Diversified Restaurant Holdings Completes New $16 Million Credit Facility
Expects to Reduce Debt Service Costs by Over $750,000 Annually
SOUTHFIELD, Mich., April 12, 2012 // GLOBE NEWSWIRE // -- Diversified Restaurant Holdings, Inc. (OTCBB:DFRH) ("DRH" or the "Company"), the owner, operator, and franchisor of the unique, full-service, ultra-casual restaurant and bar Bagger Dave's Legendary Burgers Tavern(R) ("Bagger Dave's") and a leading franchisee for Buffalo Wild Wings(R) ("BWW"), announced on April 6, 2012 that it has entered into a new, seven-year senior secured term loan with RBS Citizens, N.A.
Through a fixed-rate swap arrangement, the term loan bears interest at a rate ranging from 3.91% to 4.81%, depending on the Company's lease adjusted leverage ratio. Principal and interest payments are amortized over seven years, with monthly principal payments of $190,476 plus accrued interest.
The loan will be used to repay approximately $15.7 million, or substantially all, of its current outstanding senior debt as well as the break-up cost for interest rate swap agreements that were used to fix a portion of the rates associated with its previous loan agreements. The remaining $0.3 million will be used for working capital and to support the Company's growth strategy.
David Burke, Chief Financial Officer of DRH commented, "This seven-year facility measurably reduces our borrowing costs and consolidates our borrowings at attractive terms and conditions while fitting well within our long-term capital strategy. The measurable reduction in interest expense also greatly improves our liquidity and earnings power. This new loan, together with our strong balance sheet, provides us the financial flexibility to continue to pursue our strategic growth objectives."
About Diversified Restaurant Holdings
Diversified Restaurant Holdings, Inc. ("DRH" or the "Company") is the owner, operator, and franchisor of the unique, full-service, ultra-casual restaurant concept, Bagger Dave's Legendary Burger Tavern(R) ("Bagger Dave's") and is a leading Buffalo Wild Wings(R) ("BWW") franchisee. Between the two concepts, the Company currently operates 28 restaurants in Michigan and Florida. The Company routinely posts news and other important information on its Web site at www.diversifiedrestaurantholdings.com.
Bagger Dave's offers a full-service, family-friendly restaurant and bar with a casual, comfortable atmosphere. The menu features freshly made burgers (never frozen), accompanied by more than 30 toppings from which to choose, fresh-cut fries, hand-dipped milkshakes, and a selection of craft beer and wine. Signature items include Sloppy Dave's BBQ(R), Train Wreck Burger(R), and Bagger Dave's Amazingly Delicious Turkey Black Bean Chili(R). The Bagger Dave's concept emphasizes local flair by showcasing historical photos of the city in which each restaurant resides and features an electric train that runs above the dining room and bar areas. Currently, there are six corporate-owned locations in the state of Michigan and an executed area development agreement to franchise six Bagger Dave's in five states outside of Michigan. DRH is approved to franchise Bagger Dave's in the states of Illinois, Indiana, Kentucky, Michigan, Missouri, Ohio, and Wisconsin. For more information, visit www.baggerdaves.com.
DRH operates 22 BWW restaurants: 14 in Michigan and eight in Florida. The Company continues to build new BWW restaurants in fulfillment of its 32-store Area Development Agreement ("ADA") with franchisor Buffalo Wild Wings, Inc. (Nasdaq:BWLD). This agreement, in addition to the six BWW restaurants opened prior to the ADA, suggests that the Company will operate 38 BWW restaurants in Michigan and Florida by 2017.
Safe Harbor Statement
The information made available in this news release contains forward-looking statements which reflect the Company's current view of future events, results of operations, cash flows, performance, business prospects and opportunities. Wherever used, the words "anticipate," "believe," "expect," "intend," "plan," "project," "will continue," "will likely result," "may," and similar expressions identify forward-looking statements as such term is defined in the Securities Exchange Act of 1934. Any such forward-looking statements are subject to risks and uncertainties and the Company's actual growth, results of operations, financial condition, cash flows, performance, business prospects and opportunities could differ materially from historical results or current expectations. Some of these risks include, without limitation, the impact of economic and industry conditions, competition, food and drug safety issues, store expansion and remodeling, labor relations issues, costs of providing employee benefits, regulatory matters, legal and administrative proceedings, information technology, security, severe weather, natural disasters, accounting matters, other risk factors relating to our business or industry and other risks detailed from time to time in the Securities and Exchange Commission filings of DFRH. Forward-looking statements contained herein speak only as of the date made and, thus, DFRH undertakes no obligation to update or publicly announce the revision of any of the forward-looking statements contained herein to reflect new information, future events, developments or changed circumstances or for any other reason.
Deborah K. Pawlowski Kei Advisors LLC
David Burke Chief Financial Officer