Del Taco Restaurants, Inc. (TACO) has reported a 66.13 percent jump in profit for the quarter ended Jan. 03, 2017. The company has earned $8.04 million, or $0.20 a share in the quarter, compared with $4.84 million, or $0.12 a share for the same period last year.
Revenue during the quarter grew 12.61 percent to $150.24 million from $133.42 million in the previous year period. Gross margin for the quarter expanded 205 basis points over the previous year period to 72.52 percent. Total expenses were 89.40 percent of quarterly revenues, down from 91.92 percent for the same period last year. This has led to an improvement of 252 basis points in operating margin to 10.60 percent.
Operating income for the quarter was $15.93 million, compared with $10.78 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $25.35 million compared with $21.22 million in the prior year period. At the same time, adjusted EBITDA margin improved 96 basis points in the quarter to 16.87 percent from 15.91 percent in the last year period.
Paul J.B. Murphy, III, Chief Executive Officer of Del Taco, commented, "Our solid fourth quarter results capped another successful year at Del Taco as we exceeded our annual guidance for comparable restaurant sales, total revenue, restaurant contribution margin and adjusted EBITDA, and delivered on our expectations for diluted earnings per share. We believe that these achievements are a testament to our brand strength, our diverse menu and marketing capabilities, and our restaurant teams who deliver great guest experiences."
For financial year 2017, Del Taco Restaurants, Inc. projects revenue to be in the range of $466 million to $476 million. The company forecasts diluted earnings per share to be in the range of $0.52 to $0.55.
Working capital remains negative
Working capital of Del Taco Restaurants, Inc. was negative $34.81 million on Jan. 03, 2017 compared with negative $31.69 million on Dec. 29, 2015. Current ratio was at 0.36 as on Jan. 03, 2017, down from 0.38 on Dec. 29, 2015.
Cash conversion cycle (CCC) was almost stable at 15 days for the quarter, when compared with the last year period. Days sales outstanding were almost stable at 1 days for the quarter, when compared with the last year period.
Days inventory outstanding was almost stable at 3 days for the quarter, when compared with the last year period. At the same time, days payable outstanding was almost stable at 19 days for the quarter, when compared with the previous year period.
Debt moves up marginally
Del Taco Restaurants, Inc. has witnessed an increase in total debt over the last one year. It stood at $175.33 million as on Jan. 03, 2017, up 3.32 percent or $5.64 million from $169.69 million on Dec. 29, 2015. Total debt was 24.11 percent of total assets as on Jan. 03, 2017, compared with 24.12 percent on Dec. 29, 2015. Debt to equity ratio was almost stable at 0.46 as on Jan. 03, 2017, when compared with the last year. Interest coverage ratio improved to 7.82 for the quarter from 5.60 for the same period last year.
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