Estimated Interest Expense Savings to Exceed $5 Million Annually
LAKE FOREST, Calif.--(BUSINESS WIRE)--
Del Taco Restaurants, Inc. (“Del Taco” and the “Company”) (NASDAQ: TACO,
TACOW), the second largest Mexican-American QSR chain by units in the
United States, operating restaurants under the name Del Taco, today
announced the closing of a new five-year $250 million senior credit
facility. The new revolving credit facility bears an initial interest
rate of LIBOR plus 200 basis points. The Company utilized $164 million
of proceeds from the new facility to refinance in whole its existing
senior secured debt and pay costs associated with the refinancing.
The refinancing represents a 305 basis point reduction in the Company’s
borrowing costs based on current market conditions, and is expected to
reduce annual interest expense by approximately $5.4 million per year.
Steven L. Brake, Chief Financial Officer of Del Taco, commented, “Del
Taco’s strong performance, including twelve consecutive quarters of
positive same store sales at company-owned restaurants and growth in
restaurant contribution margins, along with significant debt reduction
since the completion of our business combination with Levy Acquisition
Corp. has enabled us to refinance our outstanding indebtedness at a
substantially lower interest rate. This refinancing materially reduces
our annual interest expense, enhancing our net income and free cash
flow, and allowing us even greater flexibility to execute our new store
development strategy.”
Paul Murphy, Chief Executive Officer of Del Taco, remarked, “We are
thrilled that our great performance and exciting brand resonated so well
with lenders and allowed us to quickly complete a refinancing. We were
confident that as a public company we could improve our cost of
borrowing, and the terms of today’s refinancing measure up to our best
case scenario. Our strong second quarter results, including 7.0% revenue
growth, 12.2% growth in adjusted EBITDA, 30.2% growth in operating
income, and improved restaurant contribution certainly helped achieve
this outcome.”
Bank of America Merrill Lynch and J.P. Morgan Securities LLC are the
joint lead arrangers of the new senior credit facility.
About Del Taco Restaurants, Inc.
At Del Taco (NASDAQ: TACO) all menu items taste better because they are
made to order with fresh ingredients including cheddar cheese grated
from 40-pound blocks, handmade pico de gallo salsa, lard-free beans
slow-cooked from scratch, fresh sliced avocado and marinated chicken
grilled in the restaurant. The menu, which includes a full line of
breakfast, includes classic Mexican dishes such as tacos, burritos,
quesadillas and nachos as well as American favorites including
hamburgers, crinkle-cut fries and shakes. Del Taco’s UnFreshing
Believable campaign communicates the lengths the company goes to in
order to deliver quality, made-to-order menu items created with
freshly-prepared ingredients at unbelievable prices. With nearly 550
restaurants in 16 states, Del Taco serves more than three million guests
each week. In June 2015, Del Taco changed its name to Del Taco
Restaurants, Inc. following the completion of its transition to a public
company.
For more information, please visit www.deltaco.com.
Forward-Looking Statements
In addition to historical information, this release may contain a number
of “forward-looking statements” as defined in the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include,
without limitation, information concerning Del Taco’s possible or
assumed future results of operations, business strategies, competitive
position, industry environment, potential growth opportunities and the
effects of regulation. These statements are based Del Taco’s
management’s current expectations and beliefs, as well as a number of
assumptions concerning future events. When used in this press release,
the words “estimates,” “projected,” “expects,” “anticipates,”
“forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,”
“should,” “future,” “propose” and variations of these words or similar
expressions (or the negative versions of such words or expressions) are
intended to identify forward-looking statements. Such forward-looking
statements are subject to known and unknown risks, uncertainties,
assumptions and other important factors, many of which are outside Del
Taco’s management’s control that could cause actual results to differ
materially from the results discussed in the forward-looking statements.
These risks included, without limitation, consumer demand, our inability
to successfully open company-operated or franchised restaurants or
establish new markets, competition in our markets, our inability to grow
and manage growth profitably, adverse changes in food and supply costs,
our inability to access additional capital, changes in applicable laws
or regulations, food safety and foodborne illness concerns, our
inability to manage existing and to obtain additional franchisees, our
inability to attract and retain qualified personnel, our inability to
profitably expand into new markets, and the possibility that we may be
adversely affected by other economic, business, and/or competitive
factors. Additional risks and uncertainties are identified and discussed
in Del Taco’s reports filed with the SEC and available at the SEC’s
website at www.sec.gov
and the Company’s website at www.deltaco.com.
Forward-looking statements included in this release speak only as of the
date of this release. Del Taco undertakes no obligation to update its
forward-looking statements to reflect events or circumstances after the
date of this release or otherwise.
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Source: Del Taco Restaurants, Inc.