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Diversified Restaurant Holdings Reports 2013 Third Quarter Revenue Growth Of 57%

By: Diversified Restaurant Holdings, Inc. |  0 Shares     76 Reads

• Achieved third quarter revenue of $26.4 million; up 57% over prior-year period
  
• Consolidated comparable restaurant sales increased 3.7% in the third quarter 
  
• Adjusted EBITDA, a non-GAAP measure⁽¹⁾, nearly doubles in third quarter to $3.0 million;Restaurant-level EBITDA increased 47% to $4.6 million
  
• Fiscal 2014 revenue of $127.0 million to $133.0 million expected with 11 new locations planned

SOUTHFIELD, Mich. - Nov. 13, 2013 // GLOBE NEWSWIRE // - Diversified Restaurant Holdings, Inc. (Nasdaq:BAGR) ("DRH" or the "Company"), the creator, developer, and operator of the unique, full-service, ultra-casual restaurant and bar Bagger Dave's Freshly-Crafted Burger Tavern® ("Bagger Dave's") and one of the largest franchisees for Buffalo Wild Wings® ("BWW"), today announced results for the third quarter and nine-month period ended September 29, 2013.

Third quarter revenue of $26.4 million was up $9.6 million, or 56.5%, from the third quarter of 2012. Sales growth was primarily driven by the addition of 20 new restaurants since last year's period, which included eight acquired BWW in September 2012. Comparable restaurant sales increased 3.7% on a consolidated basis for the third quarter of 2013. There were 36 comparable restaurants for the period, which included 30 BWW and six Bagger Dave's. Two-year comparable sales grew 11.2%.

"We continued to successfully execute our growth strategy and delivered solid results while operating in what are traditionally slow summer months. We opened two new locations in the quarter and are on track to open a total of ten restaurants this year," commented Michael Ansley, President and CEO of DRH. "Our Bagger Dave's brand continues to strengthen and we are poised to further expand our brand awareness with sound site selection, aggressive marketing that focuses on the quality and freshness of our food, and the continual improvements that drive customer service levels and provide competitive advantages."

At the end of the third quarter, the Company had 50 restaurants operating, comprised of 15 Bagger Dave's and 35 BWW. This was an increase of 66.7% from 30 restaurants at the end of the prior-year third quarter. DRH expects to end the year with 55 restaurants.

Net income in the third quarter of 2013 was $0.1 million compared with $0.2 million in the same period of the prior year.

Third Quarter Operating Results

Food, beverage, and packaging costs as a percentage of revenue decreased 120 basis points to 29.4% in the 2013 third quarter from 30.6% in the third quarter of 2012. The improvement was due to lower chicken wing pricing.

Compensation costs increased $2.8 million to $7.0 million in the third quarter of 2013, primarily due to staffing additional restaurants. As a percentage of revenue, compensation costs were 26.4% and 24.8% in third quarter of 2013 and 2012, respectively.

Total restaurant operating costs in the 2013 third quarter were $21.8 million, or 82.6% of revenue, compared with $13.7 million, or 81.4% of revenue, in the prior-year period.

Third quarter of 2013 general and administrative costs as a percentage of revenue improved 360 basis points to 5.9% from the prior-year period of 9.5%. The inherent operational leverage from higher sales and cost discipline drove the improvement.

Third quarter pre-opening costs were $0.6 million compared with $0.3 million, and reflect the two new restaurants that were opened during the period and expenses associated with planned openings in the fourth quarter, along with a relocation planned for early 2014. There was one opening and fewer in-progress openings in last year's third quarter. Pre-opening costs, which have averaged about $225 thousand per restaurant in 2013, can vary from quarter to quarter depending on the location, number, and timing of openings.

Depreciation and amortization increased to $2.1 million in the third quarter of 2013 from $1.0 million in the 2012 third quarter, a reflection of the capital investments made over the past year.

Restaurant-level EBITDA increased 47.0% to $4.6 million for the third quarter of 2013 from the same period of the prior year. Adjusted EBITDA was $3.0 million, or 11.5% of revenue, for the 2013 third quarter, compared with $1.5 million, or 9.0% of revenue, in the third quarter of 2012. (1)DRH believes that, when used in conjunction with GAAP measures, restaurant-level EBITDA and adjusted EBITDA, which are non-GAAP measures, provide additional information related to its operating performance. (See reconciliation of restaurant-level EBITDA and adjusted EBITDA in the supplemental tables included at the end of this release.)

Interest expense was $0.3 million in the third quarter of 2013 and 2012, respectively.

Year-to-Date Review

Total revenue for the nine months ended September 29, 2013 was $80.4 million, an increase of $29.1 million, or 56.7%, over the same period in 2012, which ended September 23, 2012. A significant portion of the increase, approximately $26.2 million, was attributable to revenue generated from new locations. Consolidated comparable restaurant sales were up $2.9 million, or 4.6%, in the first nine months of 2013 compared with last year's period.

Restaurant-level EBITDA was $14.5 million and $9.6 million for the year-to-date periods of 2013 and 2012, respectively. Adjusted EBITDA increased 81.9% to $9.6 million for the first nine months of 2013 from $5.3 million in the corresponding period of 2012. As a percentage of revenue, Adjusted EBITDA was up 160 basis points to 11.9%. (See reconciliation of restaurant-level EBITDA and adjusted EBITDA in the supplemental tables included at the end of this release.)

For the first nine months of 2013, net income attributable to DRH was $0.3 million, or $0.01 per diluted share, compared with $0.8 million, or $0.04 per diluted share, for the 2012 period. Adjusted net income for the first nine months of 2013, which excludes non-recurring expenses associated with the Company's listing on the NASDAQ and debt restructuring activities, was $0.5 million, or $0.02 per diluted share. (See the reconciliation between GAAP Net Income and Adjusted Net Income in the supplemental table included in this release.)

Cash flow from operations for the first nine months of 2013 was relatively consistent year-over-year at $5.8 million.

Solid Balance Sheet Provides Flexibility for Continued Growth

Cash, cash equivalents and investments were $20.5 million at September 29, 2013, compared with $22.4 million at the end of the second quarter and $2.7 million at December 30, 2012. The Company issued 6.9 million shares in an underwritten, follow-on equity offering in April for net proceeds of $31.9 million, of which $10.0 million was used to pay down the Company's $63.0 million credit facility. The Company believes that its existing cash, cash from operations, and the credit facility will be sufficient to meet its operational funding, development, and obligations for at least the next 12 months.

Capital expenditures were $17.3 million during the first nine months of 2013 compared with $7.2 million during the first nine months of 2012, and reflect new restaurant development. For 2013, DRH estimates capital expenditures to be up to $27.0 million, down from its original projection of $29.0 million, with the majority focused on new restaurants.

Fiscal 2013 Guidance and 2014 Outlook

DRH is on track to open 10 new locations in 2013, with four additional restaurants planned before the end of the year. One Bagger Dave's has already opened during the 2013 fourth quarter.

DRH tightened and adjusted its guidance for fiscal 2013. Revenue for fiscal 2013 is expected to be around $110.0 million. The Company's restaurant-level EBITDA range for fiscal 2013 is expected to be approximately $20.0 million to $20.5 million while adjusted EBITDA for fiscal 2013 is expected to be between $13.0 million and $13.5 million.

"We remain very optimistic in both the long-term outlook of our existing markets and our ability to continue our restaurant expansion," commented Mr. Ansley. "We believe there are many opportunities to expand our business and, in early 2014, we expect to roll out the mobile payment app for our Bagger Dave's loyalty program. We are also introducing enhanced and expanded food options which we believe will drive recurring customer visits. For instance, we are adding chicken to the menu which will provide a variety of additional options for adults and children as well as enhance our existing salad selections."

Mr. Ansley continued, "New restaurant development is a critical component of our strategy and we plan to open 11 new locations next year, with much of the pipeline well along the development schedule. As in 2013, the openings planned for next year will continue to focus on penetrating and driving awareness in our existing geographic footprint."

For fiscal 2014, the Company provided the following outlook:

• Open eight Bagger Dave's locations in Michigan and Indiana, a 42.1% unit increase over the total units expected by the end of 2013
• Open three Buffalo Wild Wings restaurants, relocate two, and remodel two
• Revenue in the range of $127.0 million to $133.0 million

Webcast and Conference Call

DRH will host a conference call and webcast on Thursday, November 14, 2013 at 10:00 a.m. Eastern Time, during which management will review the financial and operating results for the third quarter and discuss its corporate strategies and outlook. The review will be accompanied by a slide presentation which will be made available prior to the conference call on the Company's website at www.diversifiedrestaurantholdings.com. A question and answer session will follow.

The teleconference can be accessed by calling (201) 493-6780. The webcast can be monitored on the Company's website at www.diversifiedrestaurantholdings.com.

A telephonic replay will be available from 1:00 p.m. Eastern Time on the day of the teleconference through Thursday, November 21, 2013. To listen to a replay of the call, dial (858) 384-5517 and enter the conference ID number 10000465. An archive of the webcast will be available on the Company's website and will include a transcript, once available.

About Diversified Restaurant Holdings

Diversified Restaurant Holdings, Inc. ("DRH" or the "Company") is the creator, developer, and operator of the unique, full-service, ultra-casual restaurant concept, Bagger Dave's Freshly-Crafted Burger Tavern® ("Bagger Dave's") and one of the largest Buffalo Wild Wings® ("BWW") franchisees. Between the two concepts, the Company currently operates 50 corporate-owned restaurants in Michigan, Florida, Illinois, and Indiana, and one franchised Bagger Dave's in Missouri, for a total of 51 restaurants. The Company routinely posts news and other important information on its website 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, accompanied by more than 30 toppings from which to choose, along with fresh-cut fries, hand-dipped milkshakes, and a selection of craft beer and wine. Signature items include Sloppy Dave's BBQ®, Train Wreck Burger®, and Bagger Dave's Amazingly Delicious Turkey Black Bean Chili®. 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. Currently, there are 15 corporate-owned locations and one franchised location. For more information, visit www.baggerdaves.com.

DRH operates 35 BWW restaurants (17 in Michigan, 10 in Florida, 4 in Illinois, and 4 in Indiana), including the nation's largest BWW, based on square footage, in downtown Detroit, Michigan. The Company is on track to fulfill its area development agreement with franchisor Buffalo Wild Wings, Inc. (Nasdaq:BWLD) and plans to operate approximately 48 BWW restaurants by the end of 2017.

Safe Harbor Statement

The information made available in this news release contains forward-looking statements which reflect DRH'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 DRH. Forward-looking statements contained herein speak only as of the date made and, thus, DRH 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.

 

FINANCIAL TABLES TO FOLLOW

DIVERSIFIED RESTAURANT HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
	Three Months Ended		Nine Months Ended
	September 29  2013	September 23  2012	September 29  2013	September 23  2012
Revenue	$26,368,090	$16,844,492	$80,410,174	$51,323,301
Operating expenses
Restaurant operating costs (exclusive of depreciation and amortization shown separately below):
Food, beverage, and packaging	7,759,146	5,157,991	24,336,433	15,904,293
Compensation costs	6,972,432	4,174,875	20,903,931	12,840,361
Occupancy	1,600,278	961,610	4,704,380	2,787,327
Other operating costs	5,436,252	3,419,716	16,100,223	10,198,008
General and administrative expenses	1,558,924	1,606,495	5,058,879	4,328,555
Pre-opening costs	639,498	281,390	2,036,022	547,876
Depreciation and amortization	2,070,841	1,000,191	5,539,874	2,930,606
Loss on disposal of property and equipment	22,970	23,374	83,711	29,977
Total operating expenses	26,060,341	16,625,642	78,763,453	49,567,003
Operating profit	307,749	218,850	1,646,721	1,756,298
Change in fair value of derivative instruments	--	--	--	(43,361)
Interest expense	(320,798)	(277,919)	(1,375,646)	(843,563)
Other income, net	68,415	314,421	92,958	362,160
Income before income taxes	55,366	255,352	364,033	1,231,534
Income tax provision (benefit)	(14,444)	(2,158)	52,186	333,387
Net income	$ 69,810	$ 257,510	$ 311,847	$ 898,147
Less: (Income) attributable to noncontrolling interest	$ --	$ (16,314)	$ --	$ (95,040)
Net income attributable to DRH	$ 69,810	$ 241,196	$ 311,847	$ 803,107
Basic earnings per share	$ 0.00	$ 0.01	$ 0.01	$ 0.04
Fully diluted earnings per share	$ 0.00	$ 0.01	$ 0.01	$ 0.04
Weighted average number of common shares outstanding
Basic	26,054,118	18,954,025	23,231,403	18,948,624
Diluted	26,186,263	19,104,577	23,351,129	19,088,856

DIVERSIFIED RESTAURANT HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS	September 29 2013 (UNAUDITED)	December 30  2012
Current assets
Cash and cash equivalents	$ 13,156,350	$ 2,700,328
Investments	7,387,672	--
Accounts receivable	384,947	248,403
Inventory	1,109,148	809,084
Prepaid assets	514,970	447,429
Total current assets	22,553,087	4,205,244
Deferred income taxes	850,407	846,746
Property and equipment, net	52,002,133	40,286,490
Intangible assets, net	2,856,609	2,509,337
Goodwill	8,578,776	8,578,776
Other long-term assets	417,412	118,145
Total assets	$ 87,258,424	$56,544,738
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$ 4,711,947	$ 3,952,017
Accrued compensation	1,296,271	1,647,075
Other accrued liabilities	905,348	1,013,369
Current portion of long-term debt	7,489,859	6,095,684
Current portion of deferred rent	305,161	226,106
Total current liabilities	14,708,586	12,934,251
Deferred rent, less current portion	2,809,880	2,274,753
Unfavorable operating leases	767,764	849,478
Other liabilities - interest rate swap	377,778	430,751
Long-term debt, less current portion	34,559,465	38,551,601
Total liabilities	$ 53,223,473	$55,040,834
Stockholders' equity
Common stock - $0.0001 par value; 100,000,000 shares authorized; 26,095,575 and 18,951,700, respectively, issued and outstanding	2,580	1,888
Additional paid-in capital	35,191,324	2,991,526
Accumulated other comprehensive loss	(265,585)	(284,294)
Accumulated deficit	(893,369)	(1,205,216)
Total stockholders' equity	34,034,951	1,503,904
Total liabilities and stockholders' equity	$ 87,258,424	$56,544,738

DIVERSIFIED RESTAURANT HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
	Nine Months Ended
	September 29  2013	September 23,  2012
Cash flows from operating activities
Net income	$ 311,847	$ 898,147
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	5,539,873	2,930,606
Write off of loan fees	76,408	694
Loss on disposal of property and equipment	83,711	29,977
Share-based compensation	205,668	165,427
Change in fair value of derivative instruments	--	43,361
Deferred income taxes	(13,248)	232,932
Changes in operating assets and liabilities that provided (used) cash
Accounts receivable	(136,544)	(427,511)
Inventory	(300,064)	3,225
Prepaid assets	(67,541)	35,714
Intangible assets	(546,830)	62,356
Other long-term assets	(299,267)	(6,961)
Accounts payable	759,930	1,159,413
Accrued liabilities	(458,825)	261,091
Deferred rent	614,182	384,872
Net cash provided by operating activities	5,769,300	5,773,343
Cash flows from investing activities
Purchases of property and equipment	(17,297,791)	(7,213,512)
Purchases of available-for-sale securities	(12,690,397)	--
Proceeds from sale of available-for-sale securities	5,278,048	--
Net cash used in investing activities	(24,710,140)	(7,213,512)
Cash flows from financing activities
Proceeds from issuance of long-term debt	55,862,559	20,270,332
Repayment of interest rate swap liability	--	(657,360)
Repayments of long-term debt	(58,460,520)	(16,600,218)
Proceeds from sale of common stock, net of underwriter fees	31,994,823	--
Distributions from noncontrolling interest	--	(40,000)
Net cash provided by financing activities	29,396,862	2,972,754
Net increase in cash and cash equivalents	10,456,022	1,532,585
Cash and cash equivalents, beginning of period	2,700,328	1,537,497
Cash and cash equivalents, end of period	$ 13,156,350	$ 3,070,082

DIVERSIFIED RESTAURANT HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation Between GAAP Net Income and Adjusted Net Income
	Three Months Ended		Nine Months Ended
	September 29  2013	September 23  2012	September 29  2013	September 23 2012
Net income attributable to DRH, as reported	$ 69,810	$ 241,196	$ 311,847	$ 803,107
NASDAQ listing expenses, net of tax (1)	--	--	91,700	--
Financing fees, net of tax (2)	--	--	53,900	--
Adjusted net income	$ 69,810	$ 241,196	$ 457,447	$ 803,107
Adjusted basic earnings per share	$ 0.00	$ 0.01	$ 0.02	$ 0.04
Adjusted diluted earnings per share	$ 0.00	$ 0.01	$ 0.02	$ 0.04
Weighted average number of common shares outstanding:
Basic	26,054,118	18,954,025	23,231,403	18,948,624
Diluted	26,186,263	19,104,577	23,351,129	19,088,856
Notes to reconciliation of GAAP Net Income to Adjusted Net Income:
(1) Reflects $131,000 of non-recurring fees associated with the Company listing on the NASDAQ exchange, net of an estimated 30.0% effective tax rate.
(2) Reflects $77,000 of non-recurring expenses associated with the Company's debt restructuring activities, net of an estimated 30.0% effective tax rate.

DIVERSIFIED RESTAURANT HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation Between Net Income and EBITDA, Restaurant-Level EBITDA and
Adjusted EBITDA
	Three Months Ended		Nine Months Ended
	September 29  2013	September 23  2012	September 29  2013	September 23  2012
Net income attributable to DRH, as reported	$ 69,810	$ 241,196	$ 311,847	$ 803,107
+ Income tax provision (benefit)	(14,444)	(2,158)	52,186	333,387
+ Change in fair value of derivative instruments	--	--	--	43,361
+ Interest expense	320,798	277,919	1,375,646	843,563
+ Other income, net	(68,415)	(314,421)	(92,958)	(362,160)
+ Loss on disposal of property and equipment	22,970	23,374	83,711	29,977
+ Depreciation and amortization	2,070,841	1,000,191	5,539,874	2,930,606
+ Income attributable to noncontrolling interest	--	16,314	--	95,040
EBITDA	$ 2,401,560	$ 1,242,415	$ 7,270,306	$ 4,716,881
+ Pre-opening costs	639,498	281,390	2,036,022	547,876
+ Non-recurring expenses	--	--	271,000	--
Adjusted EBITDA	$ 3,041,058	$ 1,523,805	$ 9,577,328	$ 5,264,757
Adjusted EBITDA margin (%)	11.5%	9.0%	11.9%	10.3%
+ Adjusted General and administrative	1,558,924	1,606,495	4,927,879	4,328,555
Restaurant–Level EBITDA	$ 4,599,982	$ 3,130,300	$ 14,505,207	$ 9,593,312
Restaurant–Level EBITDA margin (%)	17.4%	18.6%	18.0%	18.7%

Restaurant-Level EBITDA represents net income (loss) attributable to DRH plus the sum of non-restaurant specific general and administrative expenses, restaurant pre-opening costs, loss on property and equipment disposals, the change in fair value of derivative instruments, depreciation and amortization, other income and expenses, interest, taxes, income attributable to noncontrolling interest and non-recurring acquisition related expenses in Q1 2013 and non-recurring expenses related to the NASDAQ listing in Q2 2013. Adjusted EBITDA represents net income (loss) attributable to DRH plus the sum of restaurant pre-opening costs, loss on property and equipment disposals, the change in fair value of derivative instruments, depreciation and amortization, other income and expenses, interest, taxes, income attributable to noncontrolling interest, and non-recurring expenses. We are presenting Restaurant-Level EBITDA and Adjusted EBITDA, which are not presented in accordance with GAAP, because we believe they provide an additional metric by which to evaluate our operations. When considered together with our GAAP results and the reconciliation to our net income, we believe they provide a more complete understanding of our business than could be obtained absent this disclosure. We use Restaurant-Level EBITDA and Adjusted EBITDA, together with financial measures prepared in accordance with GAAP, such as revenue, income from operations, net income, and cash flows from operations, to assess our historical and prospective operating performance and to enhance the understanding of our core operating performance. Restaurant-Level EBITDA and Adjusted EBITDA are presented because: (i) we believe they are useful measures for investors to assess the operating performance of our business without the effect of non-cash depreciation and amortization expenses; (ii) we believe investors will find these measures useful in assessing our ability to service or incur indebtedness; and (iii) they are used internally as benchmarks to evaluate our operating performance or compare our performance to that of our competitors.

Additionally, we present Restaurant-Level EBITDA because it excludes the impact of general and administrative expenses and restaurant pre-opening costs, both which are non-recurring at the restaurant level. The use of Restaurant-Level EBITDA thereby enables us and our investors to compare our operating performance between periods and to compare our operating performance to the performance of our competitors. The measure is also widely used within the restaurant industry to evaluate restaurant level productivity, efficiency, and performance. The use of Restaurant-Level EBITDA and Adjusted EBITDA as performance measures permits a comparative assessment of our operating performance relative to our performance based on GAAP results, while isolating the effects of some items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies. Companies within our industry exhibit significant variations with respect to capital structure and cost of capital (which affect interest expense and tax rates) and differences in book depreciation of property and equipment (which affect relative depreciation expense), including significant differences in the depreciable lives of similar assets among various companies. Our management team believes that Restaurant-Level EBITDA and Adjusted EBITDA facilitate company-to-company comparisons within our industry by eliminating some of the foregoing variations.

Restaurant-Level EBITDA and Adjusted EBITDA are not determined in accordance with GAAP and should not be considered in isolation or as an alternative to net income, income from operations, net cash provided by operating, investing, or financing activities, or other financial statement data presented as indicators of financial performance or liquidity, each as presented in accordance with GAAP. Neither Restaurant-Level EBITDA nor Adjusted EBITDA should be considered as a measure of discretionary cash available to us to invest in the growth of our business. Restaurant-Level EBITDA and Adjusted EBITDA as presented may not be comparable to other similarly titled measures of other companies and our presentation of Restaurant-Level EBITDA and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual items. Our management recognizes that Restaurant-Level EBITDA and Adjusted EBITDA have limitations as analytical financial measures, including the following:

• Restaurant-Level EBITDA and Adjusted EBITDA do not reflect our current capital expenditures or future requirements for capital expenditures;
• Restaurant-Level EBITDA and Adjusted EBITDA do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, associated with our indebtedness;
• Restaurant-Level EBITDA and Adjusted EBITDA do not reflect depreciation and amortization, which are non-cash charges, although the assets being depreciated and amortized will likely have to be replaced in the future, nor do Restaurant-Level EBITDA and Adjusted EBITDA reflect any cash requirements for such replacements;
• Restaurant-Level EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;
• Restaurant-Level EBITDA and Adjusted EBITDA do not reflect disposals or other non-recurring income and expenses;
• Restaurant-Level EBITDA and Adjusted EBITDA do not reflect changes in fair value of derivative instruments;
• Restaurant-Level EBITDA and Adjusted EBITDA do not reflect restaurant pre-opening costs; and
• Restaurant-Level EBITDA does not reflect general and administrative expenses.

Contacts:

Investor
Craig P. Mychajluk
Kei Advisors LLC
716.843.3832
cmychajluk@keiadvisors.com

Company
David G. Burke
Chief Financial Officer
248.223.9160
Diversified Restaurant Holdings, Inc.

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