Source: Wingstop Inc.
March 14, 2022

Wingstop Inc., completed a securitized financing transaction on March 9, 2022, which included the issuance of a new series of $250 million of securitized notes (the "Notes"). The Series 2022-1 Class A-2 Senior Secured Notes are subject to 1% annual amortization, bear interest at a rate of 3.734% per annum, and have an anticipated repayment date of March 2029. Interest and principal payments on the Notes are payable on a quarterly basis.

In addition to the Notes, the Company also entered into a $200 million variable funding note facility, which will allow the Company to borrow amounts as needed on a revolving basis and will replace the existing $50 million variable funding note facility. The variable funding note facility was undrawn at closing.

"Today's announcement underscores the strength of our model and our ability to return capital to shareholders. Since our IPO, and including this $4.00 special dividend, we have returned more than $645 million of capital to shareholders," commented Charlie Morrison, Chairman and Chief Executive Officer of Wingstop. "This transaction and the implementation of a $200M VFN strengthens our liquidity position and positions us to support our strategic growth initiatives to provide best-in-class returns for our Brand Partners."

In conjunction with the completion of the securitized financing transaction, the Board of Directors has authorized and declared a special dividend of $4.00 per share of common stock payable to stockholders of record as of March 24, 2022, to be paid on April 7, 2022.

In addition to the special cash dividend payment, the repayment of the existing securitized financing indebtedness and transaction costs, the Company intends to use the additional net proceeds from the Notes to strengthen its liquidity position and for general corporate purposes.

While the tax treatment of the special dividend cannot be concluded with certainty until 2023, the Company expects approximately 50% - 60% of the special dividend to be in excess of the Company's earnings and profits, with the remaining 40% - 50% treated as a dividend. Stockholders are encouraged to consult with their financial and tax advisers regarding the circumstances of their individual situation. Stockholders who sell their shares prior to the March 24, 2022 ex-dividend date will also sell their right to receive the special dividend.

Financial Outlook

After completing the securitized financing transaction, the Company is providing the following updates to its outlook for the fiscal year ending December 31, 2022:

- Interest expense of approximately $23.5 million;
- An effective tax rate of approximately 27 - 28%; and
- Loss on debt extinguishment and transaction costs of approximately $1.0 million

Photo Credit: Wingstop Inc.