|
Franchise News Release: IRVINE, CA - (Aug-11-2005) El Pollo Loco, Inc. Announces Results for the 13 Weeks and 26 Weeks Ended June 29, 2005El Pollo Loco, Inc. today reported results for its 13 week second quarter and 26 weeks ended June 29, 2005. For simplicity of presentation, the Company has described the 13 week second quarters and 26 week periods ended June 29, 2005 and June 30, 2004 as June 30, 2005 and June 30, 2004, respectively. El Pollo Loco reported operating revenues for the 13 weeks ended June 30, 2005 of $61.2 million, which is an increase of $5.5 million, or 9.8%, ver operating revenues for the 13 weeks ended June 30, 2004 of $55.7 million. Operating revenues include both sales at company-operated stores and Franchise revenues. Same store sales for the system, which includes sales from both company-operated and franchised stores, increased 9.4% i the second quarter of fiscal 2005; company-operated Restaurant same store sales increased 8.8% ad franchise restaurant same store sales increased 9.9%. /font> Operating income for the second quarter of fiscal 2005 was $7.0 million, an increase of $3.9 million, or 125.1%, rom the second quarter of 2004 operating income of $3.1 million. A 1.5% rduction in payroll and benefit expenses as a percentage of sales to 25.4% fr the second quarter of 2005 from 26.9% fr the second quarter of 2004 contributed to this increase. In addition, advertising expense decreased by $0.4 million to 4.4% o restaurant revenue for the second quarter of 2005 compared to 5.6% o restaurant revenue for the second quarter of 2004 due to the timing of advertising expenditures. Also contributing to the increase in operating income was a $1.5 million decrease in general and administrative expenses for bonuses accrued for option holders related to the revaluation of stock options in the second quarter of 2004, partially offset by a $0.4 million increase in outside services expense, which is primarily attributed to implementation costs of the Sarbanes-Oxley Act of 2002, and also by an impairment charge of $0.9 million, which was recorded by the Company for one under-performing company-operated store that will continue to operate. Interest expense decreased by $0.2 million to $3.3 million in the second quarter of 2005 from $3.5 million in the second quarter of 2004 due to lower average debt balances. Our provision for income taxes consisted of income tax expense of $1.4 million and an income tax benefit of $(0.2) million for the 13 weeks ended June 30, 2005 and 2004, respectively. As a result of the above, net income for the second quarter of fiscal 2005 was $2.3 million, which was an increase of $2.6 million from the second quarter 2004 net loss of $0.3 million. EBITDA for the second quarter of fiscal 2005 was $10.6 million, an increase of $4.2 million, or 64.7%, rom second quarter 2004 EBITDA of $6.4 million. This increase is primarily due to the operating income factors described above. EBITDA represents net income before interest, taxes, depreciation and amortization. EBITDA and its uses and limitations are discussed further under "Non-GAAP Financial Measures," below. Operating revenues for the 26-week period ended June 30, 2005 were $115.8 million, which was an increase of $6.3 million, or 5.8%, ver operating revenues for the 26 weeks ended June 30, 2004 of $109.5 million. Same store sales for the system increased 6.1% fr the 26 weeks ended June 30, 2005; company-operated restaurant same store sales increased 4.6% ad franchise restaurant same store sales increased 7.6%. /font> Operating income for the 26 weeks ended June 30, 2005 was $12.0 million, which was an increase of $2.6 million, or 26.8% oer operating income of $9.4 million for the 26 weeks ended June 30, 2004. Interest expense decreased $0.4 million, or 5.4%, o $6.7 million for the 26-week period ended June 30, 2005 from $7.1 million for the 26-week period ended June 30, 2004 due to lower average debt balances. Net income for the 26 weeks ended June 30, 2005 was $3.2 million, an increase of $1.9 million, or 142.8%, rom net income for the 26 weeks ended June 30, 2004 of $1.3 million. EBITDA for the 26 weeks ended June 30, 2005 was $19.0 million, an increase of $3.0 million, or 19.0%, ver EBITDA of $16.0 million for the 26 weeks ended June 30, 2004. Stephen E. Carley, president and CEO of El Pollo Loco, Inc. said, "The second quarter results show the progress we made in sales growth and labor cost controls. Our promotions celebrating our 25th Anniversary that offered 25 cent tacos al carbon with the purchase of an 8, 10 or 12 piece meal, along with a "Loco Favorites" menu that offered a taco al carbon, BRC (beans/rice/cheese) burrito, leg or thigh, churro, or cheese quesadilla for $1.00 each were successful in bringing additional customers into our stores. We designed these promotions to focus on driving purchases of our family meals and by offering menu items that our customers could add to their meals, all without sacrificing margins. In fact, our gross margin remained steady at 68.4% o sales for the second quarter of 2005 compared to 68.5% fr the second quarter of 2004." Mr. Carley added, "During the second quarter, we opened three company stores and three franchise stores. Additionally, we are pleased to announce the signing of new development agreements with experienced restaurateurs in New England and in portions of New York and New Jersey. The two development agreements are for commitments for the opening of 19 El Pollo Loco restaurants with options to open an additional 36 restaurants in these areas. With these new development agreements, we now have a total of 20 franchisees with development agreements totaling 140 restaurants to be built in 14 states." El Pollo Loco's store count changes for the 26 weeks ended June 30, 2005 are as follows: Company Franchised Stores Total ----------------- ----------------- -------------- December 29, 2004 137 185 322 Q1 - Opened 0 1 1 Q1 - Closed (1) (1) (2) ----------------- ----------------- -------------- March 30, 2005 136 185 321 Q2 - Opened 3 3 6 ----------------- ----------------- -------------- June 30, 2005 139 188 327 ----------------- ----------------- -------------- El Pollo Loco currently operates 327 restaurants, located principally in California, with additional restaurants in Arizona, Nevada and Texas. Headquartered in Irvine, California, El Pollo Loco, Inc. is a privately held company owned by affiliates of New York-based equity investment firm American Securities Capital Partners, L.P. and Company management. The chain offers a wide variety of contemporary Mexican-influenced entrees (Pollo Bowls®, Pollo Salads, specialty chicken burritos and more) in addition to individual and family meal quantities of its famous citrus-marinated, flame-grilled chicken. The chicken is served with steaming tortillas, freshly prepared salsas and a wide assortment of side dishes. Non-GAAP Financial Measures Included above are franchise and system-wide comparable sales increases. System-wide sales are a non-GAAP financial measure that includes sales at all company-owned stores and franchise-owned stores, as reported by franchisees. Management uses system-wide sales information internally in connection with store development decisions, planning and budgeting analyses. Management believes system-wide 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. EBITDA is a supplemental measure of our performance that is not required by, or presented in accordance with, accounting principles generally accepted in the United States, or GAAP. EBITDA is not a measurement of our financial performance under GAAP and should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with GAAP or as an alternative to cash flow from operating activities as measures of our liquidity. EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under GAAP. In addition, in evaluating EBITDA, you should be aware that in the future we will incur expenses such as those used in calculating EBITDA. Our presentation of EBITDA should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items. The most comparable measure to EBITDA in accordance with GAAP is net income. A reconciliation of EBITDA to net income is shown in the table below: RECONCILIATION OF EBITDA TO NET INCOME
Dollars in thousands 13 Weeks Ended 26 Weeks Ended June 30 June 30 2004 2005 2004 2005 ------- -------- -------- -------- Net income (loss) $(270) $2,323 $1,329 $3,226 Adjustments: Income tax provision (benefit) (157) 1,369 977 1,996 Interest expense, net 3,537 3,307 7,119 6,733 Depreciation and Amortization 3,320 3,592 6,563 7,077 ------- -------- -------- -------- EBITDA $6,430 $10,591 $15,988 $19,032 ======= ======== ======== ======== Safe Harbor Statement The following is a Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This press release includes "forward-looking statements" as that term is defined by federal securities laws. Forward-looking statements are those that do not relate solely to historical fact. They include, but are not limited to, any statement that may predict, forecast, indicate or imply future results, performance, achievements or events. They may contain words such as "believe," "anticipate," "expect," "estimate," "intend," "project," "plan," "will," "should," "may," "could" or words or phrases of similar meaning. These forward-looking statements reflect our current views with respect to future events and are based on assumptions and are subject to risks and uncertainties. Also, these forward-looking statements present our estimates and assumptions only as of the date of this press release. Statements about our past performance are not necessarily indicative of future results. Except for our ongoing obligation to disclose material information as required by federal securities laws, we do not intend to update you concerning any future revisions to any forward-looking statements to reflect events or circumstances occurring after the date of this press release. 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, our substantial level of indebtedness, food-borne-illness incidents, 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 greater Los Angeles area, our ability to compete successfully with other quick service and fast casual restaurants, our ability to expand into new markets, our reliance in part on our franchisees, our ability to support our expanding franchise system, litigation we face in connection with our operations, the possibility of unforeseen events affecting the industry in general and other risk factors listed from time to time in our reports. filed with the Securities and Exchange Commission. CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands)
13 Weeks Ended 26 Weeks Ended June 30, June 30, 2004 2005 2004 2005 (as restated, Note 1.)
OPERATING REVENUE: Restaurant revenue $52,150 $57,176 $102,604 $108,335 Franchise revenue 3,539 3,990 6,926 7,501
Total operating revenue 55,689 61,166 109,530 115,836
OPERATING EXPENSES: Product cost 16,407 18,089 31,961 34,302 Payroll and benefits 14,020 14,521 28,027 28,094 Depreciation and amortization 3,321 3,595 6,563 7,077 Other operating expenses 18,832 17,961 33,554 34,408 Total operating expenses 52,579 54,167 100,105 103,881 OPERATING INCOME 3,110 6,999 9,425 11,955 INTEREST EXPENSE, net 3,537 3,307 7,119 6,733 INCOME (LOSS) BEFORE PROVISION (BENEFIT) FOR INCOME TAXES (427) 3,692 2,306 5,222 PROVISION (BENEFIT) FOR INCOME TAXES (157) 1,369 977 1,996 NET INCOME (LOSS) $(270) $2,324 $1,329 $3,227 1. See discussion of the restatement of the 13 and 26 weeks ended June 30, 2004 in the Company's Form 10-K, for the fiscal year ended December 29, 2004, which was filed with the Securities and Exchange Commission on March 29, 2005 13 Weeks Ended June 30, 2004 2005 Income Statement Data: Restaurant revenue 100.0% 10.0% Product cost 31.5 31.6 Payroll and benefits 26.9 25.4 Depreciation and amortization 6.4 6.3 Other operating expenses 36.1 31.4 Operating income 6.0 12.2 Interest expense 6.8 5.8 Income (loss) before income taxes (0.8) 6.5 Net income (loss) (0.5) 4.1 Supplementary Income Statement Data: Restaurant other operating expense 20.9 18.4 Franchise expense 1.9 1.4 General and administrative expense 13.3 11.6 Total other operating expenses 36.1 31.4 26 Weeks Ended June 30, 2004 2005 Income Statement Data: Restaurant revenue 100.0% 10.0% Product cost 31.1 31.7 Payroll and benefits 27.3 25.9 Depreciation and amortization 6.4 6.5 Other operating expenses 32.7 31.8 Operating income 9.2 11.0 Interest expense 6.9 6.2 Income before income taxes 2.2 4.8 Net income 1.3 3.0 Supplementary Income Statement Data: Restaurant other operating expense 19.6 18.9 Franchise expense 1.7 1.4 General and administrative expense 11.4 11.5 Total other operating expenses 32.7 31.8 CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands) 26 Weeks Ended June 30, 2004 2005 (as restated, Note 1.) CASH FLOWS FROM OPERATING ACTIVITIES: Net income $1,329 $3,226 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of property and intangible assets 6,563 7,077 (Gain) loss on disposal of assets 159 (143) Asset impairment - 1,047 Amortization of deferred financing costs 589 629 Changes in operating assets and liabilities: Notes and accounts receivable--net (147) (342) Inventories 140 32 Prepaid expenses and other current assets (402) (479) Income taxes receivable / payable 779 1,994 Other assets 11 (220) Accounts payable (119) 1,188 Accrued salaries and vacation (2,224) (715) Accrued insurance 413 94 Accrued interest 189 25 Accrued advertising 1,899 264 Other accrued expenses and current and noncurrent liabilities (449) 157 Net cash provided by operating activities 8,730 13,834 CASH FLOW FROM INVESTING ACTIVITIES: Proceeds from asset disposition - 483 Purchase of other assets - (1,086) Purchase of franchise restaurants--net of cash required (2,421) - Purchase of property (5,691) (6,169) Net cash used in investing activities (8,112) (6,772) CASH FLOWS FROM FINANCING ACTIVITIES: Payment of obligations under capital leases (599) (653) Payments on notes payable (2,224) (2,697) Deferred financing costs (1,431) - Net cash used in financing activities (4,254) (3,350) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $(3,636) $3,712 CASH AND CASH EQUIVALENTS-- Beginning of period 5,353 5,587 CASH AND CASH EQUIVALENTS-- End of period $1,717 $9,299 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION-- Cash paid during the period for: Interest $5,389 $5,509 Income taxes $197 $- As of June 30, 2004 and 2005, the Company had included in accounts payable $605,000 and $750,000, respectively, for the purchase of property and equipment. 1. See discussion of the restatement of the 13 and 26 weeks ended June 30, 2004 in the Company's Form 10-K, for the fiscal year ended December 29, 2004, which was filed with the Securities and Exchange Commission on March 29, 2005 CONDENSED BALANCE SHEETS (UNAUDITED) (In thousands)
DEC.29, JUNE 30, ASSETS 2004 2005 CURRENT ASSETS: Cash and cash equivalents $5,587 $9,299 Notes and accounts receivable--net 2,714 3,056 Inventories 1,136 1,104 Prepaid expenses and other current assets 2,510 2,989 Income taxes receivable 649 - Deferred income taxes 4,150 4,150 Total current assets 16,746 20,598 PROPERTY OWNED--Net 59,469 59,471 PROPERTY HELD UNDER CAPITAL LEASES--Net 4,634 4,081 GOODWILL--Net 38,989 38,674 DOMESTIC TRADEMARKS--Net 19,800 19,800 OTHER INTANGIBLE ASSETS--Net 23,532 22,224 OTHER ASSETS 784 2,090 TOTAL ASSETS $163,954 $166,938 CONDENSED BALANCE SHEETS (UNAUDITED) (In thousands, except share data) DEC. 29, JUNE 30, 2004 2005 LIABILITIES AND STOCKHOLDER'S EQUITY CURRENT LIABILITIES: Current portion of notes payable to SunTrust Bank $3,667 $3,224 Current portion of obligations under capital leases 1,296 1,165 Current portion of other notes payable 619 610 Accounts payable 8,048 9,986 Accrued salaries 4,517 3,546 Accrued vacation 1,467 1,723 Accrued insurance 3,293 3,387 Accrued income taxes payable - 1,345 Accrued interest 488 513 Accrued advertising 264 528 Other accrued expenses and current liabilities 4,248 4,583
Total current liabilities 27,907 30,610
NONCURRENT LIABILITIES: Senior secured notes 110,000 110,000 Notes payable to SunTrust Bank--less current portion 3,667 1,612 Obligations under capital leases--less current portion 6,430 5,908 Other notes payable--less current portion 1,193 1,003 Deferred income taxes 4,672 4,672 Other noncurrent liabilities 9,576 9,398
Total noncurrent liabilities 135,538 132,593
COMMITMENTS AND CONTINGENCIES
STOCKHOLDER'S EQUITY Common stock, $.01 par value--20,000 shares authorized; 100 shares issued and outst |
|
| Franchise Information |
|---|
| Related Industries: |
|
Restaurant Franchises |
| Related Business & Franchise Opportunites: |
 
|
Related Franchise News: |
| El Pollo Loco Names Its Top Cook at 17th Annual Grilling Challenge - Jun 28,2011 |
| El Pollo Loco Names Goodness Mfg. New Advertising Agency of Record - Feb 10,2011 |
| Fish Tacos - New at El Pollo Loco! - Jan 27,2010 |
| El Pollo Loco Impletments Competitor Coupon Program - Feb 19,2009 |
| El Pollo Loco Expands Executive Team with New Innovation Post - Jan 22,2009 |
| El Pollo Loco Franchise is Newest 'Recruit' on NBC's The Apprentice: Los Angeles - Jan 16,2007 |
All El Pollo Loco / Hot Dish Advertising News |
Home -
Blog -
About Us -
Contact Us -
Site Map -
Advertising Info -
Copyright -
Privacy Policy
Bison.com - Offering the best franchise opportunities and businesses for sale since 1995.
