
|
)
|
|
|
1,885
|
|
||
Decrease in cash and cash equivalents
|
|
(2,896
|
)
|
|
|
(1,044
|
)
|
||
Cash and cash equivalents at beginning of period
|
|
10,194
|
|
|
|
8,553
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
7,298
|
|
|
|
$
|
7,509
|
|
Supplemental cash flow information:
|
|
|
|
|
|
||||
Cash paid during the period for interest
|
|
$
|
2,872
|
|
|
|
$
|
8,953
|
|
Cash paid during the period for income taxes
|
|
800
|
|
|
|
8
|
|
||
Supplemental schedule of non-cash activities:
|
|
|
|
|
|
||||
Accrued property and equipment purchases
|
|
$
|
1,939
|
|
|
|
$
|
996
|
|
Write-offs of accounts receivables
|
|
72
|
|
|
|
—
|
|
||
Amortization of interest rate cap into net loss, net of tax
|
|
—
|
|
|
|
58
|
|
||
Change in other asset for fair value of interest rate cap recorded to other comprehensive loss, net
|
|
—
|
|
|
|
(23
|
)
|
||
Warrant liability reclassified to equity upon exercise of warrants
|
|
—
|
|
|
|
8,274
|
|
|
Purchase Price
Allocation
|
||
Cash and cash equivalents
|
$
|
5,173
|
|
Accounts receivable and other receivables
|
3,228
|
|
|
Inventories
|
2,541
|
|
|
Prepaid expenses and other current assets
|
4,266
|
|
|
Total current assets
|
15,208
|
|
|
Property and equipment
|
105,524
|
|
|
Intangible assets
|
250,490
|
|
|
Other assets
|
4,194
|
|
|
Total identifiable assets acquired
|
375,416
|
|
|
Accounts payable
|
(18,866
|
)
|
|
Other accrued liabilities
|
(26,607
|
)
|
|
Current portion of capital lease obligations and deemed landlord financing liabilities
|
(1,670
|
)
|
|
Long-term debt, capital lease obligations and deemed landlord financing liabilities
|
(246,562
|
)
|
|
Deferred income taxes
|
(80,254
|
)
|
|
Other long-term liabilities
|
(36,208
|
)
|
|
Net identifiable liabilities assumed
|
(34,751
|
)
|
|
Goodwill
|
319,056
|
|
|
Total gross consideration
|
$
|
284,305
|
|
|
|
Total
|
||
Balance at December 29, 2015 (Successor)
|
|
$
|
1,023
|
|
Charges for accretion in current period
|
|
39
|
|
|
Cash payments
|
|
(37
|
)
|
|
Balance at June 14, 2016 (Successor)
|
|
$
|
1,025
|
|
|
|
Contract termination costs
|
|
Other associated costs
|
|
Total
|
||||||
Balance at December 29, 2015 (Successor)
|
|
$
|
3,637
|
|
|
$
|
163
|
|
|
$
|
3,800
|
|
Charges for accretion in current period
|
|
67
|
|
|
—
|
|
|
67
|
|
|||
Cash payments
|
|
(800
|
)
|
|
(163
|
)
|
|
(963
|
)
|
|||
Adjustments to estimates based on current activity
|
|
(273
|
)
|
|
—
|
|
|
(273
|
)
|
|||
Balance at June 14, 2016 (Successor)
|
|
$
|
2,631
|
|
|
$
|
—
|
|
|
$
|
2,631
|
|
|
|
Successor
|
||||||||||||||||||||||
|
|
June 14, 2016
|
|
December 29, 2015
|
||||||||||||||||||||
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
Favorable lease assets
|
|
$
|
14,207
|
|
|
$
|
(1,946
|
)
|
|
$
|
12,261
|
|
|
$
|
14,207
|
|
|
$
|
(1,020
|
)
|
|
$
|
13,187
|
|
Franchise rights
|
|
15,789
|
|
|
(1,358
|
)
|
|
14,431
|
|
|
15,897
|
|
|
(711
|
)
|
|
15,186
|
|
||||||
Total amortized other intangible assets
|
|
$
|
29,996
|
|
|
$
|
(3,304
|
)
|
|
$
|
26,692
|
|
|
$
|
30,104
|
|
|
$
|
(1,731
|
)
|
|
$
|
28,373
|
|
|
|
Successor
|
||||||
|
|
June 14, 2016
|
|
December 29, 2015
|
||||
2015 Senior Credit Facility, net of debt discount of $1,195 and $1,328 and deferred financing costs of $403 and $448 at June 14, 2016 (Successor) and December 29, 2015 (Successor), respectively
|
|
$
|
152,402
|
|
|
$
|
152,224
|
|
Total outstanding indebtedness
|
|
152,402
|
|
|
152,224
|
|
||
Obligations under capital leases and deemed landlord financing liabilities
|
|
16,652
|
|
|
17,469
|
|
||
Total debt
|
|
169,054
|
|
|
169,693
|
|
||
Less: amounts due within one year
|
|
1,667
|
|
|
1,725
|
|
||
Total amounts due after one year, net
|
|
$
|
167,387
|
|
|
$
|
167,968
|
|
|
|
Successor
|
||||||||||||||
|
|
June 14, 2016
|
|
December 29, 2015
|
||||||||||||
|
|
Estimated
Fair Value
|
|
Book Value
|
|
Estimated
Fair Value
|
|
Book Value
|
||||||||
2015 Senior Credit Facility
|
|
$
|
152,402
|
|
|
$
|
152,402
|
|
|
$
|
152,224
|
|
|
$
|
152,224
|
|
|
|
Successor
|
||||||
|
|
June 14, 2016
|
|
December 29, 2015
|
||||
Employee compensation and related items
|
|
$
|
7,852
|
|
|
$
|
7,818
|
|
Accrued insurance
|
|
7,003
|
|
|
7,168
|
|
||
Accrued sales tax
|
|
4,448
|
|
|
3,604
|
|
||
Accrued bonus
|
|
1,885
|
|
|
5,352
|
|
||
Accrued income taxes
|
|
1,632
|
|
|
30
|
|
||
Restaurant closure liability
|
|
1,172
|
|
|
1,617
|
|
||
Accrued real property tax
|
|
1,113
|
|
|
1,378
|
|
||
Other
|
|
4,214
|
|
|
5,930
|
|
||
|
|
$
|
29,319
|
|
|
$
|
32,897
|
|
|
|
Successor
|
||||||
|
|
June 14, 2016
|
|
December 29, 2015
|
||||
Unfavorable lease liabilities
|
|
$
|
18,479
|
|
|
$
|
19,685
|
|
Insurance reserves
|
|
6,168
|
|
|
5,963
|
|
||
Restaurant closure liability
|
|
2,484
|
|
|
3,206
|
|
||
Unearned trade discount, non-current
|
|
1,843
|
|
|
2,028
|
|
||
Deferred development and initial franchise fees
|
|
1,720
|
|
|
1,920
|
|
||
Deferred gift card income
|
|
1,484
|
|
|
2,217
|
|
||
Deferred rent liability
|
|
1,136
|
|
|
731
|
|
||
Other
|
|
521
|
|
|
501
|
|
||
|
|
$
|
33,835
|
|
|
$
|
36,251
|
|
|
|
Shares
|
|
Weighted-Average
Grant Date
Fair Value
|
|||
Nonvested at December 29, 2015 (Successor)
|
|
946,494
|
|
|
$
|
11.16
|
|
Granted
|
|
114,004
|
|
|
9.90
|
|
|
Vested
|
|
—
|
|
|
—
|
|
|
Forfeited
|
|
—
|
|
|
—
|
|
|
Nonvested at June 14, 2016 (Successor)
|
|
1,060,498
|
|
|
$
|
11.03
|
|
|
|
Options
|
|
Weighted Average Exercise Price
|
|
Weighted Average Remaining Contractual Term
|
|
Aggregate Intrinsic Value
|
||||||
|
|
|
|
|
|
(in years)
|
|
|
||||||
Options outstanding at December 29, 2015 (Successor)
|
|
224,000
|
|
|
$
|
10.40
|
|
|
6.5
|
|
|
$
|
—
|
|
Granted
|
|
7,000
|
|
|
9.88
|
|
|
6.6
|
|
|
—
|
|
||
Exercised
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Forfeited
|
|
(2,000
|
)
|
|
10.40
|
|
|
—
|
|
|
—
|
|
||
Options outstanding at June 14, 2016 (Successor)
|
|
229,000
|
|
|
$
|
10.38
|
|
|
6.4
|
|
|
$
|
—
|
|
Options exercisable at June 14, 2016 (Successor)
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Options exercisable and expected to vest at June 14, 2016 (Successor)
|
|
207,173
|
|
|
$
|
10.38
|
|
|
6.4
|
|
|
$
|
—
|
|
|
|
Successor
|
|
|
Predecessor
|
||||
|
|
12 Weeks Ended
June 14, 2016 |
|
|
12 Weeks Ended
June 16, 2015 |
||||
Numerator:
|
|
|
|
|
|
||||
Net income
|
|
$
|
4,864
|
|
|
|
$
|
4,628
|
|
Denominator:
|
|
|
|
|
|
||||
Weighted-average shares outstanding - basic
|
|
38,292,215
|
|
|
|
6,707,776
|
|
||
Dilutive effect of unvested restricted stock and RSUs
|
|
150,089
|
|
|
|
—
|
|
||
Dilutive effect of stock options
|
|
—
|
|
|
|
—
|
|
||
Dilutive effect of warrants
|
|
—
|
|
|
|
—
|
|
||
Weighted-average shares outstanding - diluted
|
|
38,442,304
|
|
|
|
6,707,776
|
|
||
Net income per share - basic
|
|
$
|
0.13
|
|
|
|
$
|
0.69
|
|
Net income per share - diluted
|
|
$
|
0.13
|
|
|
|
$
|
0.69
|
|
Antidilutive stock options, unvested restricted stock awards, unvested RSUs and warrants excluded from the computations
|
|
12,720,918
|
|
|
|
—
|
|
||
|
|
|
|
|
|
||||
|
|
Successor
|
|
|
Predecessor
|
||||
|
|
24 Weeks Ended
June 14, 2016 |
|
|
24 Weeks Ended
June 16, 2015 |
||||
Numerator:
|
|
|
|
|
|
||||
Net income (loss)
|
|
$
|
7,925
|
|
|
|
$
|
(312
|
)
|
Denominator:
|
|
|
|
|
|
||||
Weighted-average shares outstanding - basic
|
|
38,545,115
|
|
|
|
5,391,137
|
|
||
Dilutive effect of unvested restricted stock and RSUs
|
|
127,310
|
|
|
|
—
|
|
||
Dilutive effect of stock options
|
|
—
|
|
|
|
—
|
|
||
Dilutive effect of warrants
|
|
—
|
|
|
|
—
|
|
||
Weighted-average shares outstanding - diluted
|
|
38,672,425
|
|
|
|
5,391,137
|
|
||
Net income (loss) per share - basic
|
|
$
|
0.21
|
|
|
|
$
|
(0.06
|
)
|
Net income (loss) per share - diluted
|
|
$
|
0.20
|
|
|
|
$
|
(0.06
|
)
|
Antidilutive stock options, unvested restricted stock awards, unvested RSUs and warrants excluded from the computations
|
|
12,800,021
|
|
|
|
142,009
|
|
|
|
12 Weeks Ended
|
|
24 Weeks Ended
|
||||||||
|
|
June 14, 2016
|
|
June 16, 2015
|
|
June 14, 2016
|
|
June 16, 2015
|
||||
Company-operated restaurant activity:
|
|
|
|
|
|
|
|
|
||||
Beginning of period
|
|
297
|
|
|
304
|
|
|
297
|
|
|
304
|
|
Openings
|
|
1
|
|
|
2
|
|
|
2
|
|
|
2
|
|
Closures
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
Restaurants at end of period
|
|
298
|
|
|
306
|
|
|
298
|
|
|
306
|
|
Franchised restaurant activity:
|
|
|
|
|
|
|
|
|
||||
Beginning of period
|
|
246
|
|
|
242
|
|
|
247
|
|
|
243
|
|
Openings
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
Closures
|
|
(1
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
(2
|
)
|
Restaurants at end of period
|
|
245
|
|
|
241
|
|
|
245
|
|
|
241
|
|
Total restaurant activity:
|
|
|
|
|
|
|
|
|
||||
Beginning of period
|
|
543
|
|
|
546
|
|
|
544
|
|
|
547
|
|
Openings
|
|
1
|
|
|
2
|
|
|
3
|
|
|
2
|
|
Closures
|
|
(1
|
)
|
|
(1
|
)
|
|
(4
|
)
|
|
(2
|
)
|
Restaurants at end of period
|
|
543
|
|
|
547
|
|
|
543
|
|
|
547
|
|
|
|
Successor
|
|
|
Predecessor
|
||||
|
|
12 Weeks Ended
June 14, 2016 |
|
|
12 Weeks Ended
June 16, 2015 |
||||
Company restaurant sales
|
|
$
|
95,917
|
|
|
|
$
|
93,902
|
|
Restaurant operating expenses
|
|
76,133
|
|
|
|
75,269
|
|
||
Restaurant contribution
|
|
$
|
19,784
|
|
|
|
$
|
18,633
|
|
Restaurant contribution margin
|
|
20.6
|
%
|
|
|
19.8
|
%
|
||
|
|
|
|
|
|
||||
|
|
Successor
|
|
|
Predecessor
|
||||
|
|
24 Weeks Ended
June 14, 2016 |
|
|
24 Weeks Ended
June 16, 2015 |
||||
Company restaurant sales
|
|
$
|
189,467
|
|
|
|
$
|
184,785
|
|
Restaurant operating expenses
|
|
152,169
|
|
|
|
149,208
|
|
||
Restaurant contribution
|
|
$
|
37,298
|
|
|
|
$
|
35,577
|
|
Restaurant contribution margin
|
|
19.7
|
%
|
|
|
19.3
|
%
|
(i)
|
they do not reflect cash expenditures, or future requirements for capital expenditures or contractual commitments;
|
(ii)
|
they do not reflect changes in, or cash requirements for, working capital needs;
|
(iii)
|
they do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debt;
|
(iv)
|
although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements;
|
(v)
|
they do not adjust for all non-cash income or expense items that are reflected in the statements of cash flows;
|
(vi)
|
they do not reflect the impact of earnings or charges resulting from matters Del Taco considers not to be indicative of ongoing operations; and
|
(vii)
|
other companies in the industry may calculate these measures differently than Del Taco does, limiting their usefulness as comparative measures.
|
|
|
Successor
|
|
|
Predecessor
|
||||
|
|
12 Weeks Ended
June 14, 2016 |
|
|
12 Weeks Ended
June 16, 2015 |
||||
Net income
|
|
$
|
4,864
|
|
|
|
$
|
4,628
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
||||
Provision for income taxes
|
|
3,311
|
|
|
|
1,731
|
|
||
Interest expense
|
|
1,405
|
|
|
|
4,018
|
|
||
Depreciation and amortization
|
|
5,532
|
|
|
|
3,797
|
|
||
EBITDA
|
|
15,112
|
|
|
|
14,174
|
|
||
Stock-based compensation expense (a)
|
|
930
|
|
|
|
—
|
|
||
Loss on disposal of assets (b)
|
|
62
|
|
|
|
14
|
|
||
Restaurant closure charges, net (c)
|
|
(166
|
)
|
|
|
72
|
|
||
Amortization of favorable and unfavorable lease assets and liabilities, net (d)
|
|
(140
|
)
|
|
|
(1
|
)
|
||
Debt modification costs (e)
|
|
—
|
|
|
|
2
|
|
||
Transaction-related costs (f)
|
|
126
|
|
|
|
877
|
|
||
Pre-opening costs (h)
|
|
35
|
|
|
|
129
|
|
||
Adjusted EBITDA
|
|
$
|
15,959
|
|
|
|
$
|
15,267
|
|
|
|
|
|
|
|
||||
|
|
Successor
|
|
|
Predecessor
|
||||
|
|
24 Weeks Ended
June 14, 2016 |
|
|
24 Weeks Ended
June 16, 2015 |
||||
Net income (loss)
|
|
$
|
7,925
|
|
|
|
$
|
(312
|
)
|
Non-GAAP adjustments:
|
|
|
|
|
|
||||
Provision for income taxes
|
|
5,453
|
|
|
|
2,189
|
|
||
Interest expense
|
|
2,877
|
|
|
|
10,829
|
|
||
Depreciation and amortization
|
|
11,018
|
|
|
|
7,590
|
|
||
EBITDA
|
|
27,273
|
|
|
|
20,296
|
|
||
Stock-based compensation expense (a)
|
|
1,629
|
|
|
|
532
|
|
||
Loss on disposal of assets (b)
|
|
137
|
|
|
|
14
|
|
||
Restaurant closure charges, net (c)
|
|
12
|
|
|
|
94
|
|
||
Amortization of favorable and unfavorable lease assets and liabilities, net (d)
|
|
(280
|
)
|
|
|
(2
|
)
|
||
Debt modification costs (e)
|
|
—
|
|
|
|
137
|
|
||
Transaction-related costs (f)
|
|
191
|
|
|
|
7,193
|
|
||
Change in fair value of warrant liability (g)
|
|
—
|
|
|
|
(35
|
)
|
||
Pre-opening costs (h)
|
|
128
|
|
|
|
248
|
|
||
Adjusted EBITDA
|
|
$
|
29,090
|
|
|
|
$
|
28,477
|
|
(a)
|
Includes non-cash, stock-based compensation.
|
(b)
|
Loss on disposal of assets includes the loss on disposal of assets related to retirements and replacement or write-off of leasehold improvements or equipment.
|
(c)
|
Includes costs related to future obligations associated with the closure or net sublease shortfall of a restaurant.
|
(d)
|
Includes amortization of favorable lease assets and unfavorable lease liabilities.
|
(e)
|
Includes costs associated with debt refinancing transaction in March 2015.
|
(f)
|
Includes costs related to the strategic sale process which commenced during 2014 and resulted in the Stock Purchase Agreement with the Levy Newco Parties and the Business Combination consummated pursuant to the Merger Agreement.
|
(g)
|
Relates to fair value adjustments to the warrants to purchase shares of common stock of DTH that had been issued to certain of DTH’s equity shareholders, all of which were exchanged for shares of common stock of DTH on March 20, 2015.
|
(h)
|
Pre-opening costs consist of costs directly associated with the opening of new restaurants and incurred prior to opening, including restaurant labor, supplies, rent expense and other related pre-opening costs. These are generally incurred over the three to five months prior to opening.
|
|
|
Successor
|
|
|
Predecessor
|
|
|
|||||||||||||||
|
|
12 Weeks Ended
June 14, 2016 |
|
|
12 Weeks Ended
June 16, 2015 |
|
Increase /
(Decrease)
|
|||||||||||||||
(Dollar amounts in thousands)
|
|
($)
|
|
(%)
|
|
|
($)
|
|
(%)
|
|
($)
|
|
(%)
|
|||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Company restaurant sales
|
|
$
|
95,917
|
|
|
95.9
|
%
|
|
|
$
|
93,902
|
|
|
96.2
|
%
|
|
$
|
2,015
|
|
|
2.1
|
%
|
Franchise revenue
|
|
3,576
|
|
|
3.6
|
|
|
|
3,147
|
|
|
3.2
|
|
|
429
|
|
|
13.6
|
|
|||
Franchise sublease income
|
|
533
|
|
|
0.5
|
|
|
|
554
|
|
|
0.6
|
|
|
(21
|
)
|
|
(3.8
|
)
|
|||
Total Revenue
|
|
100,026
|
|
|
100.0
|
|
|
|
97,603
|
|
|
100.0
|
|
|
2,423
|
|
|
2.5
|
|
|||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Restaurant operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Food and paper costs
|
|
26,358
|
|
|
27.5
|
|
(1)
|
|
26,859
|
|
|
28.6
|
|
(1)
|
(501
|
)
|
|
(1.9
|
)
|
|||
Labor and related expenses
|
|
30,249
|
|
|
31.5
|
|
(1)
|
|
28,486
|
|
|
30.3
|
|
(1)
|
1,763
|
|
|
6.2
|
|
|||
Occupancy and other operating expenses
|
|
19,526
|
|
|
20.4
|
|
(1)
|
|
19,924
|
|
|
21.2
|
|
(1)
|
(398
|
)
|
|
(2.0
|
)
|
|||
Total restaurant operating expenses
|
|
76,133
|
|
|
79.4
|
|
(1)
|
|
75,269
|
|
|
80.2
|
|
(1)
|
864
|
|
|
1.1
|
|
|||
General and administrative
|
|
8,214
|
|
|
8.2
|
|
|
|
6,550
|
|
|
6.7
|
|
|
1,664
|
|
|
25.4
|
|
|||
Depreciation and amortization
|
|
5,532
|
|
|
5.5
|
|
|
|
3,796
|
|
|
3.9
|
|
|
1,736
|
|
|
45.7
|
|
|||
Occupancy and other-franchise subleases
|
|
510
|
|
|
0.5
|
|
|
|
517
|
|
|
0.5
|
|
|
(7
|
)
|
|
(1.4
|
)
|
|||
Pre-opening costs
|
|
35
|
|
|
*
|
|
|
|
129
|
|
|
0.1
|
|
|
(94
|
)
|
|
(72.9
|
)
|
|||
Restaurant closure charges, net
|
|
(166
|
)
|
|
(0.2
|
)
|
|
|
72
|
|
|
0.1
|
|
|
(238
|
)
|
|
*
|
|
|||
Loss on disposal of assets
|
|
62
|
|
|
0.1
|
|
|
|
14
|
|
|
*
|
|
|
48
|
|
|
*
|
|
|||
Total operating expenses
|
|
90,320
|
|
|
90.3
|
|
|
|
86,347
|
|
|
88.5
|
|
|
3,973
|
|
|
4.6
|
|
|||
Income from operations
|
|
9,706
|
|
|
9.7
|
|
|
|
11,256
|
|
|
11.5
|
|
|
(1,550
|
)
|
|
(13.8
|
)
|
|||
Other expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest expense
|
|
1,405
|
|
|
1.4
|
|
|
|
4,018
|
|
|
4.1
|
|
|
(2,613
|
)
|
|
(65.0
|
)
|
|||
Transaction-related costs
|
|
126
|
|
|
0.1
|
|
|
|
877
|
|
|
0.9
|
|
|
(751
|
)
|
|
(85.6
|
)
|
|||
Debt modification costs
|
|
—
|
|
|
—
|
|
|
|
2
|
|
|
*
|
|
|
(2
|
)
|
|
(100.0
|
)
|
|||
Total other expenses
|
|
1,531
|
|
|
1.5
|
|
|
|
4,897
|
|
|
5.0
|
|
|
(3,366
|
)
|
|
(68.7
|
)
|
|||
Income from operations before provision for income taxes
|
|
8,175
|
|
|
8.2
|
|
|
|
6,359
|
|
|
6.5
|
|
|
1,816
|
|
|
28.6
|
|
|||
Provision for income taxes
|
|
3,311
|
|
|
3.3
|
|
|
|
1,731
|
|
|
1.8
|
|
|
1,580
|
|
|
91.3
|
|
|||
Net income
|
|
$
|
4,864
|
|
|
4.9
|
%
|
|
|
$
|
4,628
|
|
|
4.7
|
%
|
|
$
|
236
|
|
|
5.1
|
%
|
(1)
|
As a percentage of company restaurant sales.
|
*
|
Immaterial/not meaningful
|
|
|
Successor
|
|
|
Predecessor
|
|
|
|||||||||||||||
|
|
24 Weeks Ended
June 14, 2016 |
|
|
24 Weeks Ended
June 16, 2015 |
|
Increase /
(Decrease)
|
|||||||||||||||
(Dollar amounts in thousands)
|
|
($)
|
|
(%)
|
|
|
($)
|
|
(%)
|
|
($)
|
|
(%)
|
|||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Company restaurant sales
|
|
$
|
189,467
|
|
|
96.0
|
%
|
|
|
$
|
184,785
|
|
|
96.2
|
%
|
|
$
|
4,682
|
|
|
2.5
|
%
|
Franchise revenue
|
|
6,905
|
|
|
3.5
|
|
|
|
6,148
|
|
|
3.2
|
|
|
757
|
|
|
12.3
|
|
|||
Franchise sublease income
|
|
1,057
|
|
|
0.5
|
|
|
|
1,088
|
|
|
0.6
|
|
|
(31
|
)
|
|
(2.8
|
)
|
|||
Total Revenue
|
|
197,429
|
|
|
100.0
|
|
|
|
192,021
|
|
|
100.0
|
|
|
5,408
|
|
|
2.8
|
|
|||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Restaurant operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Food and paper costs
|
|
52,487
|
|
|
27.7
|
|
(1)
|
|
52,841
|
|
|
28.6
|
|
(1)
|
(354
|
)
|
|
(0.7
|
)
|
|||
Labor and related expenses
|
|
60,033
|
|
|
31.7
|
|
(1)
|
|
56,409
|
|
|
30.5
|
|
(1)
|
3,624
|
|
|
6.4
|
|
|||
Occupancy and other operating expenses
|
|
39,649
|
|
|
20.9
|
|
(1)
|
|
39,958
|
|
|
21.6
|
|
(1)
|
(309
|
)
|
|
(0.8
|
)
|
|||
Total restaurant operating expenses
|
|
152,169
|
|
|
80.3
|
|
(1)
|
|
149,208
|
|
|
80.7
|
|
(1)
|
2,961
|
|
|
2.0
|
|
|||
General and administrative
|
|
16,506
|
|
|
8.4
|
|
|
|
13,846
|
|
|
7.2
|
|
|
2,660
|
|
|
19.2
|
|
|||
Depreciation and amortization
|
|
11,018
|
|
|
5.6
|
|
|
|
7,588
|
|
|
4.0
|
|
|
3,430
|
|
|
45.2
|
|
|||
Occupancy and other-franchise subleases
|
|
1,013
|
|
|
0.5
|
|
|
|
1,022
|
|
|
0.5
|
|
|
(9
|
)
|
|
(0.9
|
)
|
|||
Pre-opening costs
|
|
128
|
|
|
0.1
|
|
|
|
248
|
|
|
0.1
|
|
|
(120
|
)
|
|
(48.4
|
)
|
|||
Restaurant closure charges, net
|
|
12
|
|
|
*
|
|
|
|
94
|
|
|
*
|
|
|
(82
|
)
|
|
(87.2
|
)
|
|||
Loss on disposal of assets
|
|
137
|
|
|
0.1
|
|
|
|
14
|
|
|
*
|
|
|
123
|
|
|
*
|
|
|||
Total operating expenses
|
|
180,983
|
|
|
91.7
|
|
|
|
172,020
|
|
|
89.6
|
|
|
8,963
|
|
|
5.2
|
|
|||
Income from operations
|
|
16,446
|
|
|
8.3
|
|
|
|
20,001
|
|
|
10.4
|
|
|
(3,555
|
)
|
|
(17.8
|
)
|
|||
Other expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest expense
|
|
2,877
|
|
|
1.5
|
|
|
|
10,829
|
|
|
5.6
|
|
|
(7,952
|
)
|
|
(73.4
|
)
|
|||
Transaction-related costs
|
|
191
|
|
|
0.1
|
|
|
|
7,193
|
|
|
3.7
|
|
|
(7,002
|
)
|
|
(97.3
|
)
|
|||
Debt modification costs
|
|
—
|
|
|
—
|
|
|
|
137
|
|
|
0.1
|
|
|
(137
|
)
|
|
(100.0
|
)
|
|||
Change in fair value of warrant liability
|
|
—
|
|
|
—
|
|
|
|
(35
|
)
|
|
*
|
|
|
35
|
|
|
(100.0
|
)
|
|||
Total other expenses
|
|
3,068
|
|
|
1.6
|
|
|
|
18,124
|
|
|
9.4
|
|
|
(15,056
|
)
|
|
(83.1
|
)
|
|||
Income from operations before provision for income taxes
|
|
13,378
|
|
|
6.8
|
|
|
|
1,877
|
|
|
1.0
|
|
|
11,501
|
|
|
*
|
|
|||
Provision for income taxes
|
|
5,453
|
|
|
2.8
|
|
|
|
2,189
|
|
|
1.1
|
|
|
3,264
|
|
|
*
|
|
|||
Net income (loss)
|
|
$
|
7,925
|
|
|
4.0
|
%
|
|
|
$
|
(312
|
)
|
|
(0.2
|
)%
|
|
$
|
8,237
|
|
|
*
|
|
(1)
|
As a percentage of company restaurant sales.
|
*
|
Immaterial/not meaningful
|
|
|
Successor
|
|
|
Predecessor
|
||||
|
|
24 Weeks Ended
June 14, 2016 |
|
|
24 Weeks Ended
June 16, 2015 |
||||
(Amounts in thousands)
|
|
|
|
|
|
||||
Net cash provided by (used in)
|
|
|
|
|
|
||||
Operating activities
|
|
$
|
21,053
|
|
|
|
$
|
10,862
|
|
Investing activities
|
|
(16,189
|
)
|
|
|
(13,791
|
)
|
||
Financing activities
|
|
(7,760
|
)
|
|
|
1,885
|
|
||
Net decrease in cash
|
|
$
|
(2,896
|
)
|
|
|
$
|
(1,044
|
)
|
Exhibit
No.
|
|
Description
|
|
|
|
10.1
|
|
Severance Agreement, dated June 7, 2016, between Paul J.B. Murphy, III and Del Taco Restaurants, Inc.
|
|
|
|
10.2
|
|
Severance Agreement, dated June 9, 2016, between Steven L. Brake and Del Taco Restaurants, Inc.
|
|
|
|
10.3
|
|
Severance Agreement, dated June 17, 2016, between John D. Cappasola, Jr. and Del Taco Restaurants, Inc.
|
|
|
|
10.4
|
|
Tender Support Agreement, dated as of July 11, 2016 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Commission on July 11, 2016).
|
|
|
|
31.1
|
|
Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a).
|
|
|
|
31.2
|
|
Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).
|
|
|
|
32.1
|
|
Certification of the Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.
|
|
|
|
32.2
|
|
Certification of the Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.
|
|
|
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Document.
|
DEL TACO RESTAURANTS, INC.
|
|
Date: July 20, 2016
|
|
/s/ Paul J.B. Murphy III
|
Name: Paul J.B. Murphy III
|
Title: President and Chief Executive Officer
|
(principal executive officer)
|
|
/s/ Steven L. Brake
|
Name: Steven L. Brake
|
Title: Executive Vice President and Chief Financial Officer
|
(principal financial officer)
|
1.
|
Definitions.
For purposes of the Agreement, the following terms shall have the following
meanings: |
3.
|
Notice of Termination
. Except for termination by reason of the death of the Employee, any termination of the Employee's employment by the Company or any such termination by the Employee shall be communicated by written Notice of Termination to the other party hereto. For purposes of this
|
4.
|
Date of Termination
. The "
Date of Termination
" shall be: (A) if the Employee's employment is terminated by the Employee's death, the date of the Employee's death; (B) if the Employee's employment is terminated other than by reason of the death of the Employee, the date on which Notice of Termination is given.
|
5.
|
Withholding
. All payments made to the Employee under this Agreement shall be net of any tax or other amounts required to be withheld by the Company under applicable law.
|
6.
|
Confidentiality Agreement
. In the event the Employee breaches the terms of the Confidentiality Agreement, in addition to any other remedy that the Company may have under the Confidentiality Agreement or other applicable law, the Company shall have the right to cease making the Termination Payment and the Employee agrees to forfeit back to the Company any portion of the Termination Payment already paid to the Employee under this Agreement.
|
7.
|
Notice
. For purposes of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States certified mail, return receipt requested, postage prepaid, addressed as follows:
|
8.
|
Amendment
. No provisions of this Agreement may be amended, modified, or discharged unless such amendment, modification, or discharge is agreed to in writing and signed by the Employee and such officer of the Company as may be specifically designated by the Board.
|
9.
|
Entire Agreement
. This Agreement and the Restricted Stock Award constitute the entire agreement between the parties and supersede all prior agreements and understandings relating to the subject matter of this Agreement. No agreements or representations, oral or otherwise, express or implied, unless specifically referred to herein, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement.
|
10.
|
Governing Law
. The validity, interpretation, construction, and performance of this Agreement shall be governed by the laws of the State of California (without regard to principles of conflicts of laws).
|
11.
|
Counterparts
. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.
|
12.
|
ARBITRATION; OTHER DISPUTES
. ANY DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE BREACH, TERMINATION OR VALIDITY HEREOF SHALL
|
13.
|
Assignment
. This Agreement shall inure to the benefit of and be binding upon the Company and the Employee, their respective successors, executors, administrators, heirs and permitted assigns;
provided, however,
that the Employee shall not assign the Employee's duties hereunder. In the event of the Employee's death prior to the completion by the Company of all payments due him under this Agreement, the Company shall continue such payments to the Employee's beneficiary designated in writing to the Company prior to the Employee's death (or to the Employee's estate, if the Employee fails to make such designation).
|
14.
|
Enforceability
. If any portion or provision of this Agreement shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the full extent permitted by law.
|
15.
|
Waiver
. No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party. The failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.
|
16.
|
Compliance With Code Section 409A
.
|
1.
|
Definitions.
For purposes of the Agreement, the following terms shall have the following
meanings: |
3.
|
Notice of Termination
. Except for termination by reason of the death of the Employee, any termination of the Employee's employment by the Company or any such termination by the Employee shall be communicated by written Notice of Termination to the other party hereto. For purposes of this
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4.
|
Date of Termination
. The "
Date of Termination
" shall be: (A) if the Employee's employment is terminated by the Employee's death, the date of the Employee's death; (B) if the Employee's employment is terminated other than by reason of the death of the Employee, the date on which Notice of Termination is given.
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5.
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Withholding
. All payments made to the Employee under this Agreement shall be net of any tax or other amounts required to be withheld by the Company under applicable law.
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6.
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Confidentiality Agreement
. In the event the Employee breaches the terms of the Confidentiality Agreement, in addition to any other remedy that the Company may have under the Confidentiality Agreement or other applicable law, the Company shall have the right to cease making the Termination Payment and the Employee agrees to forfeit back to the Company any portion of the Termination Payment already paid to the Employee under this Agreement.
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7.
|
Notice
. For purposes of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States certified mail, return receipt requested, postage prepaid, addressed as follows:
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8.
|
Amendment
. No provisions of this Agreement may be amended, modified, or discharged unless such amendment, modification, or discharge is agreed to in writing and signed by the Employee and such officer of the Company as may be specifically designated by the Board.
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9.
|
Entire Agreement
. This Agreement and the Restricted Stock Award constitute the entire agreement between the parties and supersede all prior agreements and understandings relating to the subject matter of this Agreement. No agreements or representations, oral or otherwise, express or implied, unless specifically referred to herein, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement.
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10.
|
Governing Law
. The validity, interpretation, construction, and performance of this Agreement shall be governed by the laws of the State of California (without regard to principles of conflicts of laws).
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11.
|
Counterparts
. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.
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12.
|
ARBITRATION; OTHER DISPUTES
. ANY DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE BREACH, TERMINATION OR VALIDITY HEREOF SHALL
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13.
|
Assignment
. This Agreement shall inure to the benefit of and be binding upon the Company and the Employee, their respective successors, executors, administrators, heirs and permitted assigns;
provided, however,
that the Employee shall not assign the Employee's duties hereunder. In the event of the Employee's death prior to the completion by the Company of all payments due him under this Agreement, the Company shall continue such payments to the Employee's beneficiary designated in writing to the Company prior to the Employee's death (or to the Employee's estate, if the Employee fails to make such designation).
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14.
|
Enforceability
. If any portion or provision of this Agreement shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the full extent permitted by law.
|
15.
|
Waiver
. No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party. The failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.
|
16.
|
Compliance With Code Section 409A
.
|
1.
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Definitions.
For purposes of the Agreement, the following terms shall have the following
meanings: |
3.
|
Notice of Termination
. Except for termination by reason of the death of the Employee, any termination of the Employee's employment by the Company or any such termination by the Employee shall be communicated by written Notice of Termination to the other party hereto. For purposes of this
|
4.
|
Date of Termination
. The "
Date of Termination
" shall be: (A) if the Employee's employment is terminated by the Employee's death, the date of the Employee's death; (B) if the Employee's employment is terminated other than by reason of the death of the Employee, the date on which Notice of Termination is given.
|
5.
|
Withholding
. All payments made to the Employee under this Agreement shall be net of any tax or other amounts required to be withheld by the Company under applicable law.
|
6.
|
Confidentiality Agreement
. In the event the Employee breaches the terms of the Confidentiality Agreement, in addition to any other remedy that the Company may have under the Confidentiality Agreement or other applicable law, the Company shall have the right to cease making the Termination Payment and the Employee agrees to forfeit back to the Company any portion of the Termination Payment already paid to the Employee under this Agreement.
|
7.
|
Notice
. For purposes of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States certified mail, return receipt requested, postage prepaid, addressed as follows:
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8.
|
Amendment
. No provisions of this Agreement may be amended, modified, or discharged unless such amendment, modification, or discharge is agreed to in writing and signed by the Employee and such officer of the Company as may be specifically designated by the Board.
|
9.
|
Entire Agreement
. This Agreement and the Restricted Stock Award constitute the entire agreement between the parties and supersede all prior agreements and understandings relating to the subject matter of this Agreement. No agreements or representations, oral or otherwise, express or implied, unless specifically referred to herein, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement.
|
10.
|
Governing Law
. The validity, interpretation, construction, and performance of this Agreement shall be governed by the laws of the State of California (without regard to principles of conflicts of laws).
|
11.
|
Counterparts
. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.
|
12.
|
ARBITRATION; OTHER DISPUTES
. ANY DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE BREACH, TERMINATION OR VALIDITY HEREOF SHALL
|
13.
|
Assignment
. This Agreement shall inure to the benefit of and be binding upon the Company and the Employee, their respective successors, executors, administrators, heirs and permitted assigns;
provided, however,
that the Employee shall not assign the Employee's duties hereunder. In the event of the Employee's death prior to the completion by the Company of all payments due him under this Agreement, the Company shall continue such payments to the Employee's beneficiary designated in writing to the Company prior to the Employee's death (or to the Employee's estate, if the Employee fails to make such designation).
|
14.
|
Enforceability
. If any portion or provision of this Agreement shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the full extent permitted by law.
|
15.
|
Waiver
. No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party. The failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.
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16.
|
Compliance With Code Section 409A
.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Del Taco Restaurants, Inc.;
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2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Paul J.B. Murphy, III
|
Paul J.B. Murphy, III
|
President and Chief Executive Officer
|
(principal executive officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Del Taco Restaurants, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Steven L. Brake
|
Steven L. Brake
|
Executive Vice President and Chief Financial Officer
|
(principal financial officer)
|
(1)
|
the Quarterly Report on Form 10-Q of the Company for the quarter ended
June 14, 2016
(the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Paul J.B. Murphy, III
|
Paul J.B. Murphy, III
|
President and Chief Executive Officer
|
(principal executive officer)
|
(1)
|
the Quarterly Report on Form 10-Q of the Company for the quarter ended
June 14, 2016
(the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Steven L. Brake
|
Steven L. Brake
|
Executive Vice President and Chief Financial Officer
|
(principal financial officer)
|