El Pollo Loco 2016 Annual Report Download - page 37

3.1%.Thecompany-operatedcomparablesalesincreaseconsistedofa1.9%transactiondeclineanda2.9%checkgrowth.Infiscal2015,forcompany-operated
restaurants,ourannualAUVwas$1.9million,restaurantcontributionmarginwas21.7%,andAdjustedEBITDAwas$65.5million.
Company-Operated Restaurant Revenue
Company-operatedrestaurantrevenueconsistsofsalesoffoodandbeveragesincompany-operatedrestaurantsnetofpromotionalallowances,employeemeals,and
otherdiscounts.Company-operatedrestaurantrevenueinanyperiodisdirectlyinfluencedbythenumberofoperatingweeksinsuchperiod,thenumberofopen
restaurants,andcomparablerestaurantsales.
Seasonalfactorsandthetimingofholidayscauseourrevenuetofluctuatefromquartertoquarter.Ourrevenueperrestaurantistypicallylowerinthefirstand
fourthquartersduetoreducedJanuaryandDecembertrafficandhigherinthesecondandthirdquarters.Asaresultofseasonality,ourquarterlyandannualresults
ofoperationsandkeyperformanceindicatorssuchascompanyrestaurantrevenueandcomparablerestaurantsalesmayfluctuate.
Comparable Restaurant Sales
Wecloselymonitorcompany,franchise,andtotalsystemcomparablerestaurantsales.Comparablerestaurantsalesreflectthechangeinyear-over-yearsalesforthe
comparablecompany,franchise,andtotalsystemrestaurantbase.Wedefineourcomparablerestaurantbasetoincludethoserestaurantsopenfor15monthsor
longer.AsofDecember30,2015,December31,2014andDecember25,2013,therewere160,160,and165restaurants,respectively,inourcomparablecompany-
operatedrestaurantbase.AsofDecember30,2015,December31,2014,andDecember25,2013,therewere237,237,and227restaurants,respectively,inour
comparablefranchisedrestaurantbase.Thismeasurehighlightstheperformanceofexistingrestaurantsastheimpactofnewrestaurantopeningsisexcluded.
Comparablerestaurantsalesgrowthcanbegeneratedbyanincreaseinthenumberofmealssoldand/orbyincreasesintheaveragecheckamount,resultingfroma
shiftinmenumixand/orhigherpricesresultingfromnewproductsorpriceincreases.
Company-Operated Average Unit Volumes
Wemeasurecompany-operatedAUVsonbothaweeklyandanannualbasis.WeeklyAUVsconsistofcomparablerestaurantsalesoveraseven-dayperiodfrom
ThursdaytoWednesday.AnnualAUVsarecalculatedusingthefollowingmethodology:First,wedivideourtotalnetsalesforallcompany-operatedrestaurantsfor
thefiscalyearbythetotalnumberofrestaurantoperatingweeksduringthesameperiod.Second,weannualizethataverageweeklyper-restaurantsalesfigureby
multiplyingitby52.Anoperatingweekisdefinedasarestaurantopenforbusinessoveraseven-dayperiodfromThursdaytoWednesday.Thismeasurement
allowsmanagementtoassesschangesinconsumerspendingpatternsatourrestaurantsandtheoverallperformanceofourrestaurantbase.
Restaurant Contribution and Restaurant Contribution Margin
Restaurantcontributionandrestaurantcontributionmarginareneitherrequiredby,norpresentedinaccordancewith,accountingprinciplesgenerallyacceptedin
theUnitedStatesofAmerica(“GAAP”).Restaurantcontributionisdefinedascompany-operatedrestaurantrevenuelesscompanyrestaurantexpenses.Restaurant
contributionmarginisdefinedasrestaurantcontributionasapercentageofnetcompany-operatedrestaurantrevenue.Restaurantcontributionandrestaurant
contributionmarginaresupplementalmeasuresofoperatingperformanceofourrestaurants,andour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ourresultsasreportedunder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metricstoevaluatetheprofitabilityofincrementalsalesatour
restaurants,toevaluateourrestaurantperformanceacrossperiods,andtoevaluateourrestaurantfinancialperformancecomparedwithourcompetitors.
Areconciliationofrestaurantcontributionandrestaurantcontributionmargintocompany-operatedrestaurantrevenueisprovidedbelow:

 Fiscal Year
(Dollar amounts in thousands) 2015 2014 2013
Company-operated restaurant revenue  $ 332,040  $ 322,516  $ 294,327
Companyrestaurantexpenses   260,125   251,795   232,408
Restaurant contribution  $ 71,915  $ 70,721  $ 61,919
Restaurantcontributionmargin(%)   21.7%   21.9%   21.0%

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