El Pollo Loco 2015 Annual Report Download - page 95

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Table of Contents
EL POLLO LOCO HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the year ended December 25, 2013, potentially dilutive securities, which consist of options to purchase 1,709,748 shares of common stock at
prices ranging from $1.81 to $12.72 were not included in the computation of diluted net loss per share because such inclusion would be
antidilutive.
For the year ended December 26, 2012, potentially dilutive securities, which consist of options to purchase 836,402 shares of common stock at
prices ranging from $1.81 to $12.72 were not included in the computation of diluted net loss per share because such inclusion would be
antidilutive.
Below is a reconciliation of basic and diluted share counts.
14. COMMITMENTS AND CONTINGENCIES
Legal Matters
On or about February 24, 2014, a former employee filed a class action in the Superior Court of the State of California, County of Orange, against
EPL on behalf of all putative class members (all hourly employees from 2010 to the present) alleging certain violations of California labor laws,
including failure to pay overtime compensation, failure to provide meal periods and rest breaks, and failure to provide itemized wage statements.
The putative lead plaintiff’s requested remedies include compensatory and punitive damages, injunctive relief, disgorgement of profits, and
reasonable attorneys’ fees and costs. No specific amount of damages sought was specified in the complaint. The Company was served with the
complaint on March 3, 2014. While the Company intends to vigorously defend against this action, including its class certification, the ultimate
outcome of the case is presently not determinable as it is in a preliminary phase. Thus, the Company cannot at this time determine the likelihood
of an adverse judgment nor a likely range of damages in the event of an adverse judgment. Any settlement of, or judgment with a negative
outcome arising from, this lawsuit could have a material adverse effect.
The Company is also involved in various other claims and legal actions that arise in the ordinary course of business. The Company does not
believe that the ultimate resolution of these other actions will have a material adverse effect on the Company’s financial position, results of
operations, liquidity, or capital resources. A significant increase in the number of claims, or an increase in amounts owing under successful
claims, could materially and adversely affect the Company’s business, financial condition, results of operations, and cash flows.
Purchasing Commitments
The Company has long-term beverage supply agreements with certain major beverage vendors. Pursuant to the terms of these arrangements,
marketing rebates are provided to the Company and its franchisees from the beverage vendors based upon the dollar volume of purchases for
system-wide restaurants which will vary according to their demand for beverage syrup and fluctuations in the market rates for beverage syrup.
These contracts have terms extending into 2017 with an estimated Company obligation totaling $18.5 million.
At December 31, 2014, the Company’s total estimated commitment to purchase chicken was $704,000.
91
For the Years Ended
December 31,
2014
December 25,
2013
December 26,
2012
Weighted-average shares outstanding—Basic
32,285,484
28,712,622
28,712,194
Dilutive effect of stock options and restricted shares
2,060,757
—
—
Weighted
-
average shares outstanding
—
Diluted
34,346,241
28,712,622
28,712,194