UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 14, 2019

Del Taco Restaurants, Inc.
(Exact name of registrant as specified in its charter)

 
					
Delaware	 	001-36197	 	46-3340980	
(State or other jurisdiction
of incorporation)	 	(Commission
File Number)	 	(IRS Employer
Identification No.)	
25521 Commercentre Drive
Lake Forest, CA 92630
(Address of Principal executive offices, including Zip Code)
(949) 462-9300
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company  ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

Item 2.02 Results of Operations and Financial Condition
On January 14, 2019, Del Taco Restaurants, Inc. (the “Company” or “Del Taco”) issued a press release announcing preliminary unaudited sales results for the fiscal fourth quarter ended January 1, 2019 and updated guidance for fiscal year ended January 1, 2019. A copy of the press release is attached hereto as Exhibit 99.1.
Item 7.01 Regulation FD Disclosure
Attached as Exhibit 99.2 to this Current Report on Form 8-K is the investor presentation dated January 14, 2019 that will be used by Del Taco in making a presentation at the 21 st Annual ICR Conference at the Grande Lakes Hotel and Resort in Orlando, Florida on January 14, 2019 beginning at 10:00am Eastern Time.
The information in Item 2.02 and in this Item 7.01 and Exhibits 99.1 and 99.2 attached hereto are being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise be subject to the liabilities of that section, nor shall they be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01    Financial Statements and Exhibits.
(d) Exhibits

	Exhibit No.	  		Description of Exhibit	
			
Exhibit 99.1	  	Press Release issued on January 14, 2019		
			
Exhibit 99.2	  	Investor Presentation dated January 14, 2019		

SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

DEL TACO RESTAURANTS, INC.	
		
By:	 	/s/ Steven L. Brake	
Name:	 	Steven L. Brake	
Title:	 	Executive Vice President and Chief Financial Officer	
Date: January 14, 2019

Exhibit 99.1

For Immediate Release
Del Taco Restaurants, Inc. Announces Preliminary Unaudited Fiscal
Fourth Quarter 2018 Sales Results and Updated Fiscal Year 2018 Guidance
Provides Initial Guidance for Fiscal Year 2019
Company to Optimize Restaurant Portfolio in part through Refranchising of Select Locations
ICR Conference Presentation and Webcast at 10:00 am ET Today
Lake Forest, CA. January 14, 2019 – Del Taco Restaurants, Inc. (“Del Taco” or the “Company”), (NASDAQ: TACO), the second largest Mexican-American quick service restaurant chain by units in the United States, today announced preliminary unaudited fiscal fourth quarter 2018 sales results for the period ending January 1, 2019 ahead of management’s presentation and webcast at the ICR Conference at 10:00 am ET this morning. Del Taco also provided updated guidance for fiscal year 2018 as well as initial guidance for fiscal year 2019.
Fiscal Fourth Quarter 2018 Highlights
 
 	•	 	System-wide comparable restaurant sales grew 1.9%, marking the 21 st consecutive quarter of gains;	
 
 	•	 	Company-operated comparable restaurant sales grew 1.0%, marking the 26th consecutive quarter of gains. Company-operated comparable restaurant sales growth was comprised of average check growth of 4.9%, including over 1% of menu mix growth, partially offset by a transaction decrease of 3.9%;	
 
 	•	 	Franchised comparable restaurant sales grew 3.2%;	
 
 	•	 	Total revenue of approximately $157.1 million (including $4.1 million of franchise advertising contributions and $0.3 million of other franchise revenue required as part of the revenue recognition rules adopted in the fiscal first quarter of 2018 whereby the offsetting impact is an increase to expenses such that there is no impact on operating income and net income), representing 7.2% growth from the fiscal fourth quarter of 2017; and	
 
 	•	 	Company restaurant sales of approximately $146.7 million, representing 4.4% growth from the fiscal fourth quarter of 2017.	
Adjusted EBITDA* is a non-GAAP measure and defined below under “Key Financial Definitions”.
The expected sales results are preliminary and unaudited, have not been reviewed by our independent registered public accountants, and remain subject to the completion of normal quarter-end accounting procedures and adjustments and are subject to change. The Company expects to release financial and operating results for its fiscal fourth quarter and fiscal year ended January 1, 2019 during March 2019.
John D. Cappasola, Jr., President and Chief Executive Officer of Del Taco, commented, “Preliminary comparable restaurant sales performance during the fourth quarter reflected sequential improvement from the third quarter despite continued competitive discounting, and again included stronger results from our franchisees which supports brand portability due to their broad geographic footprint. Our comprehensive plan in 2019 includes pricing, menu mix and transaction strategies designed to achieve positive comparable restaurant sales in 2019, and to protect our strong restaurant margins. This plan is buoyed by key transaction initiatives designed to enhance our core value program, deliver exciting new products and expand our digital presence through our new App and launch of multiple third party delivery providers.”
 
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Cappasola continued, “This morning, we also provided initial guidance for 2019 and announced our intention to surgically evolve our restaurant portfolio to stimulate growth in new restaurants and existing restaurant AUV’s. This effort begins in the LA area by acquiring three high volume franchise restaurants and refranchising thirteen lower volume company restaurants during the first quarter of 2019. Further planned actions include refranchising non-core Western markets to new or existing franchisees with proven operational and development capabilities which would shift our approximately 55% current company ownership to approximately 45% by the summer of 2020. Our portfolio optimization strategy positions the brand for accelerated franchise growth and focuses company operations on our core Western markets and strategic seed markets to support emerging market growth.”
Updated Fiscal Year 2018 Guidance
Based upon these preliminary unaudited sales results, Del Taco is offering the following updated guidance for fiscal year 2018, a 52 week period ending on January 1, 2019.
 
 	•	 	System-wide comparable restaurant sales growth of approximately 2.5%, including 1.5% for company-operated restaurants and 3.8% for franchised restaurants;	
 
 	•	 	Total revenue of approximately $505.3 million (including $13.3 million of franchise advertising contributions and $0.9 million of other franchise revenue required as part of the new revenue recognition rules adopted in the fiscal first quarter 2018 whereby the offsetting impact is an increase to expenses such that there is no impact on operating income and net income), representing 7.2% growth from fiscal year 2017;	
 
 	•	 	Company restaurant sales of approximately $471.2 million, representing 4.2% growth from fiscal year 2017;	
 
 	•	 	Restaurant contribution margin* of at least 19.5% (representing the high end of the previously guided range);	
 
 	•	 	Adjusted EBITDA* of at least $71.5 million (representing the high end of the previously guided range); and	
 
 	•	 	Twenty five system-wide restaurant openings, including thirteen company-operated restaurants.	
Restaurant contribution* and Adjusted EBITDA* are non-GAAP measures and defined below under “Key Financial Definitions”.
Restaurant Development
During the fiscal fourth quarter 2018, the Company opened seven company-operated and eight franchised restaurants for a total of fifteen system-wide openings.
During fiscal year 2018, the Company opened thirteen company-operated and twelve franchised restaurants for a total of twenty five system-wide openings. There were also a total of nine system-wide closures, consisting of six company-operated and three franchised restaurants.
Repurchase Program for Common Stock and Warrants
During the fiscal fourth quarter 2018, the Company repurchased 765,209 shares of common stock at average price of $11.05 per share for a total of $8.5 million, and repurchased 20,596 warrants at an average price per warrant of $1.93. As of the end of the fiscal fourth quarter approximately $29.6 million remains under our $75 million repurchase authorization.
Initial Fiscal Year 2019 Guidance
The Company is providing the following initial guidance for the 52-week fiscal year 2019 ending December 31, 2019, based in part on preliminary and unaudited fiscal year 2018 sales results and therefore remain subject to
 
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change. This guidance embeds the acquisition of three high volume restaurants and refranchise of thirteen lower volume restaurants in the LA area during the first quarter of 2019, and does not include any potential impacts from the adoption of the new lease accounting rules. Additional guidance will be forthcoming when fiscal fourth quarter and fiscal year 2018 financial results are reported in March 2019.
 
 	•	 	System-wide comparable restaurant sales growth of low-single digits;	
 
 	•	 	Total revenue between $517 million and $527 million;	
 
 	•	 	Company restaurant sales between $481 million and $491 million;	
 
 	•	 	Menu pricing of up to 4%;	
 
 	•	 	Food inflation of approximately 2% to 3%, including higher distribution and transportation costs;	
 
 	•	 	Labor inflation of approximately 6%, primarily driven by a $1 increase in California minimum wage (from $11 to $12) which took effect earlier this month;	
 
 	•	 	Restaurant contribution* margin between 18.8% and 19.3%;	
 
 	•	 	Adjusted EBITDA* between $70.0 million and $72.5 million; and	
 
 	•	 	At least 25 gross system-wide new unit openings and an estimated 1% system-wide closure rate. System-wide new unit openings in fiscal year 2019 will slightly skew toward franchise restaurants.	
Restaurant contribution* and Adjusted EBITDA* are non-GAAP measures and defined below under “Key Financial Definitions”.
We have not reconciled guidance for Adjusted EBITDA to the corresponding GAAP financial measure because we do not provide guidance for the various reconciling items. We are unable to provide guidance for these reconciling items because we cannot determine their probable significance, as certain items are outside of our control and cannot be reasonably predicted since these items could vary significantly from period to period. Accordingly, a reconciliation to the corresponding GAAP financial measure is not available without unreasonable effort.
Restaurant Portfolio Optimization
The Company intends to optimize its restaurant portfolio to help stimulate growth in new restaurants and existing restaurant AUV’s. This includes the following actions and is expected to shift our approximately 55% current company ownership to approximately 45% by the summer of 2020.
 
 	•	 	The Company expects to finalize a purchase of three high volume franchised restaurants in the LA area during the fiscal first quarter of 2019 which will be immediately accretive to earnings.	
 
 	•	 	The Company expects to refranchise thirteen lower volume company-operated restaurants in the LA area to three separate and experienced Del Taco franchisees during the fiscal first quarter of 2019. These franchisees have each previously demonstrated their ability to improve performance at restaurants they acquired from other Del Taco franchisees.	
 
 	•	 	The Company also expects to refranchise non-core Western markets to new or existing franchisees with proven operational and development capabilities who commit to additional development in these and/or other markets. Because the exact timing of these refranchising transactions has not yet been determined, they are not embedded within the initial fiscal year 2019 guidance referenced above.	
ICR Conference Participation
John D. Cappasola, Jr., President and Chief Executive Officer; and Steven L. Brake, Executive Vice President and Chief Financial Officer; will present at the ICR Conference this morning, Monday, January 14, 2019 at the Grande Lakes Hotel and Resort in Orlando, Florida. The presentation will begin at 10:00 AM Eastern Time and will be webcast live and later archived.
The presentation will be posted to the Del Taco website before the presentation begins at investor.deltaco.com under the “News & Events” tab, where the webcast will be viewable. The webcast can also be viewed directly through the conference website at www.icrconference.com .
Key Financial Definition
Comparable restaurant sales growth reflects the change in year-over-year sales for the comparable company, franchise and total system restaurant base. Restaurants are included in the comparable store base in the accounting period following its 18 th  full month of operations and excludes restaurant closures.
 
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Restaurant contribution * is defined as company restaurant sales less restaurant operating expenses, which are food and paper costs, labor and related expenses and occupancy and other operating expenses. Restaurant contribution margin is defined as restaurant contribution as a percentage of company restaurant sales. Restaurant contribution and restaurant contribution margin are neither required by, nor presented in accordance with, GAAP. Restaurant contribution and restaurant contribution margin are supplemental measures of operating performance of restaurants and the calculations thereof may not be comparable to those reported by other companies. Restaurant contribution and restaurant contribution margin have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of results as reported under U.S. GAAP. Management believes that restaurant contribution and restaurant contribution margin are important tools for investors because they are widely-used metrics within the restaurant industry to evaluate restaurant-level productivity, efficiency and performance. Management uses restaurant contribution and restaurant contribution margin as key performance indicators to evaluate the profitability of incremental sales at Del Taco restaurants, to evaluate restaurant performance across periods and to evaluate restaurant financial performance compared with competitors.
Adjusted EBITDA * is defined as net income/loss prior to interest expense, income taxes, and depreciation and amortization, as adjusted to add back certain charges, such as stock-based compensation expense and transaction-related costs, as these expenses are not considered an indicator of ongoing company performance. Adjusted EBITDA is a non-GAAP financial measure and should not be considered as an alternative to operating income or net income/loss as a measure of operating performance or cash flows or as measures of liquidity. Non-GAAP financial measures are not necessarily calculated the same way by different companies and should not be considered a substitute for or superior to GAAP results. We believe Adjusted EBITDA facilitates operating performance comparisons from period to period by isolating the effects of some items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies. These potential differences may be caused by variations in capital structures (affecting interest expense), tax positions (such as the impact on periods or changes in effective tax rates or net operating losses) and the age and book depreciation of facilities and equipment (affecting relative depreciation expense). We also present Adjusted EBITDA because (i) we believe this measure is frequently used by securities analysts, investors and other interested parties to evaluate companies in our industry and (ii) we use Adjusted EBITDA internally as a benchmark to compare performance to that of competitors.
About Del Taco Restaurants, Inc.
Del Taco (NASDAQ: TACO) offers a unique variety of both Mexican and American favorites such as burritos and fries, prepared fresh in every restaurant’s working kitchen with the value and convenience of a drive-thru. Del Taco’s menu items taste better because they are made with quality ingredients like fresh grilled chicken and carne asada steak, hand-sliced avocado, hand-grated cheddar cheese, slow-cooked beans made from scratch, and creamy Queso Blanco. Del Taco’s new advertising campaign, “Celebrating the Hardest Working Hands in Fast Food,” further communicates the company’s commitment to providing guests with fresh, quality food prepared by hand every day. Founded in 1964, today Del Taco serves more than three million guests each week at its 580 restaurants across 14 states. For more information, visit www.deltaco.com .
Forward-Looking Statements
In addition to historical information, this release may contain a number of “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, information concerning Del Taco’s possible or assumed future results of operations, business strategies, competitive position, industry environment, potential growth opportunities and the effects of regulation. These statements are based on Del Taco’s management’s current expectations and beliefs, as well as a number of assumptions concerning future events. When used in this press release, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “target,” “may,” “will,” “should,” “future,” “propose,” “preliminary,” “guidance,” “on track” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. Such forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside Del Taco’s management’s control that could cause actual results to
 
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differ materially from the results discussed in the forward-looking statements. These risks included, without limitation, consumer demand, our inability to successfully open company-operated or franchised restaurants or establish new markets, competition in our markets, our inability to grow and manage growth profitably, adverse changes in food and supply costs, our inability to access additional capital, changes in applicable laws or regulations, food safety and foodborne illness concerns, our inability to manage existing and to obtain additional franchisees, our inability to attract and retain qualified personnel, our inability to profitably expand into new markets, changes in, or the discontinuation of, the Company’s repurchase program, and the possibility that we may be adversely affected by other economic, business, and/or competitive factors. Additional risks and uncertainties are identified and discussed in Del Taco’s reports filed with the SEC, including under Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended January 2, 2018, and available at the SEC’s website at www.sec.gov and the Company’s website at www.deltaco.com .
Forward-looking statements included in this release speak only as of the date of this release. Del Taco undertakes no obligation to update its forward-looking statements to reflect events or circumstances after the date of this release or otherwise.
### #### ###
### #### ###
Investor Relations Contact:
Raphael Gross
(203) 682-8253
investor@deltaco.com
 
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Exhibit 99.2Exhibit 99.2

22

33

44

(1) Based on unit count (2) Represents FY2018 sales data and unit counts as of FY2018 st (3) Represents system-wide sales for fiscal 2018 and unit count as of January 1 , 2019. Mexican QSR competitive unit counts / system-wide sales are from the 5 Technomic Top 500 2018 report reflecting 2017 results(1) Based on unit count (2) Represents FY2018 sales data and unit counts as of FY2018 st (3) Represents system-wide sales for fiscal 2018 and unit count as of January 1 , 2019. Mexican QSR competitive unit counts / system-wide sales are from the 5 Technomic Top 500 2018 report reflecting 2017 results

( (1 1) ) QUALITY 6 VALUE / AFFORDABILITY( (1 1) ) QUALITY 6 VALUE / AFFORDABILITY

77

88

99

1010

1111

1212

3.5% 2.6% 2.6% 2.4% 2.3% 2.2% 2.0% 1.9% 1.8% 1.6% 1.5% 1.3% 1.2% 0.1% 1.1% 1.0% 0.8% 0.7% 0.6% Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 (1) 133.5% 2.6% 2.6% 2.4% 2.3% 2.2% 2.0% 1.9% 1.8% 1.6% 1.5% 1.3% 1.2% 0.1% 1.1% 1.0% 0.8% 0.7% 0.6% Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 (1) 13

1414

1515

1616

1717

1818

(1) Technomic Top 500 2018 report reflecting 2017 results (2) Represents FY2018 unit counts 19 (3) Based on internal analysis and a study prepared by a leading national consulting firm.(1) Technomic Top 500 2018 report reflecting 2017 results (2) Represents FY2018 unit counts 19 (3) Based on internal analysis and a study prepared by a leading national consulting firm.

(1) 20(1) 20

25 20 12 8 15 5 10 6 6 13 12 5 8 6 5 0 2125 20 12 8 15 5 10 6 6 13 12 5 8 6 5 0 21

2222

2323

2424

2525

2626

(3) $75.0 $70.0 $65.0 $60.0 $55.0 $50.0 $45.0 $40.0 (3) 27(3) $75.0 $70.0 $65.0 $60.0 $55.0 $50.0 $45.0 $40.0 (3) 27

2828

$1.60 22% $1.40 21% $1.20 20% 19.5% $1.00 $0.80 19% $0.60 17.2% 18% $0.40 17% $0.20 $0.00 16% 29$1.60 22% $1.40 21% $1.20 20% 19.5% $1.00 $0.80 19% $0.60 17.2% 18% $0.40 17% $0.20 $0.00 16% 29

(millions) 30(millions) 30

3131

3232

3333

(1) FISCAL 2018 SALES BY DAY-PART BUCK & UNDER FISCAL 2018 TOP INGREDIENTS FISCAL 2018 SALES BY CHANNEL 34(1) FISCAL 2018 SALES BY DAY-PART BUCK & UNDER FISCAL 2018 TOP INGREDIENTS FISCAL 2018 SALES BY CHANNEL 34

Q3 YTD 2018 Q3 YTD 2017 2017 2016 2015 2014 2013 2012 Net income (loss) $13,313 $14,669 $49,871 $20,913 $4,757 $(9,255) $(6,539) $(8,222) : Provision (benefit) for income taxes 4,563 8,955 (15,824) 15,329 852 1,098 80 1,939 Interest expense 5,984 4,798 7,200 6,327 15,143 30,895 35,613 38,291 Depreciation and amortization 17,616 15,903 23,362 23,129 19,525 18,608 19,472 17,082 41,476 44,325 64,609 65,698 40,277 41,346 48,626 49,090 (a) Stock-based compensation expense 4,079 3,340 4,876 4,096 2,030 954 1,290 3,087 (b) Loss (gain) on disposal of assets 760 524 1,075 312 102 (151) 209 35 -- -- -- -- -- (c) 1,661 -- Impairment of long-lived assets 9,617 (d) Restaurant closure charges, net 635 (1) 191 435 2,109 82 298 716 Amortization of favorable and unfavorable (602) (521) (809) (607) (361) 144 378 617 (e) lease assets and liabilities, net -- -- -- -- (f) -- Debt modification costs 217 1,241 4,178 -- -- -- -- (g) Transaction-related costs 731 20,227 1,936 -- -- -- -- -- (h) Change in fair value of warrant liability (35) 1,417 33 (2,634) (i) Pre-opening costs 900 531 1,591 731 642 462 596 1,080 -- -- -- -- -- -- (j) Insurance reserves adjustment 1,800 -- -- -- -- -- (k) -- (523) (220) -- Other income $48,386 $48,198 $71,533 $71,396 $64,988 $58,848 $55,608 $51,991 -- -- -- -- -- -- (l) Pro-rata Adjustment to 52 Weeks (1,122) -- $48,386 $48,198 $71,533 $70,274 $64,988 $58,848 $55,608 $51,991 35Q3 YTD 2018 Q3 YTD 2017 2017 2016 2015 2014 2013 2012 Net income (loss) $13,313 $14,669 $49,871 $20,913 $4,757 $(9,255) $(6,539) $(8,222) : Provision (benefit) for income taxes 4,563 8,955 (15,824) 15,329 852 1,098 80 1,939 Interest expense 5,984 4,798 7,200 6,327 15,143 30,895 35,613 38,291 Depreciation and amortization 17,616 15,903 23,362 23,129 19,525 18,608 19,472 17,082 41,476 44,325 64,609 65,698 40,277 41,346 48,626 49,090 (a) Stock-based compensation expense 4,079 3,340 4,876 4,096 2,030 954 1,290 3,087 (b) Loss (gain) on disposal of assets 760 524 1,075 312 102 (151) 209 35 -- -- -- -- -- (c) 1,661 -- Impairment of long-lived assets 9,617 (d) Restaurant closure charges, net 635 (1) 191 435 2,109 82 298 716 Amortization of favorable and unfavorable (602) (521) (809) (607) (361) 144 378 617 (e) lease assets and liabilities, net -- -- -- -- (f) -- Debt modification costs 217 1,241 4,178 -- -- -- -- (g) Transaction-related costs 731 20,227 1,936 -- -- -- -- -- (h) Change in fair value of warrant liability (35) 1,417 33 (2,634) (i) Pre-opening costs 900 531 1,591 731 642 462 596 1,080 -- -- -- -- -- -- (j) Insurance reserves adjustment 1,800 -- -- -- -- -- (k) -- (523) (220) -- Other income $48,386 $48,198 $71,533 $71,396 $64,988 $58,848 $55,608 $51,991 -- -- -- -- -- -- (l) Pro-rata Adjustment to 52 Weeks (1,122) -- $48,386 $48,198 $71,533 $70,274 $64,988 $58,848 $55,608 $51,991 35

(IN THOUSANDS) Q3 YTD Q3 YTD 2017 2016 2015 2014 2013 2012 2018 2017 Company restaurant sales $324,468 $311,542 $452,148 $434,064 $407,615 $380,800 $356,306 $345,590 Restaurant operating expenses 261,654 250,620 363,228 344,749 326,080 309,649 291,485 285,993 $62,814 $60,922 $88,920 $89,315 $81,535 $71,151 $64,821 $59,597 (a) -- -- -- -- -- -- -- Pro-rata Adjustment to 52 Weeks (1,354) $62,814 $60,922 $88,920 $87,961 $81,535 $71,151 $64,821 $59,597 a) Estimated contribution from the additional operating week during fiscal 2016. 36(IN THOUSANDS) Q3 YTD Q3 YTD 2017 2016 2015 2014 2013 2012 2018 2017 Company restaurant sales $324,468 $311,542 $452,148 $434,064 $407,615 $380,800 $356,306 $345,590 Restaurant operating expenses 261,654 250,620 363,228 344,749 326,080 309,649 291,485 285,993 $62,814 $60,922 $88,920 $89,315 $81,535 $71,151 $64,821 $59,597 (a) -- -- -- -- -- -- -- Pro-rata Adjustment to 52 Weeks (1,354) $62,814 $60,922 $88,920 $87,961 $81,535 $71,151 $64,821 $59,597 a) Estimated contribution from the additional operating week during fiscal 2016. 36