EPL Intermediate, Inc. Announces Results for the 13 Weeks and 39 Weeks Ended September 30, 2009

EPL Intermediate, Inc., parent company of El Pollo Loco, Inc., today reported results for its 13 weeks third quarter and 39 weeks ended September 30, 2009. For purposes of simplicity, the Company has described its third quarters ended September 30, 2009 and September 24, 2008 as September 30, 2009 and September 30, 2008, respectively.

El Pollo Loco reported operating revenue for the 13-week third quarter ended September 30, 2009 of $68.5 million, which is a decrease of $6.4 million, or 8.5%, below operating revenue for the 13-week quarter ended September 30, 2008 of $74.9 million. Operating revenue includes sales at company-operated stores and franchise revenue. The decrease in company-operated restaurant revenue was primarily attributed to a 9.1% decrease in company-operated same-store sales for the third quarter of 2009 compared to the third quarter of 2008. The decrease was also due to lost sales of $0.7 million from the closure of three company-operated restaurants in 2008 and one company-operated restaurant in 2009, partially offset by an increase in restaurant revenue of $0.1 million from five restaurants opened in 2008 and by $0.7 million from three restaurants opened in 2009.

Franchise revenue decreased $0.4 million, or 9.0%, to $4.8 million for the 13 weeks ended September 30, 2009 from $5.2 million for the 13 weeks ended September 30, 2008. The decrease is due primarily to lower royalties and percentage rent income, which are based on sales, resulting from an 11.0% decrease in franchise-operated same-store sales for the 2009 period compared to the 2008 period.

Same-store sales for the system (includes both company and franchise locations) decreased 10.1% in the third quarter of 2009. Restaurants enter the comparable restaurant base for same-store sales the first full week after that restaurant's 15-month anniversary.

Commenting on results for the third quarter of 2009, Stephen E. Carley, president and CEO of El Pollo Loco, Inc. said, 'Without a doubt we experienced our most challenging quarter to date. The depressed economy and disproportionately high level of unemployment in our core markets, and in particular among Hispanics which are a key demographic for our brand, contributed to lower traffic frequency and average check. Our efforts to build traffic and average check with promotions during the third quarter did not deliver the results we were looking for and reinforced the dramatic impact the economy is having on consumers' spending decisions. We continue to be keenly focused on striking the right balance between value and check performance.'

The Company had a net loss for the 13 weeks ended September 30, 2009 of $5.0 million compared to net income of $48,000 for the 13 weeks ended September 30, 2008.

Operating revenue for the 39-week period ended September 30, 2009 was $211.8 million, which was a decrease of $10.7 million, or 4.8%, from operating revenues for the 39 weeks ended September 30, 2008 of $222.5 million.

Same-store sales for the system decreased 7.6% for the 39 weeks ended September 30, 2009. This was comprised of a decrease of 7.2% in company-operated same-store sales and an 8.0% decrease in franchise-operated same store sales for the 39 weeks ended September 30, 2009.

The company had a net loss for the 39 weeks ended September 30, 2009 of $33.5 million compared to a net loss of $6.0 million for the 39 weeks ended September 30, 2008. The 2009 loss included an income tax expense of $23.0 million as the Company recorded a valuation allowance of $21.3 million against its deferred tax assets in the second quarter of 2009. The Company had an income tax benefit of $4.1 million for the 39-week period ended September 30, 2008.

Commenting on the remainder of the year and beyond, Carley said, 'Our entire system is focused on turning this difficult time into a defining chapter for our brand by aligning our employees, franchisees and business partners around a brand optimization platform that leverages our grilling expertise, focuses on exceeding our guests' expectations, and offers promotions that resonate with consumers seeking fresh, healthful, tasty food for themselves and their families during these tough economic times.'

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