Attached files
| file | filename |
|---|---|
| 10-Q - EPL Intermediate, Inc. | v201535_10q.htm |
| EX-10.2 - EPL Intermediate, Inc. | v201535_10-2.htm |
| EX-32.1 - EPL Intermediate, Inc. | v201535_ex32-1.htm |
| EX-31.2 - EPL Intermediate, Inc. | v201535_ex31-2.htm |
| EX-32.2 - EPL Intermediate, Inc. | v201535_ex32-2.htm |
| EX-31.1 - EPL Intermediate, Inc. | v201535_ex31-1.htm |
EPL
Intermediate, Inc. Announces Results for the
13
Weeks and 39 Weeks Ended September 29, 2010
COSTA
MESA, CA -- (BUSINESS WIRE) – November 12, 2010 - EPL Intermediate, Inc. (“El
Pollo Loco” or the “Company”), parent company of El Pollo Loco, Inc., today
reported results for the 13-week third quarter and 39 weeks ended September 29,
2010.
El Pollo
Loco reported total operating revenue for the 13-week third quarter ended
September 29, 2010 of $68.2 million, which is a decrease of $0.3 million, or
0.4%, below total operating revenue for the 13-week quarter ended September 30,
2009 of $68.5 million. Total operating revenue includes sales at
company-operated stores and franchise revenue.
The
decrease in total operating revenue was primarily attributed to a
2.2% decrease in system-wide same-store sales for the 13-week third quarter
of 2010 compared to the 13-week third quarter of 2009. Restaurants
enter the comparable restaurant base for same-store sales the first full week
after that restaurant’s 15-month anniversary.
Commenting
on results for the third quarter of 2010, Steve Sather, acting president and CEO
of El Pollo Loco, Inc. said, “Traffic frequency in our restaurants continues to
be adversely affected by the challenging economy and high level of unemployment
in our core markets, and in particular among Hispanics which are a key
demographic for our brand. During the quarter, we had a limited time
offer for our Queso Crunch Burrito, which we launched with a new twist-- a
choice of flame-grilled chicken or steak, and our Double Your Chicken for $5
offer with the purchase of any 8, 10 or 12-piece meal. We believe
that the key to driving sales in this challenging environment is to remain
keenly focused on striking the right balance between value and check performance
while continuing our system-wide focus on operational excellence and exceptional
guest service.”
Operating
income increased $0.2 million, or 3.3%, to $4.9 million for the 13 weeks ended
September 29, 2010 from $4.7 million for the 13 weeks ended September 30,
2009. This increase in operating income was mainly due to lower
restaurant asset impairment charges and a decrease in our product cost, which
were partially offset by higher payroll and benefit costs.
Interest
expense, net of interest income, increased $0.4 million, or 4.8%, to $9.5
million for the 13 weeks ended September 29, 2010 from $9.1 million for the 13
weeks ended September 30, 2009.
Despite
having a loss for the 13 weeks ended September 29, 2010 and September 30,
2009, we had an income tax provision of $0.2 million and $0.3 million,
respectively, primarily related to the effect of changes in our deferred taxes
and the related effect of maintaining a full valuation allowance against certain
of our deferred tax assets as of September 29, 2010.
As a
result of the factors cited above, there was a net loss for the 13 weeks ended
September 29, 2010 of $4.8 million compared to a net loss of $4.6 million for
the 13 weeks ended September 30, 2009.
Total
operating revenue for the 39 weeks ended September 29, 2010 was $207.4 million, which was a
decrease of $4.4 million, or 2.1%, from total operating revenue for the 39 weeks
ended September 30, 2009 of $211.8 million. The decrease was
primarily due to a decrease in same-store sales of 4.7% for the system for
the 39 weeks ended September 29, 2010 compared to the corresponding period of
2009.
Operating
income increased $3.6 million, or 27.6%, to $16.5 million for the 39 weeks ended
September 29, 2010 from $12.9 million for the same period of
2009. This increase in operating income was due primarily to a
decrease in our product cost, lower legal settlements and lower restaurant asset
impairment charges, which were partially offset by lower total operating revenue
and an increase in our closed store reserve.
Despite
having a loss for the 39 weeks ended September 29, 2010, we had an income tax
provision of $1.0 million, primarily related to the effect of changes in our
deferred taxes and the related effect of maintaining a full valuation allowance
against certain of our deferred tax assets as of September 29,
2010. For the 39 weeks ended September 30, 2009, we had an income tax
provision of $19.8 million as we recorded a valuation allowance against our
deferred tax assets and the effect of changes in our deferred
taxes.
As a
result of the factors noted above, the company had a net loss for the 39 weeks
ended September 29, 2010 of $12.5 million compared to a net loss of $30.4
million for the 39 weeks ended September 30, 2009.
Commenting
on the remainder of 2010, Sather said, “With the economy continuing to
negatively impact consumer spending, we are taking this time to align our entire
team, company members and franchisees, around a sharpened focus on quality,
service, and cleanliness as a platform to strengthen our position in the
marketplace and set ourselves up for momentum when the economy turns
around. We will also continue to strive to provide our guests value,
while protecting profits, with new menu items
that leverage our flame-grilling expertise; greater menu variety with both
chicken and steak; our Loco Value Menu; and compelling family meal
offers.”
El Pollo
Loco’s restaurant count changes for the 13 weeks ended September 29, 2010 are as
follows:
|
Company
|
Franchised Stores
|
Total
|
||||||||||
|
At
June 30, 2010
|
171
|
241
|
412
|
|||||||||
|
Opened
|
-
|
1
|
1
|
|||||||||
|
Closed
|
(1)
|
-
|
(1)
|
|||||||||
| At September 29, 2010 |
170
|
242
|
412
|
|||||||||
Addressing
the Company’s development plans, Sather commented, “As we shared earlier this
year, we expect to open fewer restaurants this year than last, due in part to
the continued difficulty franchisees have securing financing in this tough
environment and the impact that the challenging economy has had on our
franchisees, several of whom have delayed or reduced the number of new
restaurants they plan to open. During the third quarter of 2010, one
new franchise restaurant opened in San Diego, CA and we closed one company
restaurant in Sanger, CA. Since the end of the third quarter, one additional
franchise restaurant opened in Rohnert Park, CA.
“We plan
to open one more restaurant before the end of 2010, a company-operated
restaurant in Anaheim, CA, which will reflect a lower investment cost and
several new features to further enhance our guests’ experience.”
System-wide
Sales
Included
above is system-wide same-store sales information. System-wide same-store sales
are a financial measure that includes sales at all company-owned stores and
franchise-owned stores, as reported by franchisees. Management uses system-wide
same-store sales information internally in connection with store development
decisions, planning and budgeting analyses. Management believes system-wide
same-store sales information is useful in assessing consumer acceptance of the
Company’s brand and facilitates an understanding of financial performance as the
Company’s franchisees pay royalties and contribute to advertising pools based on
a percentage of their sales.
Safe Harbor
Statement
This news
release may be deemed to contain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. The Company intends that all such statements be
subject to the safe harbor provisions contained in those
sections. Forward-looking statements are statements that do not
relate solely to historical fact. They include, but are not limited
to, statements which begin with phrases such as “we believe that the key to
driving sales in the months ahead, …” “commenting on the remainder of
2010, …” “we will also strive to provide our guests value…” “we expect to open
fewer restaurants this year than last,” and “we plan to open one more restaurant
before the end of 2010,” and any other statements that may predict, forecast,
indicate or imply future results, performance, achievements or
events. Forward-looking statements generally contain words such as
“believe,” “anticipate,” “expect,” “estimate,” “intend,” “project,” “plan,”
“will,” “should,” “may,” “could” or words or phrases of similar
meaning. Forward-looking statements reflect management's current
expectations regarding future results, performance, achievements or events that
involve risks and uncertainties. Readers are cautioned that these
forward-looking statements are only predictions and many important factors,
including factors outside of the control of the Company, could cause actual
results, performance, achievements or events to differ materially from those
discussed in the forward-looking statements. Factors that could cause
actual results to differ materially from those expressed or implied by the
forward-looking statements include but are not limited to: the adverse impact of
economic conditions on our operating results and financial condition, on our
ability to comply with the terms and covenants of our debt agreements, and on
our ability to pay or to refinance our existing debt or to obtain additional
financing; our substantial level of indebtedness; food-borne-illness incidents;
risks arising from the delay or inability to hire new executives for our
currently vacant president/Chief Executive Officer and Chief Marketing Officer
positions since the Company depends on the unique abilities and knowledge of its
officers; negative publicity, whether or not valid; increases in the cost of
chicken; our dependence upon frequent deliveries of food and other
supplies; our vulnerability to changes in consumer preferences and economic
conditions; our sensitivity to events and conditions in the Southern California
area, our largest market; our ability to compete successfully with other quick
service and fast casual restaurants; our ability to expand into new markets; our
reliance on our franchisees, who have also been adversely impacted by the
challenging economic condition; matters relating to labor laws and the adverse
impact of related litigation, including wage and hour class actions; our ability
to support our franchise system; our ability to renew leases at the
end of their term; the impact of applicable federal, state or local government
regulations; our ability to protect our name and logo and other proprietary
information; litigation we face in connection with our operations; and other
risk factors listed from time to time in the Company's reports filed with the
Securities and Exchange Commission. Although the Company believes
that the assumptions underlying the forward-looking statements are reasonable,
any of the assumptions could prove inaccurate and, therefore, the Company cannot
assure the reader that the results, performance, achievements or events
contemplated by the forward-looking statements will be realized in the timeframe
anticipated or at all. In light of the significant uncertainties
inherent in forward-looking statements included herein, the inclusion of such
information should not be regarded as a representation by the Company or any
other person that the Company’s objectives or plans will be
achieved. Accordingly, readers are cautioned not to place undue
reliance on such forward-looking statements. The Company undertakes
no obligation to publicly update or revise any forward-looking statement,
whether as the result of new information, future events or
otherwise. The financial information contained in this release should
be read in conjunction with the consolidated financial statements and notes
thereto included in the Company’s most recent annual report on Form 10-K and
subsequent quarterly reports on Form 10-Q, as each may be amended from time to
time. Statements about the Company’s past performance are not
necessarily indicative of its future results.
About the
Company
El Pollo
Loco® is the nation’s leading restaurant concept specializing in flame-grilled
chicken. Headquartered in Costa Mesa, California, El Pollo Loco, Inc.
operates a restaurant system comprised of 170 company-operated and 242
franchised restaurants (as of September 29, 2010) located primarily in
California, with additional restaurants in Arizona, Colorado, Connecticut,
Georgia, Illinois, Missouri, Nevada, New Jersey, Oregon, Texas, Utah and
Virginia. El Pollo Loco’s menu features the Company’s signature
citrus-marinated, flame-grilled chicken in individual and family-size meals
served with a choice of corn or flour tortillas, freshly-prepared salsas and an
assortment of side orders. El Pollo Loco also serves a variety of
contemporary, Mexican-inspired entrees featuring the chain’s citrus-marinated,
flame-grilled chicken and carne asada, including Pollo Bowl® entrees, pollo
salads, grilled burritos, tacos, quesadillas and more. For more
information about the Company, visit www.elpolloloco.com.
|
Contacts:
|
Gary
Campanaro
|
Julie
Weeks
|
|
Chief
Financial Officer
|
Vice
President of Communications
|
|
|
El
Pollo Loco, Inc.
|
El
Pollo Loco, Inc.
|
|
|
714.599.5155
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714.599.5150
|
|
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gcampanaro@elpolloloco.com
|
jweeks@elpolloloco.com
|
Summary of Financial
Information
EPL
INTERMEDIATE, INC.
(A
Wholly Owned Subsidiary of El Pollo Loco Holdings, Inc.)
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
|
(Amounts
in thousands)
|
|
13 Weeks Ended
|
39 Weeks Ended
|
|||||||||||||||
|
September
30,
|
September
29,
|
September
30,
|
September
29,
|
|||||||||||||
|
2009
|
2010
|
2009
|
2010
|
|||||||||||||
|
OPERATING
REVENUE:
|
||||||||||||||||
|
Restaurant
revenue
|
$
|
63,740
|
$
|
63,756
|
$
|
197,444
|
$
|
193,686
|
||||||||
|
Franchise
revenue
|
4,764
|
4,457
|
14,357
|
13,754
|
||||||||||||
|
Total
operating revenue
|
68,504
|
68,213
|
211,801
|
207,440
|
||||||||||||
|
OPERATING
EXPENSES:
|
||||||||||||||||
|
Product
cost
|
20,587
|
19,919
|
63,747
|
60,465
|
||||||||||||
|
Payroll
and benefits
|
16,621
|
17,359
|
52,391
|
52,266
|
||||||||||||
|
Depreciation
and amortization
|
3,015
|
2,755
|
8,651
|
7,949
|
||||||||||||
|
Other
operating expenses
|
23,544
|
23,285
|
74,090
|
70,271
|
||||||||||||
|
Total
operating expenses
|
63,767
|
63,318
|
198,879
|
190,951
|
||||||||||||
|
OPERATING
INCOME
|
4,737
|
4,895
|
12,922
|
16,489
|
||||||||||||
|
INTEREST
EXPENSE—Net
|
9,075
|
9,506
|
23,501
|
27,981
|
||||||||||||
|
OTHER
EXPENSE
|
-
|
-
|
443
|
-
|
||||||||||||
|
OTHER
INCOME
|
-
|
-
|
(452
|
)
|
-
|
|||||||||||
|
LOSS
BEFORE PROVISION FOR INCOME TAXES
|
(4,338
|
)
|
(4,611
|
)
|
(10,570
|
)
|
(11,492
|
)
|
||||||||
|
PROVISION
FOR INCOME TAXES
|
306
|
221
|
19,848
|
994
|
||||||||||||
|
NET
LOSS
|
$
|
(4,644
|
)
|
$
|
(4,832
|
)
|
$
|
(30,418
|
)
|
$
|
(12,486
|
)
|
||||
|
13
Weeks Ended
|
39
Weeks Ended
|
|||||||||||||||
|
September
30,
|
September
29,
|
September
30,
|
September
29,
|
|||||||||||||
|
2009
|
2010
|
2009
|
2010
|
|||||||||||||
|
Operating
Statement Data:
|
||||||||||||||||
|
Restaurant
revenue
|
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
|
Product
cost
|
32.3 | 31.2 | 32.3 | 31.2 | ||||||||||||
|
Payroll
and benefits
|
26.1 | 27.2 | 26.5 | 27.0 | ||||||||||||
|
Depreciation
and amortization
|
4.7 | 4.3 | 4.4 | 4.1 | ||||||||||||
|
Other
operating expenses
|
36.9 | 36.5 | 37.5 | 36.3 | ||||||||||||
|
Operating
income
|
7.4 | 7.7 | 6.5 | 8.5 | ||||||||||||
|
Interest
expense-net
|
14.2 | 14.9 | 11.9 | 14.4 | ||||||||||||
|
Other
expense
|
0.0 | 0.0 | 0.2 | 0.0 | ||||||||||||
|
Other
income
|
0.0 | 0.0 | (0.2 | ) | 0.0 | |||||||||||
|
Loss
before provision for income taxes
|
(6.8 | ) | (7.2 | ) | (5.4 | ) | (5.9 | ) | ||||||||
|
Provision
for income taxes
|
0.5 | 0.3 | 10.1 | 0.5 | ||||||||||||
|
Net
loss
|
(7.3 | ) | (7.6 | ) | (15.4 | ) | (6.4 | ) | ||||||||
|
Supplementary
Operating Statement Data:
|
||||||||||||||||
|
Restaurant
other operating expense
|
24.7 | 24.2 | 23.6 | 24.0 | ||||||||||||
|
Franchise
expense
|
1.5 | 1.8 | 1.5 | 1.6 | ||||||||||||
|
General
and administrative expense (1) (2)
|
10.7 | 10.5 | 12.4 | 10.7 | ||||||||||||
|
Total
other operating expenses
|
36.9 | 36.5 | 37.5 | 36.3 | ||||||||||||
|
(1)
|
General
and administrative expenses as a percent of total operating revenue for
the 13 weeks ended September 30, 2009 was 10.0% and 9.8% for the 13 weeks
ended September 29, 2010.
|
|
(2)
|
General
and administrative expenses as a percent of total operating revenue for
the 39 weeks ended September 30, 2009 was 11.6% and 10.0% for the 39 weeks
ended September 29, 2010.
|