El Pollo Loco 2016 Annual Report Download - page 52

fooddistributor,dueprimarilytotheimpactofthe53rdweekin2014andachangein2014ofthepaymenttermstoourprimaryfooddistributortorealizeearly
paymentdiscounts
Infiscal2014,netcashprovidedbyoperatingactivitiesincreasedby$6.4millioncomparedtofiscal2013.Thiswasdueprimarilyto(i)increasedrevenuedue
primarilytocompany-operatedcomparablerestaurantssalesgrowth,and(ii)lowerinterestpaymentsduetothe2013RefinancingandourIPO,themajorityofthe
proceedsofwhichwereusedtorepaythe2013SecondLienTermLoan.Theincreasesabovewerepartiallyoffsetbyareductioninpayablebalancetoourprimary
fooddistributor,whichresultedinearlypaydiscountsandlowercosttotheCompany.
Investing Activities
Infiscal2015,netcashusedininvestingactivitiesincreasedby$9.4millioncomparedtofiscal2014.Thiswasdueprimarilytoincreasedcapitalexpenditures
relatedtonewrestaurants,andthesalesproceedsfromtheSanAntoniotransactionreceivedinfiscal2014.Infiscal2015,weincurredcapitalexpendituresof
approximately$30.8million,consistingof$17.4millionrelatedtonewrestaurants,$6.3millionrelatedtotheremodelingofexistingrestaurants,and$7.1million
relatedtomaintenance,thecapitalizationofdevelopmentcostsandothercorporatecapitalexpenditures.
Infiscal2014,cashusedininvestingactivitiesincreasedby$7.6millioncomparedtofiscal2013.Thiswasdueprimarilytoincreasedcapitalexpendituresrelated
tonewrestaurants,partiallyoffsetbysalesproceedsfromtheSanAntoniotransaction.Infiscal2014,weincurredcapitalexpendituresofapproximately$26.8
million,consistingof$15.6millionrelatedtonewrestaurants,$7.5millionrelatedtotheremodelingofexistingrestaurants,and$3.7millionrelatedto
maintenanceandothercorporatecapitalexpenditures.
Financing Activities
Infiscal2015,netcashusedbyfinancingactivitiesincreasedby$22.3millioncomparedtofiscal2014.Thiswasdueprimarilytothepre-paymentof$42.0million
onourRevolverin2015.
Infiscal2014,netcashusedbyfinancingactivitiesdecreasedby$0.2millioncomparedtofiscal2013.ThiswasdueprimarilytoproceedsfromourIPOwhich
wereusedfortherepaymentofthe2013CreditAgreements,alongwithcashfromourbalancesheet.
Debt and Other Obligations
New Credit Agreement
OnDecember11,2014,werefinancedourdebt,withEPL,Intermediate,andHoldingsenteringintoacreditagreementwithBankofAmerica,N.A.,as
administrativeagent,swinglinelender,andletterofcreditissuer,thelenderspartythereto,andtheotherpartiesthereto,whichprovidesforthe2014Revolver.The
2014Revolverincludesasublimitof$15millionforlettersofcreditandasublimitof$15millionforswinglineloans.AtDecember30,2015,$7.2millionof
lettersofcreditwereoutstandingand$69.8millionwasavailabletoborrowundertherevolvinglineofcredit.The2014Revolverwillmatureonorabout
December11,2019.
Borrowingsunderthe2014Revolver(otherthananyswinglineloans)bearinterest,attheborrower’soption,atratesbaseduponeitherLIBORorabaserate,plus,
foreachrate,amargindeterminedinaccordancewithalease-adjustedconsolidatedleverageratio-basedpricinggrid.Thebaserateiscalculatedasthehighestof
(a)thefederalfundsrateplus0.50%,(b)theprimerateofBankofAmerica,or(c)LIBORplus1.00%.ForLIBORloans,themarginisintherangeof1.75%to
2.50%,andforbaserateloansthemarginisintherangeof0.75%and1.50%.Themarginwasinitiallysetat2.00%forLIBORloansandat1.00%forbaserate
loansuntilthedeliveryoffinancialstatementsandacompliancecertificateforthefirstquarterof2015.Theinterestraterangewas1.94%to2.63%duringfiscal
2015andwas2.02%atDecember30,2015.
The2014Revolverincludesanumberofnegativeandfinancialcovenants,including,amongothers,thefollowing(allsubjecttocertainexceptions):amaximum
lease-adjustedconsolidatedleverageratiocovenant,aminimumconsolidatedfixedchargecoverageratio,andlimitationsonindebtedness,liens,investments,asset
sales,mergers,consolidations,liquidations,dissolutions,restrictedpayments,andnegativepledges.The2014Revolveralsoincludescertaincustomaryaffirmative
covenantsandeventsofdefault.WewereincompliancewithallsuchcovenantsatDecember30,2015.
Underthe2014Revolver,Holdingsmaynotmakecertainpaymentssuchascashdividends,exceptthatitmay,interalia,(i)payupto$1millionperyearto
repurchaseorredeemqualifiedequityinterestsofHoldingsheldbypastorpresentofficers,directors,oremployees(ortheirestates)oftheCompanyupondeath,
disability,orterminationofemployment,(ii)payunderitsincometaxreceivableagreement(the“TRA”),and,(iii)solongasnodefaultoreventofdefaulthas
occurredandiscontinuing,(a)makenon-cashrepurchasesofequityinterestsinconnectionwiththeexerciseofstockoptionsbydirectorsandofficers,provided
thatthoseequityinterestsrepresent
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