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Tuesday, October 03, 2006

Getting Ready for El Pollo Loco IPO



El Pollo Loco, a restaurant franchise and store operator of grilled chicken themed around Hispanic flavors and environment did file to come public under the NASDAQ ticker “LOCO.” Terms are not yet finalized, but the filing back in May indicated $135 million in proceeds. Bank of America, Merrill Lynch, Goldman Sachs, Piper Jaffray, and RBC Capital were listed as the proposed underwriters.

Its same-store sales growth annual average same-store sales growth was 5.4% since 2000 and system-wide same-store sales growth of 8.2% for fiscal 2005. As of June 28, 2006, it consisted of 146 company-operated and 195 franchised restaurants located primarily in California, with additional restaurants in Arizona, Nevada, Texas and Illinois. Company-operated restaurants generated an average unit value of $1.6 million and an average check of $8.90 in fiscal 2005.

As of June 28, its balance sheet was as follows:
Cash and Equivalent $1.678 million
Net property $70.8 million
Total Assets $508.2 million
Total Debt $258.2 million
Total stockholder equity $173.29 million

Its Income statement for the first half of 2006 was as follows:
Restaurant and franchise revenues: $129 million
Total operating costs: $112.76 million
Net income after tax and interest: $1.249 million

The company will use funds to repay existing debt under its credit facilities and will repurchase long-term debt. It and some of its affiliates will use funds for expansion capital as well.

Jon C. Ogg
October 3, 2006
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