Del Taco Restaurants (TACO) announces Q3 system-wide comparable restaurant sales increased 4.1%

Del Taco Restaurants, Inc. (“Del Taco” or the “Company”), (NASDAQ: TACO), the second largest Mexican-American quick service restaurant chain by units in the United States, today reported preliminary unaudited sales results for the 12-week period ending September 8, 2020 and provided a liquidity update.

John D. Cappasola, Jr., President and Chief Executive Officer of Del Taco, commented, “Our unique value-oriented QSR+ positioning combined with our expanding off-premise convenience is proving resilient and resonating with guests through our contactless or limited contact channels. I am pleased our nimble and focused approach resulted in comparable restaurant sales that sequentially improved from the fiscal second quarter and turned positive at both company-operated and franchised restaurants during the fiscal third quarter. This momentum enabled us to reduce our outstanding revolver balance by $21 million during the fiscal third quarter.”

Cappasola continued, “We are thankful for our restaurant teams, franchisees and support center employees who are continuing to excel in this challenging environment while delivering a great guest experience. We recently became the first national Mexican QSR to launch a new Crispy Chicken menu featuring unique flavors and products across our barbell menu for an unbeatable value. Outstanding training and consistent execution are driving high overall guest satisfaction scores for Crispy Chicken and helping to accelerate comparable restaurant sales trends.”

Fiscal Third Quarter 2020 Sales Highlights

• System-wide comparable restaurant sales increased 4.1%;
  • Company-operated comparable restaurant sales increased 2.0%;
  • Franchised comparable restaurant sales increased 6.5%;
• Total revenue of $120.7 million, representing a 0.4% increase from the fiscal third quarter 2019;
• Company-operated restaurant sales of $109.5 million, representing a 1.4% decrease from the fiscal third quarter 2019 primarily due to fewer company-operated restaurants open during 2020 compared to 2019 due to our refranchising activity; and
• One company-operated and four franchise restaurants opened and two franchise restaurants closed.

The expected sales results are preliminary and unaudited, have not been reviewed by the Company’s independent registered public accountants, and remain subject to the completion of normal quarter-end accounting procedures and adjustments and are subject to change.

Liquidity

During the fiscal third quarter, the Company reduced its outstanding revolving credit facility borrowing by $21 million to $124 million from $145 million at the end of both the fiscal second quarter and last year’s fiscal fourth quarter. The Company currently has $108.7 million available under its revolving credit facility.

Investor Conference Participation

As a reminder, John D. Cappasola, Jr., President and Chief Executive Officer, and Steven L. Brake, Executive Vice President and Chief Financial Officer, will present at CL King & Associates’ 18th Annual Best Ideas Conference tomorrow at 3:30 PM ET and hold investor meetings throughout the day.

The presentation will be webcast live and later archived at www.deltaco.com under the investors section. The Company has posted an investor deck to its investors website that will accompany the presentation.

Key Financial Definitions

Comparable restaurant sales growth reflects the change in year-over-year sales for the comparable company, franchise and total system restaurant base. Restaurants are included in the comparable store base in the accounting period following its 18th full month of operations and excludes restaurant closures.

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