Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 22, 2016 | Apr. 29, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 22, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | TACO | |
Entity Registrant Name | Del Taco Restaurants, Inc. | |
Entity Central Index Key | 1,585,583 | |
Current Fiscal Year End Date | --01-03 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 38,205,461 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - Successor [Member] - USD ($) $ in Thousands | Mar. 22, 2016 | Dec. 29, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 13,404 | $ 10,194 |
Accounts and other receivables, net | 2,631 | 3,220 |
Inventories | 2,526 | 2,806 |
Prepaid expenses and other current assets | 2,519 | 3,545 |
Total current assets | 21,080 | 19,765 |
Property and equipment, net | 113,332 | 114,030 |
Goodwill | 319,082 | 318,275 |
Trademarks | 220,300 | 220,300 |
Intangible assets, net | 27,481 | 28,373 |
Other assets, net | 2,883 | 2,829 |
Total assets | 704,158 | 703,572 |
Current liabilities: | ||
Accounts payable | 15,977 | 16,831 |
Other accrued liabilities | 31,523 | 32,897 |
Current portion of capital lease obligations and deemed landlord financing liabilities | 1,684 | 1,725 |
Total current liabilities | 49,184 | 51,453 |
Long-term debt, capital lease obligations and deemed landlord financing liabilities, excluding current portion, net | 167,677 | 167,968 |
Deferred income taxes | 81,429 | 79,523 |
Other non-current liabilities | 34,709 | 36,251 |
Total liabilities | $ 332,999 | $ 335,195 |
Commitments and contingencies | ||
Shareholders’ equity: | ||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; no shares issued and outstanding | $ 0 | $ 0 |
Common stock, $0.0001 par value; 400,000,000 shares authorized; 38,715,746 shares issued and outstanding at March 22, 2016; 38,802,425 shares issued and outstanding at December 29, 2015 | 4 | 4 |
Additional paid-in capital | 371,981 | 372,260 |
Accumulated deficit | (826) | (3,887) |
Total shareholders’ equity | 371,159 | 368,377 |
Total liabilities and shareholders’ equity | $ 704,158 | $ 703,572 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - Successor [Member] - $ / shares | Mar. 22, 2016 | Dec. 29, 2015 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 400,000,000 | 400,000,000 |
Common stock, shares issued (in shares) | 38,715,746 | 38,802,425 |
Common stock, shares outstanding (in shares) | 38,715,746 | 38,802,425 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 22, 2016 | Mar. 24, 2015 | |
Successor [Member] | ||
Revenue: | ||
Company restaurant sales | $ 93,550 | |
Franchise revenue | 3,329 | |
Franchise sublease income | 524 | |
Total revenue | 97,403 | |
Restaurant operating expenses: | ||
Food and paper costs | 26,129 | |
Labor and related expenses | 29,784 | |
Occupancy and other operating expenses | 20,123 | |
General and administrative | 8,292 | |
Depreciation and amortization | 5,486 | |
Occupancy and other - franchise subleases | 503 | |
Pre-opening costs | 93 | |
Restaurant closure charges, net | 178 | |
Loss on disposal of assets | 75 | |
Total operating expenses | 90,663 | |
Income from operations | 6,740 | |
Other expenses: | ||
Interest expense | 1,472 | |
Transaction-related costs | 65 | |
Debt modification costs | 0 | |
Change in fair value of warrant liability | 0 | |
Total other expenses | 1,537 | |
Income (loss) from operations before provision for income taxes | 5,203 | |
Provision for income taxes | 2,142 | |
Net income (loss) | 3,061 | |
Other comprehensive income (loss): | ||
Change in fair value of interest rate cap | 0 | |
Reclassification of interest rate cap amortization included in net income (loss) | 0 | |
Total other comprehensive income, net | 0 | |
Comprehensive income (loss) | $ 3,061 | |
Earnings (loss) per share: | ||
Basic (in dollars per share) | $ 0.08 | |
Diluted (in dollars per share) | $ 0.08 | |
Weighted-average shares outstanding | ||
Basic (in shares) | 38,798,014 | |
Diluted (in shares) | 38,798,301 | |
Predecessor [Member] | ||
Revenue: | ||
Company restaurant sales | $ 90,883 | |
Franchise revenue | 3,001 | |
Franchise sublease income | 534 | |
Total revenue | 94,418 | |
Restaurant operating expenses: | ||
Food and paper costs | 25,982 | |
Labor and related expenses | 27,923 | |
Occupancy and other operating expenses | 20,034 | |
General and administrative | 7,296 | |
Depreciation and amortization | 3,792 | |
Occupancy and other - franchise subleases | 505 | |
Pre-opening costs | 119 | |
Restaurant closure charges, net | 22 | |
Loss on disposal of assets | 0 | |
Total operating expenses | 85,673 | |
Income from operations | 8,745 | |
Other expenses: | ||
Interest expense | 6,811 | |
Transaction-related costs | 6,316 | |
Debt modification costs | 135 | |
Change in fair value of warrant liability | (35) | |
Total other expenses | 13,227 | |
Income (loss) from operations before provision for income taxes | (4,482) | |
Provision for income taxes | 458 | |
Net income (loss) | (4,940) | |
Other comprehensive income (loss): | ||
Change in fair value of interest rate cap | (21) | |
Reclassification of interest rate cap amortization included in net income (loss) | 22 | |
Total other comprehensive income, net | 1 | |
Comprehensive income (loss) | $ (4,939) | |
Earnings (loss) per share: | ||
Basic (in dollars per share) | $ (1.21) | |
Diluted (in dollars per share) | $ (1.21) | |
Weighted-average shares outstanding | ||
Basic (in shares) | 4,074,498 | |
Diluted (in shares) | 4,074,498 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 22, 2016 | Mar. 24, 2015 | |
Successor [Member] | ||
Operating activities | ||
Net income (loss) | $ 3,061 | |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 5,486 | |
Amortization of favorable and unfavorable lease assets and liabilities, net | (140) | |
Amortization of deferred financing costs | 89 | |
Subordinated note interest paid-in-kind | 0 | |
Debt modification costs | 0 | |
Stock-based compensation | 699 | |
Change in fair value of warrant liability | 0 | |
Deferred income taxes | 1,100 | |
Loss on disposal of assets | 75 | |
Charges for accretion in current period | 124 | |
Changes in operating assets and liabilities: | ||
Accounts and other receivables, net | 589 | |
Inventories | 280 | |
Prepaid expenses and other current assets | 1,026 | |
Accounts payable | (854) | |
Other accrued liabilities | (1,372) | |
Other non-current liabilities | (937) | |
Net cash provided by (used in) operating activities | 9,226 | |
Investing activities | ||
Purchases of property and equipment | (4,357) | |
Proceeds from disposal of property and equipment | 7 | |
Purchases of other assets | (267) | |
Net cash used in investing activities | (4,617) | |
Financing activities | ||
Proceeds from term loan, net of debt discount | 0 | |
Proceeds from issuance of common stock | 0 | |
Repurchase of common stock | (978) | |
Payment of tax withholding related to option exercises and distribution of restricted stock units | 0 | |
Payments on capital leases and deemed landlord financing | (421) | |
Payment on subordinated notes | 0 | |
Proceeds from revolving credit facility, net of debt discount | 0 | |
Payments for debt issue costs | 0 | |
Net cash (used in) provided by financing activities | (1,399) | |
Increase in cash and cash equivalents | 3,210 | |
Cash and cash equivalents at beginning of period | 10,194 | |
Cash and cash equivalents at end of period | 13,404 | |
Supplemental cash flow information: | ||
Cash paid during the period for interest | 1,505 | |
Cash paid (received) during the period for income taxes | 5 | |
Supplemental schedule of non-cash activities: | ||
Accrued property and equipment purchases | 1,961 | |
Write-offs of accounts receivables | 72 | |
Amortization of interest rate cap into net loss, net of tax | 0 | |
Change in other asset for fair value of interest rate cap recorded to other comprehensive loss, net | 0 | |
Warrant liability reclassified to equity upon exercise of warrants | $ 0 | |
Predecessor [Member] | ||
Operating activities | ||
Net income (loss) | $ (4,940) | |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 3,793 | |
Amortization of favorable and unfavorable lease assets and liabilities, net | (1) | |
Amortization of deferred financing costs | 371 | |
Subordinated note interest paid-in-kind | 37 | |
Debt modification costs | 135 | |
Stock-based compensation | 532 | |
Change in fair value of warrant liability | (35) | |
Deferred income taxes | 0 | |
Loss on disposal of assets | 0 | |
Charges for accretion in current period | 0 | |
Changes in operating assets and liabilities: | ||
Accounts and other receivables, net | 608 | |
Inventories | 97 | |
Prepaid expenses and other current assets | 1,161 | |
Accounts payable | 2,114 | |
Other accrued liabilities | (3,069) | |
Other non-current liabilities | (1,554) | |
Net cash provided by (used in) operating activities | (751) | |
Investing activities | ||
Purchases of property and equipment | (5,333) | |
Proceeds from disposal of property and equipment | 0 | |
Purchases of other assets | (209) | |
Net cash used in investing activities | (5,542) | |
Financing activities | ||
Proceeds from term loan, net of debt discount | 23,654 | |
Proceeds from issuance of common stock | 91,236 | |
Repurchase of common stock | 0 | |
Payment of tax withholding related to option exercises and distribution of restricted stock units | (7,533) | |
Payments on capital leases and deemed landlord financing | (384) | |
Payment on subordinated notes | (108,113) | |
Proceeds from revolving credit facility, net of debt discount | 10,000 | |
Payments for debt issue costs | (589) | |
Net cash (used in) provided by financing activities | 8,271 | |
Increase in cash and cash equivalents | 1,978 | |
Cash and cash equivalents at beginning of period | 8,553 | |
Cash and cash equivalents at end of period | 10,531 | |
Supplemental cash flow information: | ||
Cash paid during the period for interest | 6,190 | |
Cash paid (received) during the period for income taxes | (2) | |
Supplemental schedule of non-cash activities: | ||
Accrued property and equipment purchases | 1,439 | |
Write-offs of accounts receivables | 0 | |
Amortization of interest rate cap into net loss, net of tax | 22 | |
Change in other asset for fair value of interest rate cap recorded to other comprehensive loss, net | (21) | |
Warrant liability reclassified to equity upon exercise of warrants | $ 8,274 |
Description of Business
Description of Business | 3 Months Ended |
Mar. 22, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business Del Taco Restaurants, Inc. (f/k/a Levy Acquisition Corp. (“LAC”)) is a Delaware corporation headquartered in Lake Forest, California. The consolidated financial statements include the accounts of Del Taco Restaurants, Inc. and its wholly owned subsidiaries (collectively, the “Company” or “Del Taco”). The Company develops, franchises, owns, and operates Del Taco quick-service Mexican-American restaurants. At March 22, 2016 (Successor), there were 297 company-operated and 246 franchised Del Taco restaurants located in 17 states, including one franchised unit in Guam. At March 24, 2015 (Predecessor), there were 304 company-operated and 242 franchised Del Taco restaurants located in 16 states, including one franchised unit in Guam. The Company was originally incorporated in Delaware on August 2, 2013 as a special purpose acquisition company, formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses. On June 30, 2015 (the “Closing Date”), the Company consummated its business combination with Del Taco Holdings, Inc. (“DTH”) pursuant to the agreement and plan of merger dated as of March 12, 2015 by and among LAC, Levy Merger Sub, LLC (“Levy Merger Sub”), LAC’s wholly owned subsidiary, and DTH (the “Merger Agreement”). Under the Merger Agreement, Levy Merger Sub merged with and into DTH, with DTH surviving the merger as a wholly-owned subsidiary of the Company (the “Business Combination” or “Merger”). In connection with the closing of the Business Combination, the Company changed its name from Levy Acquisition Corp. to Del Taco Restaurants, Inc. See Note 3 for further discussion of the Business Combination. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 22, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and the rules and regulations of Securities and Exchange Commission (“SEC”). For additional information, these consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 29, 2015 ("2015 Form 10-K"). The accounting policies used in preparing these consolidated financial statements are the same as those described in our 2015 Form 10-K. As a result of the Business Combination, the Company is the acquirer for accounting purposes, and DTH is the acquiree and accounting predecessor. The Company’s financial statement presentation distinguishes a “Predecessor” for DTH for periods prior to the Closing Date. The Company is the “Successor” for periods after the Closing Date, which includes consolidation of DTH subsequent to the Business Combination on June 30, 2015. The Merger was accounted for as a business combination using the acquisition method of accounting, and the Successor financial statements reflect a new basis of accounting that is based on the fair value of the net assets acquired. See Note 3 for further discussion of the Business Combination. As a result of the application of the acquisition method of accounting as of the Closing Date, the financial statements for the Predecessor period and for the Successor period are presented on a different basis and are therefore, not comparable. The historical financial information of Del Taco, formerly LAC, prior to the Business Combination have not been reflected in the financial statements as those amounts have been considered de-minimus. The Company’s fiscal year ends on the Tuesday closest to December 31. Fiscal year 2016 is the fifty-three week period ended January 3, 2017 (Successor). Fiscal year 2015 is the fifty-two week period ended December 29, 2015 (Successor). In a fifty-three week fiscal year, the first, second and third quarters each include twelve weeks of operations and the fourth quarter includes seventeen weeks of operations. In a fifty-two week fiscal year, the first, second and third quarters each include twelve weeks of operations and the fourth quarter includes sixteen weeks of operations. For fiscal year 2016 , the Company’s accompanying financial statements reflect the twelve weeks ended March 22, 2016 (Successor). For fiscal year 2015 , the Company’s accompanying financial statements reflect the twelve weeks ended March 24, 2015 (Predecessor). In the opinion of management, the accompanying consolidated financial statements reflect all adjustments which are necessary for a fair presentation of the consolidated financial position, results of operations and cash flows for the periods presented. The results of operations for such interim periods are not necessarily indicative of results of operations to be expected for the full fiscal year. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly and majority owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Management believes that such estimates have been based on reasonable and supportable assumptions and the resulting estimates are reasonable for use in the preparation of the consolidated financial statements. Actual results could differ from these estimates. The Company’s significant estimates include estimates for impairment of goodwill, intangible assets and property and equipment, valuations provided in business combinations, insurance reserves, restaurant closure reserves, stock-based compensation, contingent liabilities, certain leasing activities and income tax valuation allowances. Recently Issued Accounting Standards In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which provides a comprehensive new revenue recognition model that requires a company to recognize revenue in an amount that reflects the consideration it expects to receive for the transfer of promised goods or services to its customers. The standard also requires additional disclosure regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. This ASU is effective for annual periods and interim periods beginning after December 15, 2017. The ASU is to be applied retrospectively or using a cumulative effect transition method. The Company is currently evaluating which transition method to use and the effect that this pronouncement will have on its consolidated financial statements and related disclosures. |
Business Combination
Business Combination | 3 Months Ended |
Mar. 22, 2016 | |
Business Combinations [Abstract] | |
Business Combination | Business Combination On June 30, 2015 , the Company and DTH completed the Business Combination pursuant to the Merger Agreement under which the Company’s wholly-owned subsidiary, Levy Merger Sub, merged with and into DTH, with DTH surviving the merger as a wholly-owned subsidiary of the Company. Concurrent with the execution of the Merger Agreement, Levy Epic Acquisition Company, LLC (“Levy Newco”), Levy Epic Acquisition Company II, LLC (“Levy Newco II” and with Levy Newco, the “Levy Newco Parties”), DTH and the DTH stockholders entered into a stock purchase agreement (the “Stock Purchase Agreement”). Pursuant to the Stock Purchase Agreement, the Levy Newco Parties agreed to purchase 2,348,968 shares of DTH common stock from DTH for $91.2 million in cash, and to purchase 740,564 shares of DTH common stock directly from existing DTH shareholders for $28.8 million in cash (the “Initial Investment”). As a result of this Initial Investment, an aggregate of 3,089,532 shares of DTH common stock was purchased by the Levy Newco Parties for total cash consideration of $120.0 million . The total purchase price paid to DTH stockholders (except for the Levy NewCo Parties) was $284.3 million . The closing of the Business Combination and the Initial Investment were accounted for as related events transferring control of DTH to the Company through a minority investment in the Initial Investment and a controlling interest at the closing of the Business Combination. The Company recorded a preliminary allocation of the purchase price to DTH’s tangible and identifiable intangible assets acquired and liabilities assumed based on their fair value as of the Closing Date. This allocation is subject to revision as the estimates of taxes are based on preliminary information and are subject to refinement. The preliminary purchase price allocation is as follows (in thousands): Preliminary 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 (80,280 ) Other long-term liabilities (36,208 ) Net identifiable liabilities assumed (34,777 ) Goodwill 319,082 Total gross consideration $ 284,305 During the twelve weeks ended March 22, 2016 (Successor), the Company recorded a net $0.8 million adjustment to goodwill due to a change in estimate for the liability for deferred income taxes. For the twelve weeks ended March 22, 2016 (Successor) and the twelve weeks ended March 24, 2015 (Predecessor), the Company incurred approximately $0.1 million and $6.3 million , respectively, of transaction expenses directly related to the Business Combination. |
Restaurant Closure Charges, Net
Restaurant Closure Charges, Net | 3 Months Ended |
Mar. 22, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restaurant Closure Charges, Net | Restaurant Closure Charges, Net At March 22, 2016 (Successor) and December 29, 2015 (Successor), the restaurant closure liability is $4.2 million and $4.8 million , respectively. The details of the restaurant closure activities are discussed below. Restaurant Closures and Lease Reserves The following table represents other restaurant closure liability activity related to prior restaurant closures and sublease income shortfalls (in thousands): Total Balance at December 29, 2015 (Successor) $ 1,023 Charges for accretion in current period 19 Cash payments (15 ) Balance at March 22, 2016 (Successor) $ 1,027 The current portion of the restaurant closure liability is $0.1 million at both March 22, 2016 (Successor) and December 29, 2015 (Successor), respectively, and is included in other accrued liabilities in the consolidated balance sheets. The non-current portion of the restaurant closure liability is $0.9 million at both March 22, 2016 (Successor) and December 29, 2015 (Successor), respectively, and is included in other non-current liabilities in the consolidated balance sheets. Restaurant Closure and Other Related Charges for 12 Underperforming Restaurants During the fourth fiscal quarter of 2015, the Company closed 12 company-operated restaurants. During the twelve weeks ended March 22, 2016 (Successor), the Company recorded accretion expense related to the closures as well as $0.1 million related to the write-off of fixed assets associated with the closures. A summary of the restaurant closure liability activity for these 12 closed restaurants consisted of the following (in thousands): Contract termination costs Other associated costs Total Balance at December 29, 2015 (Successor) $ 3,637 $ 163 $ 3,800 Charges for accretion in current period 35 — 35 Cash payments (484 ) (129 ) (613 ) Balance at March 22, 2016 (Successor) $ 3,188 $ 34 $ 3,222 The current portion of the restaurant closure liability is $1.5 million at both March 22, 2016 (Successor) and December 29, 2015 (Successor), respectively, and is included in other accrued liabilities in the consolidated balance sheets. The non-current portion of the restaurant closure liability is $1.7 million and $2.3 million at March 22, 2016 (Successor) and December 29, 2015 (Successor), respectively, and is included in other non-current liabilities in the consolidated balance sheets. |
Goodwill and other Intangible A
Goodwill and other Intangible Assets | 3 Months Ended |
Mar. 22, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and other Intangible Assets | Goodwill and other Intangible Assets Goodwill was $319.1 million at March 22, 2016 (Successor) compared to $318.3 million at December 29, 2015 (Successor). The increase was due to an adjustment to the preliminary purchase price allocation as described in more detail in Note 3. There have been no changes in the carrying amount of trademarks since December 29, 2015 (Successor). The Company’s other intangible assets at March 22, 2016 (Successor) and December 29, 2015 (Successor) consisted of the following (in thousands): Successor March 22, 2016 December 29, 2015 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Favorable lease assets $ 14,207 $ (1,483 ) $ 12,724 $ 14,207 $ (1,020 ) $ 13,187 Franchise rights 15,789 (1,032 ) 14,757 15,897 (711 ) 15,186 Total amortized other intangible assets $ 29,996 $ (2,515 ) $ 27,481 $ 30,104 $ (1,731 ) $ 28,373 Goodwill and intangible assets at March 22, 2016 (Successor) and December 29, 2015 (Successor) are based on the preliminary purchase price allocation of DTH, which is based on preliminary valuations performed to determine the fair value of the acquired assets as of the acquisition date. See Note 3 for further discussion of the acquisition of DTH. Two franchise locations closed during the first fiscal quarter of 2016 and accordingly, the Company wrote-off $0.1 million of franchise rights during the twelve weeks ended March 22, 2016 (Successor). |
Debt, Obligations Under Capital
Debt, Obligations Under Capital Leases and Deemed Landlord Financing Liabilities | 3 Months Ended |
Mar. 22, 2016 | |
Debt Disclosure [Abstract] | |
Debt, Obligations Under Capital Leases and Deemed Landlord Financing Liabilities | Debt, Obligations Under Capital Leases and Deemed Landlord Financing Liabilities The Company’s long-term debt, capital lease obligations and deemed landlord financing liabilities at March 22, 2016 (Successor) and December 29, 2015 (Successor) consisted of the following (in thousands): Successor March 22, 2016 December 29, 2015 2015 Senior Credit Facility, net of debt discount of $1,261 and $1,328 and deferred financing costs of $426 and $448 at March 22, 2016 (Successor) and December 29, 2015 (Successor), respectively $ 152,313 $ 152,224 Total outstanding indebtedness 152,313 152,224 Obligations under capital leases and deemed landlord financing liabilities 17,048 17,469 Total debt 169,361 169,693 Less: amounts due within one year 1,684 1,725 Total amounts due after one year, net $ 167,677 $ 167,968 At March 22, 2016 (Successor) and December 29, 2015 (Successor), the Company assessed the amounts recorded under the 2015 Senior Credit Facility and determined that such amounts approximated fair value. 2015 Revolving Credit Facility (Successor) On August 4, 2015 , the Company refinanced its existing senior credit facility (“2013 Senior Credit Facility”) and entered into a new credit agreement (the “Credit Agreement”). The Credit Agreement, which matures on August 4, 2020 , provides for a $250 million revolving credit facility (the “2015 Senior Credit Facility”). The Company utilized $164 million of proceeds from the Credit Agreement to refinance in total its 2013 Senior Credit Facility and pay costs associated with the refinancing. The 2013 Senior Credit Facility, as amended March 20, 2015, totaled $267.1 million , consisting of an initial $227.1 million term loan (“2013 Term Loan”) and a $40 million revolver (“2013 Revolver”). At the time of the refinance, a $162.5 million term loan balance was outstanding and $17.6 million of revolver capacity was utilized to support outstanding letters of credit under the 2013 Senior Credit Facility. At the Company’s option, loans under the 2015 Senior Credit Facility may bear interest at a base rate or LIBOR, plus an applicable margin determined in accordance with a consolidated total lease adjusted leverage ratio-based pricing grid. The base rate is calculated as the highest of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the prime rate of Bank of America, and (c) LIBOR plus 1.00% . For LIBOR loans, the applicable margin is in the range of 1.50% to 2.50% , and for base rate loans the applicable margin is in the range of 0.50% and 1.50% . The applicable margin was initially set at 2.00% for LIBOR loans and at 1.00% for base rate loans until delivery of financial statements and a compliance certificate for the fourth fiscal quarter ending after the closing date of the Credit Agreement. Following delivery of financial statements and a compliance certificate for the fourth fiscal quarter ending December 29, 2015 (Successor), the applicable margin decreased 0.25% for both LIBOR loans and base rate loans during the first fiscal quarter of 2016. The 2015 Senior Credit Facility capacity used to support letters of credit currently incurs fees equal to the applicable margin of 1.75% . The 2015 Senior Credit Facility unused commitment currently incurs a 0.20% fee. The Credit Agreement contains certain financial covenants, including the maintenance of a consolidated total lease adjusted leverage ratio and a consolidated fixed charge coverage ratio. The Company was in compliance with the financial covenants as of March 22, 2016 (Successor). Substantially all of the assets of the Company are pledged as collateral under the 2015 Senior Credit Facility. The Company capitalized lender costs and deferred financing costs of $1.4 million and $0.5 million , respectively, in connection with the refinancing. Lender debt discount costs and deferred financing costs associated with the 2015 Senior Credit Facility are presented net of the 2015 Senior Credit Facility balance on the consolidated balance sheets and will be amortized to interest expense over the term of the 2015 Senior Credit Facility. Amortization of deferred financing costs and debt discount related to the 2015 Senior Credit Facility totaled $0.1 million during the twelve weeks ended March 22, 2016 (Successor). At March 22, 2016 (Successor), the weighted-average interest rate on the outstanding balance of the Senior Credit Facility was 2.2% . At March 22, 2016 (Successor), the Company had a total of $77.0 million of availability for additional borrowings under the 2015 Senior Credit Facility as the Company had $154.0 million of outstanding borrowings and letters of credit outstanding of $19.0 million which reduce availability under the 2015 Senior Credit Facility. DTH 2013 Senior Credit Facility In March 2015, DTH amended its 2013 Senior Credit Facility to increase the 2013 Term Loan by $25.1 million to $227.1 million (the “March 2015 Debt Refinance”). A portion of the proceeds from Step 1 of the Business Combination, described in Note 3, proceeds of $10 million from the 2013 Revolver and the March 2015 Debt Refinance proceeds were used to fully redeem the then outstanding balance of the subordinated notes of $111.2 million . On March 12, 2015, DTH satisfied the rating condition in its 2013 Senior Credit Facility resulting in a decrease in interest rate to LIBOR (not to be less than 1.00% ) plus a margin of 4.25% . The Company incurred lender costs and third-party costs associated with the March 2015 Debt Refinance of $1.6 million of which $1.5 million was capitalized as lender debt discount and $0.1 million was expensed as debt modification costs in the consolidated statements of comprehensive income (loss) for the twelve weeks ended March 24, 2015 (Predecessor). Lender debt discount costs and deferred financing costs associated with the 2013 Senior Credit Facility were amortized to interest expense over the term of the 2013 Term Loan using the effective interest method. Amortization of deferred financing costs including debt discount totaled $0.4 million during the twelve weeks ended March 24, 2015 (Predecessor). Subordinated Notes (Predecessor) In connection with Step 1 of the Business Combination and the March 2015 Debt Refinance discussed above, DTH fully redeemed the outstanding balance of the Sagittarius Restaurants LLC (SAG Restaurants) subordinated notes (“SAG Restaurants Sub Notes”) and F&C Restaurant Holding Co. (F&C RHC) subordinated notes (“F&C RHC Sub Notes”) on March 20, 2015 of $111.2 million . For the twelve weeks ended March 24, 2015 (Predecessor), interest expense related to the SAG Restaurants Sub Notes and F&C RHC Sub Notes was $3.1 million . |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Mar. 22, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments As of March 22, 2016 (Successor) and December 29, 2015 (Successor), the Company had an interest rate cap agreement to hedge cash flows associated with interest rate fluctuations on variable rate debt. This agreement had a notional amount of $87.5 million as of March 22, 2016 (Successor) and December 29, 2015 (Successor). The individual caplet contracts within the remaining interest rate cap agreement expire at various dates through June 30, 2016. Interest Rate Cap Agreement To ensure the effectiveness of the interest rate cap agreement through June 30, 2015 (Predecessor) , the Company elected the three-month LIBOR rate option for its variable rate interest payments on term balances equal to or in excess of the applicable notional amount of the interest rate cap agreement as of each reset date. The reset dates and other critical terms on the term loans perfectly match with the interest rate cap reset dates and other critical terms during the twelve weeks ended March 24, 2015 (Predecessor). As of the July 1, 2015 interest reset date, the Company elected the one-month LIBOR rate option for its variable rate interest payments on term balances equal to or in excess of the applicable notional amount of the interest rate cap agreement, and as a result, this hedge became ineffective. Therefore, after July 1, 2015, any changes in fair value will be recorded through interest expense. For the twelve weeks ended March 22, 2016 (Successor), there have been no changes in the fair value of the interest rate cap agreement. The effective portion of the interest rate cap agreement through June 30, 2015 (Predecessor) was included in accumulated other comprehensive income and included as a fair value adjustment through the purchase price allocation as described in Note 3. Warrant Liability (Predecessor) On March 20, 2015, warrants to purchase 597,802 shares of DTH common stock held by a former large shareholder of DTH were exercised at a strike price of $25.00 per share based on a fair value of $8.3 million determined based on the common stock price of the Initial Investment discussed above in Note 3. Upon exercise, 384,777 shares of DTH common stock were redeemed as payment for the strike price resulting in 213,025 shares of DTH common stock being issued. DTH recorded a mark-to-market adjustment of $35,000 to reduce the liability during the twelve weeks ended March 24, 2015 (Predecessor) and then reclassified the balance of the warrant liability of $8.3 million to shareholders’ equity. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 22, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The fair values of cash and cash equivalents, accounts receivable, accounts payable and other accrued liabilities approximate their carrying amounts due to their short maturities. The carrying value of the 2015 Senior Credit Facility approximated fair value. The interest rate cap agreement is recorded at fair value in the Company’s consolidated balance sheets. As of March 22, 2016 (Successor) and December 29, 2015 (Successor), the Company held certain assets and liabilities that are required to be measured at fair value on a recurring basis. For both periods, these included derivative instruments related to interest rates. The Company determined the fair values of the interest rate cap contracts based on counterparty quotes, with appropriate adjustments for any significant impact of nonperformance risk of the parties to the interest rate cap contracts. Therefore, the Company has categorized these interest rate cap contracts as Level 2 fair value measurements. The fair value of the interest rate cap agreement was zero at March 22, 2016 (Successor) and December 29, 2015 (Successor). The following is a summary of the estimated fair values for the long-term debt instruments (in thousands): Successor March 22, 2016 December 29, 2015 Estimated Fair Value Book Value Estimated Fair Value Book Value 2015 Senior Credit Facility $ 152,313 $ 152,313 $ 152,224 $ 152,224 |
Other Accrued Liabilities and O
Other Accrued Liabilities and Other Non-current Liabilities | 3 Months Ended |
Mar. 22, 2016 | |
Other Liabilities Disclosure [Abstract] | |
Other Accrued Liabilities and Other Non-current Liabilities | Other Accrued Liabilities and Other Non-current Liabilities A summary of other accrued liabilities follows (in thousands): Successor March 22, 2016 December 29, 2015 Employee compensation and related items $ 8,198 $ 7,818 Accrued insurance 7,289 7,168 Accrued sales tax 5,006 3,604 Accrued advertising 1,725 999 Accrued real property tax 1,676 1,378 Restaurant closure liability 1,671 1,617 Accrued income taxes 1,067 30 Accrued bonus 914 5,352 Other 3,977 4,931 $ 31,523 $ 32,897 A summary of other non-current liabilities follows (in thousands): Successor March 22, 2016 December 29, 2015 Unfavorable lease liabilities $ 19,082 $ 19,685 Insurance reserves 6,034 5,963 Restaurant closure liability 2,578 3,206 Unearned trade discount, non-current 1,939 2,028 Deferred development and initial franchise fees 1,907 1,920 Deferred gift card income 1,714 2,217 Deferred rent liability 933 731 Other 522 501 $ 34,709 $ 36,251 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 22, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation In connection with the approval of the Business Combination, the Del Taco Restaurants, Inc. 2015 Omnibus Incentive Plan (the “2015 Plan”) was approved by shareholders to offer eligible employees, directors and consultants cash and stock-based incentive awards. Awards under the 2015 Plan are generally not restricted to any specific form or structure and could include, without limitation, stock options, stock appreciation rights, restricted stock, other stock-based awards, other cash-based compensation and performance awards. Under the plan, there were 3,300,000 share of common stock reserved and authorized. At March 22, 2016 (Successor), there were 2,077,506 shares of common stock available for grant under the 2015 Plan. Stock-Based Compensation Expense (Successor) The total compensation expense related to the 2015 Plan was $0.7 million for the twelve weeks ended March 22, 2016 (Successor). As of March 22, 2016 (Successor), $9.5 million of total unrecognized expense, net of estimated forfeitures, related to share-based compensation plans is expected to be recognized over a weighted-average remaining period of 3.2 years . Restricted Stock Awards (Successor) A summary of outstanding and unvested restricted stock activity as of March 22, 2016 (Successor) and changes during the period December 29, 2015 (Successor) through March 22, 2016 (Successor) is as follows: Shares Weighted-Average Grant Date Fair Value Nonvested at December 29, 2015 (Successor) 946,494 $ 11.16 Granted 45,000 10.64 Vested — — Forfeited — — Nonvested at March 22, 2016 (Successor) 991,494 $ 11.14 As of March 22, 2016 (Successor), $8.8 million of total unrecognized expense related to unvested restricted stock grants is expected to be recognized over a weighted-average period of 3.2 years . The fair value of these awards was determined based on the Company’s stock price on the grant date. Stock Options (Successor) A summary of stock option activity as of March 22, 2016 (Successor) and changes during the period December 29, 2015 (Successor) through March 22, 2016 (Successor) is as follows: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in years) (in thousands) Options outstanding at December 29, 2015 (Successor) 224,000 $ 10.40 6.5 $ 67 Granted 7,000 9.88 6.8 — Exercised — — — — Forfeited (2,000 ) 10.40 — — Options outstanding at March 22, 2016 (Successor) 229,000 $ 10.38 6.3 $ 86 Options exercisable at March 22, 2016 (Successor) — $ — — $ — Options exercisable and expected to vest at March 22, 2016 (Successor) 213,772 $ 10.38 6.3 $ 80 The aggregate intrinsic value in the table above is the amount by which the current market price of the Company's stock on December 29, 2015 (Successor) or March 22, 2016 (Successor), respectively, exceeds the exercise price. As of March 22, 2016 (Successor), $0.7 million of total unrecognized stock compensation expense, net of forfeitures, related to stock option grants is expected to be recognized over a weighted average period of 3.3 years . Stock-Based Compensation Expense (Predecessor) In connection with Step 1 of the Business Combination consummated on March 20, 2015, all unvested restricted stock units (“RSUs”) under the Predecessor incentive plan became fully vested and all vested RSUs were then immediately settled for shares of DTH common stock, net of shares withheld for minimum statutory employee tax withholding obligations and all unvested stock options under the Predecessor plan became fully vested and all vested stock options were also exercised and shares were issued, net of shares withheld for the applicable option strike price and employee tax withholding obligations. An aggregate of 237,948 shares of DTH common stock were issued and 247,552 shares of DTH common stock were redeemed for applicable option strike price and employee tax withholding obligations. In exchange for the shares withheld, DTH made payments of $7.5 million related to employee tax withholding obligations. No RSUs or stock options remained outstanding under the Predecessor plan after March 20, 2015 or as of March 22, 2016 (Successor). DTH recorded stock-based compensation expense of $0.5 million , which included all remaining unrecognized compensation expense related to the accelerated vesting on RSUs and stock options on March 20, 2015, for the twelve weeks ended March 24, 2015 (Predecessor). |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 22, 2016 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity On February 26, 2016, the Company's Board of Directors authorized a share repurchase program covering up to $25.0 million of the Company's common stock and warrants which was effective immediately and expires upon completion of the repurchase program, unless terminated earlier by the Board of Directors. Purchases under the program may be made in open market or privately negotiated transactions. During the twelve weeks ended March 22, 2016 (Successor), the Company repurchased 86,679 shares for an average price per share of $10.79 for an aggregate cost of approximately $1.0 million including incremental direct costs to acquire the shares. The Company expects to retire the repurchased shares and therefore has accounted for them as constructively retired as of March 22, 2016 (Successor). As of March 22, 2016 (Successor), there was approximately $24.1 million remaining under the share repurchase program. The Company has no obligations to repurchase shares under this authorization, and the timing and value of shares purchased will depend on the Company's stock price, market conditions and other factors. |
Earnings per Share
Earnings per Share | 3 Months Ended |
Mar. 22, 2016 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share Basic income (loss) per share is calculated by dividing net income (loss) attributable to Del Taco’s common shareholders for the Successor period and to DTH’s common shareholders for the Predecessor period by the weighted average number of common shares outstanding for the period. In computing dilutive income (loss) per share, basic income (loss) per share is adjusted for the assumed issuance of all applicable potentially dilutive share-based awards, including warrants, restricted stock, common stock options and restricted stock units. Below are basic and diluted net income (loss) per share for the periods indicated (amounts in thousands except share and per share data): Successor Predecessor 12 Weeks Ended 12 Weeks Ended Numerator: Net income (loss) $ 3,061 $ (4,940 ) Denominator: Weighted-average shares outstanding - basic 38,798,014 4,074,498 Dilutive effect of restricted stock and RSUs 287 — Dilutive effect of stock options — — Dilutive effect of warrants — — Weighted-average shares outstanding - diluted 38,798,301 4,074,498 Net income (loss) per share - basic $ 0.08 $ (1.21 ) Net income (loss) per share - diluted $ 0.08 $ (1.21 ) Antidilutive stock options, unvested restricted stock awards, unvested RSUs and warrants excluded from the computations 1,924,162 284,017 Antidilutive stock options and unvested restricted stock were excluded from the computation of diluted net income (loss) per share due to the assumed proceeds from the award’s exercise or vesting being greater than the average market price of the common shares or due to the Company incurring net losses for the periods presented. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 22, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective income tax rates were 41.2% for the twelve weeks ended March 22, 2016 (Successor) compared to 10.2% for the twelve weeks ended March 24, 2015 (Predecessor), respectively. The provision for income taxes consisted of income tax expense of $2.1 million for the twelve weeks ended March 22, 2016 (Successor) and $0.5 million for the twelve weeks ended March 24, 2015 (Predecessor), respectively. The income tax expense related to the twelve weeks ended March 22, 2016 (Successor) is driven by the estimated effective income tax rate of 41.2% which primarily consists of statutory federal and state tax rates based on apportioned income, as well as providing for deferred tax liabilities for the excess of the amount for financial reporting over the tax basis of an investment in a domestic subsidiary, partially offset by federal targeted job credits. The income tax expense related to the twelve weeks ended March 24, 2015 (Predecessor) primarily related to the increase in deferred tax liabilities for indefinite-lived assets and the related effect of maintaining a full valuation allowance against certain of deferred tax assets as of March 24, 2015 (Predecessor). |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 22, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The primary claims in the Company’s business are workers’ compensation and general liabilities. These insurance programs are self-insured or high deductible programs with excess coverage that management believes is sufficient to adequately protect the Company. In the opinion of management, adequate provision has been made for all incurred claims up to the self-insured or high deductible limits, including provision for estimated claims incurred but not reported. Because of the uncertainty of the ultimate resolution of outstanding claims, as well as the uncertainty regarding claims incurred but not reported, it is possible that management’s provision for these losses could change materially. However, no estimate can currently be made of the range of additional losses. Purchasing Commitments The Company enters into various purchase obligations in the ordinary course of business, generally of short term nature. Those that are binding primarily relate to commitments for food purchases and supplies, amounts owed under contractor and subcontractor agreements, orders submitted for equipment for restaurants under construction, information technology service agreements and marketing initiatives, some of which are related to both Company-operated and franchised locations. The Company also has a long-term beverage supply agreement with a major beverage vendor whereby marketing rebates are provided to the Company and its franchisees based upon the volumes of purchases for system-wide restaurants which vary according to demand for beverage syrup. This contract has terms extending into 2021 . The Company’s future estimated cash payments under existing contractual purchase obligations for goods and services as of March 22, 2016 (Successor), are approximately $86.4 million . The Company has excluded agreements that are cancelable without penalty. Litigation On April 23, 2015, a purported class action and derivative complaint, Jeffery Tomasulo, on behalf of himself and all others similarly situated v. Levy Acquisition Sponsor, LLC, Lawrence F. Levy, Howard B. Bernick, Marc S. Simon, Craig J. Duchossois, Ari B. Levy, Steven C. Florsheim, Gregory G. Flynn, Del Taco Holdings, Inc., and Levy Acquisition Corp. (“Complaint”), was filed in the Circuit Court of Cook County, Illinois (the “Circuit Court”), relating to the then proposed Business Combination pursuant to the Merger Agreement. The Complaint, which purported to be brought as a class action on behalf of all of the holders of the Company’s common stock, generally alleged that the Company’s pre-merger directors breached their fiduciary duties to stockholders by facilitating the then proposed Business Combination and in negotiating and approving the Merger Agreement. The Complaint also alleged that the Company’s preliminary proxy statement that was filed with the SEC on April 2, 2015 is materially misleading and/or incomplete. The Complaint further alleged that DTH and Levy Acquisition Sponsor LLC aided and abetted the alleged breaches by the Company’s pre-merger directors. The Complaint sought (a) a declaration that the Company’s pre-merger directors breached their fiduciary duties; (b) injunctive relief enjoining the Business Combination until corrective disclosures were made; (c) compensatory and/or rescissory damages; and (d) an award of costs and attorney’s fees. The Company previously reached a settlement in principle of all claims asserted in the Complaint, subject to negotiation of a definitive settlement agreement and approval by the Circuit Court. To date, the parties have been unable to finalize a definitive settlement agreement. The Plaintiff has informed the Court that he wishes to file an amended complaint revising his claims, and the Court gave Plaintiff until May 5, 2016 to file a motion for leave to file an amended complaint. The Company has a directors and officers liability insurance policy to cover legal defense costs and settlements stemming from covered claims, subject to an insurance deductible of $0.25 million per claim. The Company's insurance company has acknowledged coverage for claims asserted in the Complaint against covered persons, subject to a reservation of rights. The Company anticipates that any attorney's fees or expenses awarded by the Court in connection with any settlement will be paid in full by the insurance company, together with all or substantially all of any additional legal fees that may be incurred in connection with the action. As of December 29, 2015 (Successor), the Company had an insurance receivable of $0.3 million for legal defense costs it paid in excess of the deductible. The reimbursement from the insurance company was received in January 2016. During the twelve weeks ended March 22, 2016 (Successor), the Company has incurred $0.2 million in legal defense fees for which the Company has recorded a corresponding insurance receivable of $0.2 million as of March 22, 2016 (Successor). In July 2013, a former Del Taco employee filed a purported class action complaint alleging that Del Taco has failed to pay overtime wages and has not appropriately provided meal breaks to its California general managers. Discovery has been completed and the parties are preparing their motions for and opposition to class certification. Del Taco has several defenses to the action that it believes should prevent the certification of the class, as well as the potential assessment of any damages on a class basis. Legal proceedings are inherently unpredictable, and the Company is not able to predict the ultimate outcome or cost of the unresolved matter. However, based on management’s current understanding of the relevant facts and circumstances, the Company does not believe that these proceedings give rise to a probable or estimable loss and should not have a material adverse effect on the Company’s financial position, operations or cash flows. Therefore, Del Taco has not recorded any amount for the claim as of March 22, 2016 (Successor). In March 2014, a former Del Taco employee filed a purported class action complaint alleging that Del Taco has not appropriately provided meal breaks and failed to pay wages to its California hourly employees. Discovery is in process and Del Taco intends to assert all of its defenses to this threatened class action and the individual claims. Del Taco has several defenses to the action that it believes should prevent the certification of the class, as well as the potential assessment of any damages on a class basis. Legal proceedings are inherently unpredictable, and the Company is not able to predict the ultimate outcome or cost of the unresolved matter. However, based on management’s current understanding of the relevant facts and circumstances, the Company does not believe that these proceedings give rise to a probable or estimable loss and should not have a material adverse effect on the Company’s financial position, operations or cash flows. Therefore, Del Taco has not recorded any amount for the claim as of March 22, 2016 (Successor). The Company and its subsidiaries are parties to other legal proceedings incidental to their businesses, including claims alleging the Company’s restaurants do not comply with the Americans with Disabilities Act of 1990. In the opinion of management, based upon information currently available, the ultimate liability with respect to those other actions will not have a material effect on the operating results, cash flows or the financial position of the Company. |
Basis of Presentation and Sum20
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 22, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and the rules and regulations of Securities and Exchange Commission (“SEC”). For additional information, these consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 29, 2015 ("2015 Form 10-K"). The accounting policies used in preparing these consolidated financial statements are the same as those described in our 2015 Form 10-K. As a result of the Business Combination, the Company is the acquirer for accounting purposes, and DTH is the acquiree and accounting predecessor. The Company’s financial statement presentation distinguishes a “Predecessor” for DTH for periods prior to the Closing Date. The Company is the “Successor” for periods after the Closing Date, which includes consolidation of DTH subsequent to the Business Combination on June 30, 2015. The Merger was accounted for as a business combination using the acquisition method of accounting, and the Successor financial statements reflect a new basis of accounting that is based on the fair value of the net assets acquired. See Note 3 for further discussion of the Business Combination. As a result of the application of the acquisition method of accounting as of the Closing Date, the financial statements for the Predecessor period and for the Successor period are presented on a different basis and are therefore, not comparable. The historical financial information of Del Taco, formerly LAC, prior to the Business Combination have not been reflected in the financial statements as those amounts have been considered de-minimus. The Company’s fiscal year ends on the Tuesday closest to December 31. Fiscal year 2016 is the fifty-three week period ended January 3, 2017 (Successor). Fiscal year 2015 is the fifty-two week period ended December 29, 2015 (Successor). In a fifty-three week fiscal year, the first, second and third quarters each include twelve weeks of operations and the fourth quarter includes seventeen weeks of operations. In a fifty-two week fiscal year, the first, second and third quarters each include twelve weeks of operations and the fourth quarter includes sixteen weeks of operations. For fiscal year 2016 , the Company’s accompanying financial statements reflect the twelve weeks ended March 22, 2016 (Successor). For fiscal year 2015 , the Company’s accompanying financial statements reflect the twelve weeks ended March 24, 2015 (Predecessor). In the opinion of management, the accompanying consolidated financial statements reflect all adjustments which are necessary for a fair presentation of the consolidated financial position, results of operations and cash flows for the periods presented. The results of operations for such interim periods are not necessarily indicative of results of operations to be expected for the full fiscal year. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly and majority owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Management believes that such estimates have been based on reasonable and supportable assumptions and the resulting estimates are reasonable for use in the preparation of the consolidated financial statements. Actual results could differ from these estimates. The Company’s significant estimates include estimates for impairment of goodwill, intangible assets and property and equipment, valuations provided in business combinations, insurance reserves, restaurant closure reserves, stock-based compensation, contingent liabilities, certain leasing activities and income tax valuation allowances |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which provides a comprehensive new revenue recognition model that requires a company to recognize revenue in an amount that reflects the consideration it expects to receive for the transfer of promised goods or services to its customers. The standard also requires additional disclosure regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. This ASU is effective for annual periods and interim periods beginning after December 15, 2017. The ASU is to be applied retrospectively or using a cumulative effect transition method. The Company is currently evaluating which transition method to use and the effect that this pronouncement will have on its consolidated financial statements and related disclosures. |
Business Combination (Tables)
Business Combination (Tables) | 3 Months Ended |
Mar. 22, 2016 | |
Business Combinations [Abstract] | |
Schedule of Preliminary Allocation of Purchase Price to Tangible and Identifiable Intangible Assets Acquired and Liabilities Assumed Based on Fair Value | The Company recorded a preliminary allocation of the purchase price to DTH’s tangible and identifiable intangible assets acquired and liabilities assumed based on their fair value as of the Closing Date. This allocation is subject to revision as the estimates of taxes are based on preliminary information and are subject to refinement. The preliminary purchase price allocation is as follows (in thousands): Preliminary 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 (80,280 ) Other long-term liabilities (36,208 ) Net identifiable liabilities assumed (34,777 ) Goodwill 319,082 Total gross consideration $ 284,305 |
Restaurant Closure Charges, N22
Restaurant Closure Charges, Net (Tables) | 3 Months Ended |
Mar. 22, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restaurant Closure Liability Activity | The following table represents other restaurant closure liability activity related to prior restaurant closures and sublease income shortfalls (in thousands): Total Balance at December 29, 2015 (Successor) $ 1,023 Charges for accretion in current period 19 Cash payments (15 ) Balance at March 22, 2016 (Successor) $ 1,027 |
Closure Liability Activity for 12 Closed Restaurants | A summary of the restaurant closure liability activity for these 12 closed restaurants consisted of the following (in thousands): Contract termination costs Other associated costs Total Balance at December 29, 2015 (Successor) $ 3,637 $ 163 $ 3,800 Charges for accretion in current period 35 — 35 Cash payments (484 ) (129 ) (613 ) Balance at March 22, 2016 (Successor) $ 3,188 $ 34 $ 3,222 |
Goodwill and other Intangible23
Goodwill and other Intangible Assets (Tables) | 3 Months Ended |
Mar. 22, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Other Intangible Assets | The Company’s other intangible assets at March 22, 2016 (Successor) and December 29, 2015 (Successor) consisted of the following (in thousands): Successor March 22, 2016 December 29, 2015 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Favorable lease assets $ 14,207 $ (1,483 ) $ 12,724 $ 14,207 $ (1,020 ) $ 13,187 Franchise rights 15,789 (1,032 ) 14,757 15,897 (711 ) 15,186 Total amortized other intangible assets $ 29,996 $ (2,515 ) $ 27,481 $ 30,104 $ (1,731 ) $ 28,373 |
Debt, Obligations Under Capit24
Debt, Obligations Under Capital Leases and Deemed Landlord Financing Liabilities (Tables) | 3 Months Ended |
Mar. 22, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company’s long-term debt, capital lease obligations and deemed landlord financing liabilities at March 22, 2016 (Successor) and December 29, 2015 (Successor) consisted of the following (in thousands): Successor March 22, 2016 December 29, 2015 2015 Senior Credit Facility, net of debt discount of $1,261 and $1,328 and deferred financing costs of $426 and $448 at March 22, 2016 (Successor) and December 29, 2015 (Successor), respectively $ 152,313 $ 152,224 Total outstanding indebtedness 152,313 152,224 Obligations under capital leases and deemed landlord financing liabilities 17,048 17,469 Total debt 169,361 169,693 Less: amounts due within one year 1,684 1,725 Total amounts due after one year, net $ 167,677 $ 167,968 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 22, 2016 | |
Fair Value Disclosures [Abstract] | |
Summary of Estimated Fair Values of Long-term Debt Instruments, Warrant Liability and Interest Rate Cap Agreement | The following is a summary of the estimated fair values for the long-term debt instruments (in thousands): Successor March 22, 2016 December 29, 2015 Estimated Fair Value Book Value Estimated Fair Value Book Value 2015 Senior Credit Facility $ 152,313 $ 152,313 $ 152,224 $ 152,224 |
Other Accrued Liabilities and26
Other Accrued Liabilities and Other Non-current Liabilities (Tables) | 3 Months Ended |
Mar. 22, 2016 | |
Other Liabilities Disclosure [Abstract] | |
Summary of Other Accrued Liabilities | A summary of other accrued liabilities follows (in thousands): Successor March 22, 2016 December 29, 2015 Employee compensation and related items $ 8,198 $ 7,818 Accrued insurance 7,289 7,168 Accrued sales tax 5,006 3,604 Accrued advertising 1,725 999 Accrued real property tax 1,676 1,378 Restaurant closure liability 1,671 1,617 Accrued income taxes 1,067 30 Accrued bonus 914 5,352 Other 3,977 4,931 $ 31,523 $ 32,897 |
Summary of Other Non-current Liabilities | A summary of other non-current liabilities follows (in thousands): Successor March 22, 2016 December 29, 2015 Unfavorable lease liabilities $ 19,082 $ 19,685 Insurance reserves 6,034 5,963 Restaurant closure liability 2,578 3,206 Unearned trade discount, non-current 1,939 2,028 Deferred development and initial franchise fees 1,907 1,920 Deferred gift card income 1,714 2,217 Deferred rent liability 933 731 Other 522 501 $ 34,709 $ 36,251 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 22, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Outstanding and Unvested Restricted Stock Activity | A summary of outstanding and unvested restricted stock activity as of March 22, 2016 (Successor) and changes during the period December 29, 2015 (Successor) through March 22, 2016 (Successor) is as follows: Shares Weighted-Average Grant Date Fair Value Nonvested at December 29, 2015 (Successor) 946,494 $ 11.16 Granted 45,000 10.64 Vested — — Forfeited — — Nonvested at March 22, 2016 (Successor) 991,494 $ 11.14 |
Summary of Stock Options Activity | A summary of stock option activity as of March 22, 2016 (Successor) and changes during the period December 29, 2015 (Successor) through March 22, 2016 (Successor) is as follows: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in years) (in thousands) Options outstanding at December 29, 2015 (Successor) 224,000 $ 10.40 6.5 $ 67 Granted 7,000 9.88 6.8 — Exercised — — — — Forfeited (2,000 ) 10.40 — — Options outstanding at March 22, 2016 (Successor) 229,000 $ 10.38 6.3 $ 86 Options exercisable at March 22, 2016 (Successor) — $ — — $ — Options exercisable and expected to vest at March 22, 2016 (Successor) 213,772 $ 10.38 6.3 $ 80 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Mar. 22, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Income (Loss) Per Share Data | Below are basic and diluted net income (loss) per share for the periods indicated (amounts in thousands except share and per share data): Successor Predecessor 12 Weeks Ended 12 Weeks Ended Numerator: Net income (loss) $ 3,061 $ (4,940 ) Denominator: Weighted-average shares outstanding - basic 38,798,014 4,074,498 Dilutive effect of restricted stock and RSUs 287 — Dilutive effect of stock options — — Dilutive effect of warrants — — Weighted-average shares outstanding - diluted 38,798,301 4,074,498 Net income (loss) per share - basic $ 0.08 $ (1.21 ) Net income (loss) per share - diluted $ 0.08 $ (1.21 ) Antidilutive stock options, unvested restricted stock awards, unvested RSUs and warrants excluded from the computations 1,924,162 284,017 |
Description of Business - Addit
Description of Business - Additional Information (Details) | 3 Months Ended | |
Mar. 22, 2016staterestaurant | Mar. 24, 2015staterestaurant | |
Franchisor Disclosure [Line Items] | ||
Stock purchase agreement date | Mar. 12, 2015 | |
Successor [Member] | ||
Franchisor Disclosure [Line Items] | ||
Number of states in which entity operates | state | 17 | |
Successor [Member] | Entity Operated Units [Member] | ||
Franchisor Disclosure [Line Items] | ||
Number of restaurants | 297 | |
Successor [Member] | Franchised Units [Member] | ||
Franchisor Disclosure [Line Items] | ||
Number of restaurants | 246 | |
Successor [Member] | Franchised Units [Member] | GUAM | ||
Franchisor Disclosure [Line Items] | ||
Number of restaurants | 1 | |
Predecessor [Member] | ||
Franchisor Disclosure [Line Items] | ||
Number of states in which entity operates | state | 16 | |
Predecessor [Member] | Entity Operated Units [Member] | ||
Franchisor Disclosure [Line Items] | ||
Number of restaurants | 304 | |
Predecessor [Member] | Franchised Units [Member] | ||
Franchisor Disclosure [Line Items] | ||
Number of restaurants | 242 | |
Predecessor [Member] | Franchised Units [Member] | GUAM | ||
Franchisor Disclosure [Line Items] | ||
Number of restaurants | 1 |
Business Combination - Addition
Business Combination - Additional Information (Detail) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 22, 2016 | Mar. 24, 2015 |
Business Acquisition [Line Items] | |||
Payments to acquire businesses, gross | $ 120,000 | ||
DTH | |||
Business Acquisition [Line Items] | |||
Payments to acquire businesses, gross | $ 284,300 | ||
Successor [Member] | |||
Business Acquisition [Line Items] | |||
Proceeds from issuance of common stock | $ 0 | ||
Payments of transaction cost | 65 | ||
Successor [Member] | DTH | |||
Business Acquisition [Line Items] | |||
Goodwill adjustments | $ (800) | ||
Predecessor [Member] | |||
Business Acquisition [Line Items] | |||
Number of shares issued (in shares) | 3,089,532 | ||
Proceeds from issuance of common stock | $ 91,236 | ||
Payments of transaction cost | $ 6,316 | ||
Predecessor [Member] | DTH | |||
Business Acquisition [Line Items] | |||
Number of shares issued (in shares) | 2,348,968 | ||
Proceeds from issuance of common stock | $ 91,200 | ||
DTH Share Holders [Member] | Predecessor [Member] | |||
Business Acquisition [Line Items] | |||
Number of shares issued (in shares) | 740,564 | ||
Proceeds from issuance of common stock | $ 28,800 |
Business Combination - Schedule
Business Combination - Schedule of Preliminary Allocation of Purchase Price to Tangible and Identifiable Intangible Assets Acquired and Liabilities Assumed Based on Fair Value (Detail) - DTH $ in Thousands | Jun. 30, 2015USD ($) |
Business Acquisition [Line Items] | |
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 | (80,280) |
Other long-term liabilities | (36,208) |
Net identifiable liabilities assumed | (34,777) |
Goodwill | 319,082 |
Total gross consideration | $ 284,305 |
Restaurant Closure Charges, N32
Restaurant Closure Charges, Net - Additional Information (Details) - Successor [Member] $ in Thousands | 3 Months Ended | 4 Months Ended |
Mar. 22, 2016USD ($) | Dec. 29, 2015USD ($)location | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring closure liability | $ 4,200 | $ 4,800 |
Current portion of restaurant closure liability | 1,671 | 1,617 |
Non-current portion of restaurant closure liability | 2,578 | 3,206 |
Write-off of fixed assets | 100 | |
Closure of 12 Underperforming Restaurants [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring closure liability | 3,222 | 3,800 |
Current portion of restaurant closure liability | 1,500 | 1,500 |
Non-current portion of restaurant closure liability | 1,700 | $ 2,300 |
Number of underperforming locations | location | 12 | |
Facility Closing [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring closure liability | 1,027 | $ 1,023 |
Current portion of restaurant closure liability | 100 | 100 |
Non-current portion of restaurant closure liability | $ 900 | $ 900 |
Restaurant Closure Charges, N33
Restaurant Closure Charges, Net - Restaurant Closure Liability Activity (Details) - Successor [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 22, 2016 | Dec. 29, 2015 | |
Restructuring Reserve [Roll Forward] | ||
Closure liability, Beginning balance | $ 4,800 | |
Charges for accretion in current period | 124 | |
Closure liability, Ending balance | 4,200 | |
Non-current portion of restaurant closure liability | 2,578 | $ 3,206 |
Facility Closing [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Closure liability, Beginning balance | 1,023 | |
Charges for accretion in current period | 19 | |
Cash payments | (15) | |
Closure liability, Ending balance | 1,027 | |
Non-current portion of restaurant closure liability | 900 | 900 |
Closure of 12 Underperforming Restaurants [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Closure liability, Beginning balance | 3,800 | |
Charges for accretion in current period | 35 | |
Cash payments | (613) | |
Closure liability, Ending balance | 3,222 | |
Non-current portion of restaurant closure liability | 1,700 | $ 2,300 |
Closure of 12 Underperforming Restaurants [Member] | Contract termination costs | ||
Restructuring Reserve [Roll Forward] | ||
Closure liability, Beginning balance | 3,637 | |
Charges for accretion in current period | 35 | |
Cash payments | (484) | |
Closure liability, Ending balance | 3,188 | |
Closure of 12 Underperforming Restaurants [Member] | Other associated costs | ||
Restructuring Reserve [Roll Forward] | ||
Closure liability, Beginning balance | 163 | |
Charges for accretion in current period | 0 | |
Cash payments | (129) | |
Closure liability, Ending balance | $ 34 |
Goodwill and other Intangible34
Goodwill and other Intangible Assets - Schedule of Other Intangible Assets (Detail) - Successor [Member] - USD ($) $ in Thousands | Mar. 22, 2016 | Dec. 29, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 29,996 | $ 30,104 |
Accumulated Amortization | (2,515) | (1,731) |
Net | 27,481 | 28,373 |
Favorable Lease Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 14,207 | 14,207 |
Accumulated Amortization | (1,483) | (1,020) |
Net | 12,724 | 13,187 |
Franchise rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 15,789 | 15,897 |
Accumulated Amortization | (1,032) | (711) |
Net | $ 14,757 | $ 15,186 |
Goodwill and other Intangible35
Goodwill and other Intangible Assets - Additional Information (Details) - Successor [Member] $ in Thousands | 3 Months Ended | |
Mar. 22, 2016USD ($)location | Dec. 29, 2015USD ($) | |
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill | $ 319,082 | $ 318,275 |
Number of franchise locations closed | location | 2 | |
Franchise rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Franchise rights written off | $ 100 |
Debt, Obligations Under Capit36
Debt, Obligations Under Capital Leases and Deemed Landlord Financing Liabilities - Schedule of Debt (Detail) - Successor [Member] - USD ($) $ in Thousands | Mar. 22, 2016 | Dec. 29, 2015 | Aug. 04, 2015 |
Debt Instrument [Line Items] | |||
Total outstanding indebtedness | $ 152,313 | $ 152,224 | |
Obligations under capital leases and deemed landlord financing liabilities | 17,048 | 17,469 | |
Total debt | 169,361 | 169,693 | |
Less: amounts due within one year | 1,684 | 1,725 | |
Total amounts due after one year, net | 167,677 | 167,968 | |
2015 Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Debt discount | 1,261 | 1,328 | $ 1,400 |
Deferred finance costs | 426 | 448 | |
Revolving credit facility | $ 152,313 | $ 152,224 |
Debt, Obligations Under Capit37
Debt, Obligations Under Capital Leases and Deemed Landlord Financing Liabilities - Additional Information (Detail) - USD ($) | Aug. 04, 2015 | Mar. 12, 2015 | Mar. 31, 2015 | Mar. 22, 2016 | Mar. 24, 2015 | Dec. 29, 2015 | Mar. 20, 2015 |
DTH 2013 Senior Credit Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Proceed from revolver | $ 10,000,000 | ||||||
Outstanding amount of subordinated notes | $ 111,200,000 | ||||||
Successor [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Amortization of deferred financing costs including debt discount | $ 100,000 | ||||||
Successor [Member] | 2015 Revolving Credit Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Credit agreement issuance date | Aug. 4, 2015 | ||||||
Credit agreement maturity date | Aug. 4, 2020 | ||||||
Credit facility amount | $ 250,000,000 | ||||||
Credit facility | 19,000,000 | ||||||
Credit fees applicable margin percentage (percent) | 1.75% | ||||||
Unused commitment fee percentage (percent) | 0.20% | ||||||
Unamortized debt discount | $ 1,400,000 | $ 1,261,000 | $ 1,328,000 | ||||
Deferred financing costs | $ 500,000 | ||||||
Interest rate on outstanding balance of credit facility (percent) | 2.20% | ||||||
Availability for additional borrowings under credit facility | $ 77,000,000 | ||||||
Credit facility | $ 154,000,000 | ||||||
Successor [Member] | LIBOR [Member] | 2015 Revolving Credit Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Effective base rate, margins on variable rate (percent) | 1.00% | ||||||
Credit facility margins on variable rate (percent) | 2.00% | ||||||
Decrease on applicable margin (percent) | (0.25%) | ||||||
Successor [Member] | LIBOR [Member] | 2015 Revolving Credit Facility [Member] | Minimum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Credit facility margins on variable rate (percent) | 1.50% | ||||||
Successor [Member] | LIBOR [Member] | 2015 Revolving Credit Facility [Member] | Maximum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Credit facility margins on variable rate (percent) | 2.50% | ||||||
Successor [Member] | Base Rate [Member] | 2015 Revolving Credit Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Decrease on applicable margin (percent) | (0.25%) | ||||||
Successor [Member] | Base Rate [Member] | 2015 Revolving Credit Facility [Member] | Minimum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Credit facility margins on variable rate (percent) | 0.50% | ||||||
Successor [Member] | Base Rate [Member] | 2015 Revolving Credit Facility [Member] | Maximum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Credit facility margins on variable rate (percent) | 1.50% | ||||||
Successor [Member] | Federal Funds Effective Swap Rate [Member] | 2015 Revolving Credit Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Effective base rate, margins on variable rate (percent) | 0.50% | ||||||
Successor [Member] | DTH 2013 Senior Credit Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Credit facility amount | 267,100,000 | ||||||
Credit facility | $ 17,600,000 | ||||||
Successor [Member] | DTH 2013 Senior Credit Facility [Member] | 2013 Term Loan [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Credit facility | 162,500,000 | 227,100,000 | |||||
Successor [Member] | DTH 2013 Senior Credit Facility [Member] | 2013 Revolver [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Credit facility amount | 40,000,000 | ||||||
Successor [Member] | DTH 2013 Senior Credit Facility [Member] | Secured Debt [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Payment of senior secured debt and costs associated with refinancing | $ 164,000,000 | ||||||
Predecessor [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Unamortized debt discount | $ 1,500,000 | ||||||
Outstanding amount of subordinated notes | $ 111,200,000 | ||||||
Debt refinancing cost | 1,600,000 | ||||||
Interest expenses related to subordinated notes | 3,100,000 | ||||||
Predecessor [Member] | Line of Credit [Member] | DTH 2013 Senior Credit Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt modification costs | 100,000 | ||||||
Predecessor [Member] | Medium-term Notes [Member] | DTH 2013 Senior Credit Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Increase (decrease) in borrowing capacity | $ 25,100,000 | ||||||
Predecessor [Member] | DTH 2013 Senior Credit Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Amortization of deferred financing costs including debt discount | $ 400,000 | ||||||
Predecessor [Member] | DTH 2013 Senior Credit Facility [Member] | LIBOR [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Credit facility margins on variable rate (percent) | 4.25% | ||||||
Predecessor [Member] | DTH 2013 Senior Credit Facility [Member] | LIBOR [Member] | Maximum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Increase (Decrease) in interest rate | 1.00% |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Details) - USD ($) | Mar. 20, 2015 | Mar. 24, 2015 | Mar. 22, 2016 | Dec. 29, 2015 |
Predecessor [Member] | ||||
Derivative [Line Items] | ||||
Exercise and settlement of warrants (in shares) | 213,025 | |||
Reduction in warrant liability due to mark-to-market adjustment | $ 35,000 | |||
GSMP [Member] | Predecessor [Member] | ||||
Derivative [Line Items] | ||||
Warrants to purchase of common stock (in shares) | 597,802 | |||
Warrant exercise price per share (in dollars per share) | $ 25 | |||
Fair value of warrant liability | $ 8,300,000 | |||
Common shares redeemed | 384,777 | |||
Interest Rate Cap [Member] | Cash Flow Hedging [Member] | Successor [Member] | ||||
Derivative [Line Items] | ||||
Notional amount | $ 87,500,000 | $ 87,500,000 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | Mar. 22, 2016 | Dec. 29, 2015 |
Successor [Member] | Interest Rate Cap [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of interest rate cap | $ 0 | $ 0 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Estimated Fair Values of Long-term Debt Instruments, Warrant Liability and Interest Rate Cap Agreement (Detail) - Successor [Member] - 2015 Revolving Credit Facility [Member] - USD ($) $ in Thousands | Mar. 22, 2016 | Dec. 29, 2015 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Credit Facility | $ 154,000 | |
Estimated Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Credit Facility | 152,313 | $ 152,224 |
Book Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Credit Facility | $ 152,313 | $ 152,224 |
Other Accrued Liabilities and41
Other Accrued Liabilities and Other Non-current Liabilities - Summary of Other Accrued Liabilities (Detail) - Successor [Member] - USD ($) $ in Thousands | Mar. 22, 2016 | Dec. 29, 2015 |
Accounts Payable And Accrued Liabilities Current And Noncurrent [Line Items] | ||
Employee compensation and related items | $ 8,198 | $ 7,818 |
Accrued insurance | 7,289 | 7,168 |
Accrued sales tax | 5,006 | 3,604 |
Accrued advertising | 1,725 | 999 |
Accrued real property tax | 1,676 | 1,378 |
Restaurant closure liability | 1,671 | 1,617 |
Accrued income taxes | 1,067 | 30 |
Accrued bonus | 914 | 5,352 |
Other | 3,977 | 4,931 |
Other accrued liabilities | $ 31,523 | $ 32,897 |
Other Accrued Liabilities and42
Other Accrued Liabilities and Other Non-current Liabilities - Summary of Other Non-current Liabilities (Detail) - Successor [Member] - USD ($) $ in Thousands | Mar. 22, 2016 | Dec. 29, 2015 |
Other Non Current Liabilities [Line Items] | ||
Unfavorable lease liabilities | $ 19,082 | $ 19,685 |
Insurance reserves | 6,034 | 5,963 |
Restaurant closure liability | 2,578 | 3,206 |
Unearned trade discount, non-current | 1,939 | 2,028 |
Deferred development and initial franchise fees | 1,907 | 1,920 |
Deferred gift card income | 1,714 | 2,217 |
Deferred rent liability | 933 | 731 |
Other | 522 | 501 |
Other non-current liabilities | $ 34,709 | $ 36,251 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Thousands | Mar. 20, 2015 | Mar. 22, 2016 | Mar. 24, 2015 | Dec. 29, 2015 |
2015 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock reserved and authorized for issuance (in shares) | 3,300,000 | |||
Common stock authorized and available for grant (in shares) | 2,077,506 | |||
Successor [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total unrecognized expense related to share-based compensation plans | $ 9,500 | |||
Weighted average period of recognition (in years) | 3 years 2 months 12 days | |||
Unrecognized stock compensation expense | $ 700 | |||
Payments related to employee tax withholding obligations | $ 0 | |||
Number of awards outstanding (in shares) | 991,494 | 946,494 | ||
Number of stock options outstanding (in shares) | 229,000 | 224,000 | ||
Successor [Member] | 2015 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense recorded | $ 700 | |||
Successor [Member] | Restricted Shares [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation expense, net | $ 8,800 | |||
Weighted average period of recognition (in years) | 3 years 2 months 12 days | |||
Vesting period (in years) | 3 years 3 months 18 days | |||
Predecessor [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense recorded | $ 500 | |||
Shares issued for employee tax withholding obligations (in shares) | 237,948 | |||
Shares redeemed for employee tax withholding obligations (in shares) | 247,552 | |||
Payments related to employee tax withholding obligations | $ 7,500 | $ 7,533 | ||
Number of stock options outstanding (in shares) | 0 | |||
Predecessor [Member] | Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of awards outstanding (in shares) | 0 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Outstanding and Unvested Restricted Stock Activity (Details) - Successor [Member] | 3 Months Ended |
Mar. 22, 2016$ / sharesshares | |
Shares | |
Nonvested Shares, Beginning balance (in shares) | shares | 946,494 |
Granted (in shares) | shares | 45,000 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Nonvested Shares, Ending balance (in shares) | shares | 991,494 |
Weighted-Average Grant Date Fair Value | |
Weighted-Average Grant Date Fair Value, Beginning balance (in dollars per share) | $ / shares | $ 11.16 |
Weighted-Average Grant Date Fair Value, Granted (in dollars per share) | $ / shares | 10.64 |
Weighted-Average Grant Date Fair Value, Vested (in dollars per share) | $ / shares | 0 |
Weighted-Average Grant Date Fair Value, Forfeited (in dollars per share) | $ / shares | 0 |
Weighted-Average Grant Date Fair Value, Ending balance (in dollars per share) | $ / shares | $ 11.14 |
Stock-Based Compensation - Su45
Stock-Based Compensation - Summary of Stock Options Activity (Details) - Successor [Member] - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 22, 2016 | Dec. 29, 2015 | |
Shares | ||
Options outstanding, Beginning balance (in shares) | 224,000 | |
Granted (in shares) | 7,000 | |
Exercised (in shares) | 0 | |
Forfeited (in shares) | (2,000) | |
Options outstanding, Ending balance (in shares) | 229,000 | 224,000 |
Options exercisable (in shares) | 0 | |
Options exercisable and expected to vest (in shares) | 213,772 | |
Weighted Average Exercise Price | ||
Weighted Average Exercise Price, Options outstanding, Beginning balance (in dollars per share) | $ 10.40 | |
Weighted Average Exercise Price, Granted (in dollars per share) | 9.88 | |
Weighted Average Exercise Price, Exercised (in dollars per share) | 0 | |
Weighted Average Exercise Price, Forfeited (in dollars per share) | 10.40 | |
Weighted Average Exercise Price, Options outstanding, Ending balance (in dollars per share) | 10.38 | $ 10.40 |
Weighted Average Exercise Price, Options exercisable (in dollars per share) | 0 | |
Weighted Average Exercise Price, Options exercisable and expected (in dollars per share) | $ 10.38 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Weighted Average Remaining Contractual Term, Options outstanding (in years) | 6 years 3 months 18 days | 6 years 6 months |
Weighted Average Remaining Contractual Term, Granted (in years) | 6 years 9 months 18 days | |
Weighted Average Remaining Contractual Term, Options exercisable and expected to vest (in years) | 6 years 3 months 18 days | |
Aggregate Intrinsic Value, Options outstanding, Beginning balance | $ 67 | |
Aggregate Intrinsic Value, Options outstanding, Ending balance | 86 | $ 67 |
Aggregate Intrinsic Value, Options exercisable and expected to vest | $ 80 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 22, 2016 | Feb. 26, 2016 | |
Common Stock and Warrants [Member] | ||
Class of Stock [Line Items] | ||
Maximum authorized stock repurchase amount (up to) | $ 25,000,000 | |
Successor [Member] | Common Stock and Warrants [Member] | ||
Class of Stock [Line Items] | ||
Remaining authorized stock repurchase amount | $ 24,100,000 | |
Successor [Member] | Common Stock [Member] | ||
Class of Stock [Line Items] | ||
Shares repurchased (in shares) | 86,679 | |
Treasury Stock Acquired, Average Cost Per Share | $ 10.79 | |
Shares repurchased, value | $ 1,000,000 |
Earnings per Share - Schedule o
Earnings per Share - Schedule of Basic and Diluted Net Income per Share Data (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 22, 2016 | Mar. 24, 2015 | |
Successor [Member] | ||
Numerator: | ||
Net income (loss) | $ 3,061 | |
Denominator: | ||
Weighted-average shares outstanding - basic (in shares) | 38,798,014 | |
Weighted-average shares outstanding - diluted | 38,798,301 | |
Net (loss) income per share - basic (in dollars per share) | $ 0.08 | |
Net (loss) income per share - diluted (in dollars per share) | $ 0.08 | |
Antidilutive stock options, unvested restricted stock awards, unvested RSUs and warrants excluded from the computations (in dollars per share) | 1,924,162 | |
Successor [Member] | Restricted Stock and RSUs [Member] | ||
Denominator: | ||
Dilutive effect (in shares) | 287 | |
Successor [Member] | Stock Options [Member] | ||
Denominator: | ||
Dilutive effect (in shares) | 0 | |
Successor [Member] | Warrants [Member] | ||
Denominator: | ||
Dilutive effect (in shares) | 0 | |
Predecessor [Member] | ||
Numerator: | ||
Net income (loss) | $ (4,940) | |
Denominator: | ||
Weighted-average shares outstanding - basic (in shares) | 4,074,498 | |
Weighted-average shares outstanding - diluted | 4,074,498 | |
Net (loss) income per share - basic (in dollars per share) | $ (1.21) | |
Net (loss) income per share - diluted (in dollars per share) | $ (1.21) | |
Antidilutive stock options, unvested restricted stock awards, unvested RSUs and warrants excluded from the computations (in dollars per share) | 284,017 | |
Predecessor [Member] | Restricted Stock and RSUs [Member] | ||
Denominator: | ||
Dilutive effect (in shares) | 0 | |
Predecessor [Member] | Stock Options [Member] | ||
Denominator: | ||
Dilutive effect (in shares) | 0 | |
Predecessor [Member] | Warrants [Member] | ||
Denominator: | ||
Dilutive effect (in shares) | 0 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 22, 2016 | Mar. 24, 2015 | |
Successor [Member] | ||
Income Tax Disclosure [Line Items] | ||
Effective income tax rates (percent) | 41.20% | |
Provision for income taxes | $ 2,142 | |
Predecessor [Member] | ||
Income Tax Disclosure [Line Items] | ||
Effective income tax rates (percent) | 10.20% | |
Provision for income taxes | $ 458 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 22, 2016 | Dec. 29, 2015 | |
Loss Contingencies [Line Items] | ||
Purchasing commitments contract extended terms | 2,021 | |
Litigation Case on April 2015 | ||
Loss Contingencies [Line Items] | ||
Insurance deductible per claim | $ 250 | |
Successor [Member] | ||
Loss Contingencies [Line Items] | ||
Contractual purchase obligations for goods and services | 86,400 | |
Successor [Member] | Litigation Case on April 2015 | ||
Loss Contingencies [Line Items] | ||
Legal defense fees | 200 | |
Successor [Member] | Insurance Claims [Member] | ||
Loss Contingencies [Line Items] | ||
Reimbursement form insurance claim | $ 300 | |
Successor [Member] | Insurance Claims [Member] | Litigation Case on April 2015 | ||
Loss Contingencies [Line Items] | ||
Reimbursement form insurance claim | $ 200 |