Del Taco Restaurants — Levy Acquisition — SPAC Merger (April 2015)
35 slides from Del Taco Restaurants's SPAC merger presentation, Apr 15, 2015
Slide 1: Investor Presentation
Investor Presentation A 015
Slide 2: Disclaimer
fecal _ Disclaimer Det Taco i i in ha hi ha i i han ha hi ha ha han Li hn is i ha ha a ha ha han ho i ha ha ha hi a ha he a hi hn ts ‘This investor Presentation (the “Investor Presentation”) i for informational purposes only and does not constitute an offer to sell, 2 solicitation of an offer to buy
Slide 3: Disclaimer (Continued)
Disclaimer (Continued) BEEhico a in in in i is i hi i a has hin hin ha ha Lin hin hi hi ha ha ha han ha he hi hn hi ha han ie ha he i hn hs Dal Taco believes that theee non-GAAP mescurs of financial results provide uceful information to managament and investors regarding certain financial and busine
Slide 4: Management Attendees
Management Attendees pe tavo en Ci Bn nh lin lan hs nln he on linn hn an a hn han bn nn hn nln bn bn hn hn bo tn fn Larry Levy Chairman of the Board for both LAC and Del Taco Paul J.B. Murphy, III President & CEO EEE Sa Steven L. Brake EVP & CFO John D. Cappasola, Jr. EVP & Chief Brand Officer 7 Ari
Slide 5: Larry Levy: Proven Leader & Experienced Restaurateur
Larry Levy: Proven Leader & Experienced Restaurateur Detyaco Larry Levy Co-Founded Levy Restaurants in 1978 and Grew It from a Single Chicago Delicatessen into an International Food Service Company that Generates over $1 Billion in Revenue Proven Ability as a Value Adding Partner } Operational and I
Slide 6: Agenda
Agenda Investment Highlights = Growth Strategies Financial Overview = Transaction Overview
Slide 7: Investment Highlights
Investment Highlights Leading Mexican QSR Chain with Loyal Following Successful New Brand Strategy: “Combined Solutions” in Early Stages Our Position: We Start with Fresh & Serve with Value Our Food: UnFreshingBelievable® Our Menu: Diverse Menu Targets Broad Consumer Base Our Price: High Quality Foo
Slide 8: Del Taco at a Glance
Del Taco at a Glance = #2 Mexican QSR concept in the U.S." = Regional icon on West Coast Our Concept = Differentiated menu showcases a mix of Mexican-inspired cuisine and American classics System-wide sales of $656 million 304 Company / 243 Franchised Restaurants, 2014 Key $1.2 million System-wide A
Slide 9: Brand Positioning: We Start with Fresh & Serve with Value
is. Brand Positioning: We Start with Fresh & Serve with Value Det taco Del Taco Combines the Best Attributes from both QSR and Fast Casual. We call this @SR+ Casual High Quality Food and Dining Experience NOODLES ‘oconnai Fast Casual i i
Slide 10: Attractive Positioning in the Growing Mexican Category
Attractive Positioning in the Growing Mexican Category BEEhico = Mexican limited service restaurants ("LSR") sales are Positioned at the Intersection of Quality & Value ] ‘outperforming the broader restaurant industry » Del Taco has @difeentiated GSA positioning wth advantages ss over Taco Bell end
Slide 11: Accelerating Financial Performance Across the System
Accelerating Financial Performance Across the System BEEhico a in Ai Bn an i lin lan hs nln he on linn han han a hn hn hn nn hn hn nln bn bn hp hn hn ts fn ‘Same Store Sales Momentum Driven by Attractive Balance of Growth in Traffic and Check mCompary-operated Franchised —=-Welghted QSR Average 5.6%
Slide 12: Our Food: Fresh and High Quality
Our Food: Fresh and High Quality Real working kitchens High quality food made-to-order Marinated chicken freshly grilled in restaurant 100% real cheddar cheese grated fresh daily Whole pinto beans slow cooked in our kitchens Salsa made from scratch with fresh tomatoes and cilantro Working kitchens a
Slide 13: Our Price: Compelling Value Proposition
Our Price: Compelling Value Proposition BEEhico gio9s Average Check $10.17 36.49
Slide 14: High Quality Food at a Tremendous Value
High Quality Food at a Tremendous Value Menu Item Grilles Chicken Taco Description _ Freshy gtilee, marinated chicken, savory secret sauce, crisp letuce, anc freshly hand (gates ohcadar cheese, ina warm flour tert Price $1.00 Menu Item Description Freshly Price $4.00 Fall Asado Gries Chicken Boul il
Slide 15: Foundation of Our Model: Combined Solutions
; ; ; ¥% Foundation of Our Model: Combined Solutions Det taco Accelerating Ra Operations Improvements Best Practice Improvement Create a dramatically better guest experience Ambience Shake-Up Reimaged Stores with New Fresh Image Guest Experience DELTACO western Elevate the brand promise through ‘new
Slide 16: Growth Strategies
Increase Same Store Sales + Enhance.Restaurant Operations and Leverage Infrastructure (a 2) as | Expand our Restaurant Base Growth Strategies Det Taco
Slide 17: Increasing SSS through Our Tiered Menu Strategy
Increasing SSS through Our Tiered Menu Strategy Det taco Tiered Menu Strategy Provides Something for All Budgets and Dining Occasions EPIC BURRITOS’ | QUICK COMBOS ‘Tacos@ MORE BURRITOS AMERICAN GRILL _»EaTWELLvTH DxL* Profit Growth
Slide 18: Increasing SSS through Menu Innovation
Increasing SSS through Menu Innovation Innovative Food Platforms Track Record of Strong New Product Development f. State-Of-The-Art R&D Capabilities and Test Kitchen
Slide 19: Increasing SSS through Day-Part and Occasion Expansion
Increasing SSS through Day-Part and Occasion Expansion DetTaco Breakfast Day-Part Late-Night Day-Part Aligned day-part with brand position combined with _ ene ae 2 leveraging value and new product platforms maps GG IRCKED UP AT LAE NIGHT re See : Ys Way . yt 4 WN Wz ys 4 '@ dl Ve IS ay >, ho #Never2
Slide 20: Increasing SSS through Guest Engagement
Increasing SSS through Guest Engagement Latent Strengths Known Strengths Affordability Speed & Convenience “A freshly prepared cheese I've been going to Del Tat rs and | didn’t know und block of cheese, shredded burrito for $0.69, that's unbelievable they prepared the food fresh, on site... unbeliev
Slide 21: Increasing and Sustaining SSS through Our Ambiance Shake-Up
Increasing and Sustaining SSS through Our Ambiance Shake-Up pethico se hin inn lon han a la han hs finn in Lin han fan an han hn han hn ha hn bs hn nn an hp hn hn ho te hn ns fn Ambience Shake-Up: High impact restaurant reimage program focused on critical guest-facing elements Exterior refresh and i
Slide 22: Operations Improvements Creating a Better Guest Experience
Operations Improvements Creating a Better Guest Experience pethico ae hin inn on han ha la han hs finn he an Lin han fan hn han hn han hn ha hn es hn nn hn hn hn hn ho te fn ts fn We signiticantly improved overall guest satisfaction and generated higher "likelihood to return” and “recommend” scores
Slide 23: Accelerating Our Unit Growth
Accelerating Our Unit Growth BEEhico ioe 50-year heritage in core Southern California market with strong brand presence and meaningful new unit in-fill upside Success in multiple markets beyond Southern California, including Sacramento, Las Vegas, Denver, Salt Lake City and Phoenix Near-term growth
Slide 24: Significant Unit Growth Opportunity
Significant Unit Growth Opportunity BEEhico Unit Potential 2,300, 100% 1,054 2,000+ d Emerging / New Total US. Store Markets Potential
Slide 25: Our New Restaurant Prototype
Our New Restaurant Prototype BEEhico Design aligns brand Identity and QSR+ positioning Provides restaurant design needed to execute growth strategy New restaurant incorporates: Modern exterior with attractive interior features Quality cues evolved to include freshness cooler More open view of our fr
Slide 26: Attractive Company-Operated Unit Economic Model
Attractive Company-Operated Unit Economic Model BEEhico Year 3 Target ($Thousands) Average Unit Volume ~$1,350 Restaurant Contribution ~179 Margin’? 17% Net Investment Cost ~$900 Cash-on-Cash Return ~25%
Slide 27: Financial Overview
Financial Overview pesco
Slide 28: Financial Summary
Financial Summary Total Revenue Restaurant Contribution®) and Margin ¢$millions) ($millions) ‘Company Restaurant Sales s Franchise Revenue and Sublease Income $77.2 $4183 e712 $160 gees $596 $360.1 34023 2013 2018 858% 7 (arty 0O%/03%) 18% /02% 53% /5.2% “4.7580! Adjusted EBITDA® and Margin ¢$millfo
Slide 29: Industry Leading Food Cost Management
Industry Leading Food Cost Management torical Food Costs as a Percentage of Company Restaurant Sal 29.7% 29.6% oo 2012 2018 2014 2014 Food Costs as a Percentage of Company Restaurant Sales J 32.6% 52.7% 33.7% pita 28.7% 29.1%
Slide 30: Optimized Balance Sheet for Future Growth
Optimized Balance Sheet for Future Growth peice ni ia hin in hi i hin ha Li ha ha Li Lh hi ha han ha han a i hi ha ha la hi ha hin Li ha he, Li an hn = Transaction dramatically reduces Del Taco's overall debt balance and cost of debt, creating interest savings of over $13, million after Step 1 and w
Slide 31: Transaction Overview
Transaction Overview
Slide 32: Transaction Overview: Designed to De-Risk Merger
Transaction Overview: Designed to De-Risk Merger pe tavo Tale A Del Taco has signed a definitive agreement to merge with 2 subsidiay of Levy Acauisition Corp. (NASDAQ:*LEVY"). The merged ‘company will retain Del Taco's name and expects fo trade under tne NASDAQ ticker: “TACO” Transaction was structu
Slide 33: Illustrative Transaction Terms
Illustrative Transaction Terms pe tavo Step 1 - Sources and Uses Pro Forma Ownership" (Estimated) ‘Serta ors Tae ar cn and UST EOS SE co ew meta) soo SS eget) Hes Ee EEE est anes ses) all a can ans UT Teans SE ae Pan Sae Dl ao (Ser Canc ET enaning eau Ye Ale Hos fom in witaing on Vee nagerer Egat o
Slide 34: Appendix
Appendix
Slide 35: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation peice (SThousands) Fiscal Year Ended 2014 2013 2012 Net Loss $19,255) $16,539) $18,222) Non-GAAP adjustments: Provision for income taxes 1,098 80 1,999 Interest expense, net 30,895 35,613 38,291 Depreciation and amortization 18,752 19,850 17,699 EBITDA $41,490 $49,004