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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Diversified Restaurant Holdings Inc | NASDAQ:SAUC | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 1.04 | 1.04 | 1.05 | 0 | 01:00:00 |
Nevada
|
03-0606420
|
(State or other jurisdiction
of incorporation or organization)
|
(I.R.S. Employer
Identification Number)
|
Large accelerated filer
|
[ ]
|
Accelerated filer
|
[ ]
|
|
|
|
|
Non-accelerated filer
|
[ ]
|
Smaller reporting company
|
[ X ]
|
|
|
ASSETS
|
|
June 26, 2016
|
|
December 27, 2015
|
||||
|
|
(unaudited)
|
|
|||||
Current assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
5,537,822
|
|
|
$
|
14,200,528
|
|
Accounts receivable
|
|
508,245
|
|
|
620,942
|
|
||
Inventory
|
|
1,872,057
|
|
|
1,934,584
|
|
||
Prepaid assets
|
|
1,307,165
|
|
|
1,618,429
|
|
||
Total current assets
|
|
9,225,289
|
|
|
18,374,483
|
|
||
|
|
|
|
|
||||
Deferred income taxes
|
|
14,630,653
|
|
|
13,320,177
|
|
||
Property and equipment, net
|
|
81,162,442
|
|
|
79,189,661
|
|
||
Intangible assets, net
|
|
3,388,585
|
|
|
3,638,716
|
|
||
Goodwill
|
|
50,097,081
|
|
|
50,097,081
|
|
||
Other long-term assets
|
|
1,141,900
|
|
|
1,152,377
|
|
||
Total assets
|
|
$
|
159,645,950
|
|
|
$
|
165,772,495
|
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
||||
Current liabilities
|
|
|
|
|
||||
Accounts payable
|
|
$
|
5,601,690
|
|
|
$
|
7,807,552
|
|
Accrued compensation
|
|
2,763,165
|
|
|
3,087,883
|
|
||
Other accrued liabilities
|
|
3,153,133
|
|
|
3,663,211
|
|
||
Current portion of long-term debt
|
|
9,843,746
|
|
|
9,891,825
|
|
||
Current portion of deferred rent
|
|
334,637
|
|
|
396,113
|
|
||
Total current liabilities
|
|
21,696,371
|
|
|
24,846,584
|
|
||
|
|
|
|
|
||||
Deferred rent, less current portion
|
|
3,036,979
|
|
|
2,826,210
|
|
||
Unfavorable operating leases
|
|
631,400
|
|
|
671,553
|
|
||
Other long-term liabilities
|
|
6,186,273
|
|
|
4,463,631
|
|
||
Long-term debt, less current portion
|
|
112,461,267
|
|
|
116,364,165
|
|
||
Total liabilities
|
|
144,012,290
|
|
|
149,172,143
|
|
||
|
|
|
|
|
||||
Commitments and contingencies (Notes 9 and 10)
|
|
|
|
|
||||
|
|
|
|
|
||||
Stockholders' equity
|
|
|
|
|
||||
Common stock - $0.0001 par value; 100,000,000 shares authorized; 26,619,811 and 26,298,725, respectively, issued and outstanding
|
|
2,586
|
|
|
2,584
|
|
||
Additional paid-in capital
|
|
36,335,496
|
|
|
36,136,332
|
|
||
Accumulated other comprehensive loss
|
|
(2,420,504
|
)
|
|
(1,006,667
|
)
|
||
Accumulated deficit
|
|
(18,283,918
|
)
|
|
(18,531,897
|
)
|
||
Total stockholders' equity
|
|
15,633,660
|
|
|
16,600,352
|
|
||
|
|
|
|
|
||||
Total liabilities and stockholders' equity
|
|
$
|
159,645,950
|
|
|
$
|
165,772,495
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 26, 2016
|
|
June 28, 2015
|
|
June 26, 2016
|
|
June 28, 2015
|
||||||||
Revenue
|
|
$
|
46,391,046
|
|
|
$
|
36,871,838
|
|
|
$
|
94,803,845
|
|
|
$
|
76,312,170
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
||||||||
Restaurant operating costs (exclusive of depreciation and amortization shown separately below):
|
|
|
|
|
|
|
|
|
||||||||
Food, beverage, and packaging costs
|
|
13,058,782
|
|
|
10,561,270
|
|
|
26,754,325
|
|
|
22,009,173
|
|
||||
Compensation costs
|
|
12,378,780
|
|
|
9,754,171
|
|
|
24,890,721
|
|
|
19,908,963
|
|
||||
Occupancy costs
|
|
3,051,165
|
|
|
2,432,350
|
|
|
6,221,920
|
|
|
4,804,817
|
|
||||
Other operating costs
|
|
9,684,253
|
|
|
7,811,480
|
|
|
19,723,097
|
|
|
15,772,029
|
|
||||
General and administrative expenses
|
|
2,814,979
|
|
|
5,674,963
|
|
|
5,477,737
|
|
|
8,171,850
|
|
||||
Pre-opening costs
|
|
649,119
|
|
|
576,390
|
|
|
921,483
|
|
|
1,669,890
|
|
||||
Depreciation and amortization
|
|
4,402,183
|
|
|
3,250,701
|
|
|
8,709,900
|
|
|
6,408,023
|
|
||||
Impairment and loss (gain) on asset disposal
|
|
(609,751
|
)
|
|
2,320,059
|
|
|
(543,623
|
)
|
|
2,468,467
|
|
||||
Total operating expenses
|
|
45,429,510
|
|
|
42,381,384
|
|
|
92,155,560
|
|
|
81,213,212
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Operating profit (loss)
|
|
961,536
|
|
|
(5,509,546
|
)
|
|
2,648,285
|
|
|
(4,901,042
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
|
(1,440,562
|
)
|
|
(559,035
|
)
|
|
(2,885,502
|
)
|
|
(991,258
|
)
|
||||
Other income, net
|
|
39,633
|
|
|
727,258
|
|
|
84,905
|
|
|
744,261
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Loss before income taxes
|
|
(439,393
|
)
|
|
(5,341,323
|
)
|
|
(152,312
|
)
|
|
(5,148,039
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income tax benefit
|
|
(256,967
|
)
|
|
(2,022,980
|
)
|
|
(400,291
|
)
|
|
(2,092,338
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
|
$
|
(182,426
|
)
|
|
$
|
(3,318,343
|
)
|
|
$
|
247,979
|
|
|
$
|
(3,055,701
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
|
|
$
|
(0.01
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.12
|
)
|
Fully diluted earnings per share
|
|
$
|
(0.01
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.12
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
26,379,065
|
|
|
26,151,853
|
|
|
26,338,549
|
|
|
26,150,518
|
|
||||
Diluted
|
|
26,379,065
|
|
|
26,151,853
|
|
|
26,338,549
|
|
|
26,150,518
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 26, 2016
|
|
June 28, 2015
|
|
June 26, 2016
|
|
June 28, 2015
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
|
$
|
(182,426
|
)
|
|
$
|
(3,318,343
|
)
|
|
$
|
247,979
|
|
|
$
|
(3,055,701
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
||||||||
Unrealized changes in fair value of interest rate swaps, net of tax of $188,044, $51,980, $728,340 and $109,713, respectively
|
|
(365,027
|
)
|
|
100,900
|
|
|
(1,413,837
|
)
|
|
(212,973
|
)
|
||||
Unrealized changes in fair value of investments, net of tax of $0, $0 $0 and $1,959, respectively
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,804
|
|
||||
Total other comprehensive income (loss)
|
|
(365,027
|
)
|
|
100,900
|
|
|
(1,413,837
|
)
|
|
(209,169
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Comprehensive loss
|
|
$
|
(547,453
|
)
|
|
$
|
(3,217,443
|
)
|
|
$
|
(1,165,858
|
)
|
|
$
|
(3,264,870
|
)
|
|
|
|
|
|
Additional
|
|
Accumulated
Other |
|
Retained
Earnings |
|
Total
|
|||||||||||
|
Common Stock
|
|
Paid-in
|
|
Comprehensive
|
|
(Accumulated
|
|
Stockholders'
|
|||||||||||||
|
Shares
|
|
Amount
|
|
Capital
|
|
Income (Loss)
|
|
Deficit)
|
|
Equity
|
|||||||||||
Balances - December 28, 2014
|
26,149,824
|
|
|
$
|
2,582
|
|
|
$
|
35,668,001
|
|
|
$
|
(175,156
|
)
|
|
$
|
(2,339,405
|
)
|
|
$
|
33,156,022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Issuance of restricted shares
|
47,502
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Forfeitures of restricted shares
|
(3,586
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Employee stock purchase plan
|
10,205
|
|
|
—
|
|
|
40,360
|
|
|
—
|
|
|
—
|
|
|
40,360
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
162,563
|
|
|
—
|
|
|
—
|
|
|
162,563
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Stock repurchase
|
(24,500
|
)
|
|
(2
|
)
|
|
(98,250
|
)
|
|
—
|
|
|
—
|
|
|
(98,252
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(209,169
|
)
|
|
—
|
|
|
(209,169
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,055,701
|
)
|
|
(3,055,701
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balances - June 28, 2015
|
26,179,445
|
|
|
$
|
2,580
|
|
|
$
|
35,772,674
|
|
|
$
|
(384,325
|
)
|
|
$
|
(5,395,106
|
)
|
|
$
|
29,995,823
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balances - December 27, 2015
|
26,298,725
|
|
|
$
|
2,584
|
|
|
$
|
36,136,332
|
|
|
$
|
(1,006,667
|
)
|
|
$
|
(18,531,897
|
)
|
|
$
|
16,600,352
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Issuance of restricted shares
|
335,831
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Forfeitures of restricted shares
|
(22,351
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Shares effectively repurchased for required employee withholding taxes
|
(5,940
|
)
|
|
—
|
|
|
(9,326
|
)
|
|
—
|
|
|
—
|
|
|
(9,326
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Employee stock purchase plan
|
13,546
|
|
|
2
|
|
|
20,780
|
|
|
—
|
|
|
—
|
|
|
20,782
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
187,710
|
|
|
—
|
|
|
—
|
|
|
187,710
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,413,837
|
)
|
|
—
|
|
|
(1,413,837
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
247,979
|
|
|
247,979
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balances - June 26, 2016
|
26,619,811
|
|
|
$
|
2,586
|
|
|
$
|
36,335,496
|
|
|
$
|
(2,420,504
|
)
|
|
$
|
(18,283,918
|
)
|
|
$
|
15,633,660
|
|
|
|
Six Months Ended
|
||||||
|
|
June 26, 2016
|
|
June 28, 2015
|
||||
Cash flows from operating activities
|
|
|
|
|
||||
Net income (loss)
|
|
$
|
247,979
|
|
|
$
|
(3,055,701
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities
|
|
|
|
|
||||
Depreciation and amortization
|
|
8,709,900
|
|
|
6,408,023
|
|
||
Amortization of debt discount and loan fees
|
|
117,238
|
|
|
14,214
|
|
||
Amortization of gain on sale-leaseback
|
|
(78,604
|
)
|
|
(78,604
|
)
|
||
Impairment and loss (gain) on asset disposals
|
|
(543,623
|
)
|
|
2,468,467
|
|
||
Share-based compensation, net
|
|
187,710
|
|
|
162,563
|
|
||
Deferred income taxes
|
|
(582,136
|
)
|
|
(1,929,924
|
)
|
||
Changes in operating assets and liabilities that provided (used) cash
|
|
|
|
|
||||
Accounts receivable
|
|
112,697
|
|
|
1,187,273
|
|
||
Inventory
|
|
62,527
|
|
|
(135,234
|
)
|
||
Prepaid assets
|
|
311,264
|
|
|
(369,353
|
)
|
||
Intangible assets
|
|
(394,483
|
)
|
|
(129,426
|
)
|
||
Other long-term assets
|
|
10,477
|
|
|
(778,071
|
)
|
||
Accounts payable
|
|
(1,201,271
|
)
|
|
(955,715
|
)
|
||
Accrued liabilities
|
|
(1,175,727
|
)
|
|
1,780,743
|
|
||
Deferred rent
|
|
149,293
|
|
|
17,169
|
|
||
Net cash provided by operating activities
|
|
5,933,241
|
|
|
4,606,424
|
|
||
|
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
|
||||
Proceeds from sale of investments
|
|
—
|
|
|
2,952,302
|
|
||
Proceeds from sale of property and equipment, net of fees
|
|
1,134,717
|
|
|
—
|
|
||
Purchases of property and equipment
|
|
(11,716,557
|
)
|
|
(12,646,471
|
)
|
||
Net cash used in investing activities
|
|
(10,581,840
|
)
|
|
(9,694,169
|
)
|
||
|
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
|
||||
Proceeds from issuance of long-term debt
|
|
7,109,154
|
|
|
7,551,319
|
|
||
Repayments of long-term debt
|
|
(11,134,717
|
)
|
|
(4,000,000
|
)
|
||
Repurchase of stock
|
|
—
|
|
|
(98,252
|
)
|
||
Proceeds from employee stock purchase plan
|
|
20,782
|
|
|
40,360
|
|
||
Tax withholdings for restricted stock units
|
|
(9,326
|
)
|
|
—
|
|
||
Net cash (used in) provided by financing activities
|
|
(4,014,107
|
)
|
|
3,493,427
|
|
||
|
|
|
|
|
||||
Net decrease in cash and cash equivalents
|
|
(8,662,706
|
)
|
|
(1,594,318
|
)
|
||
|
|
|
|
|
||||
Cash and cash equivalents, beginning of period
|
|
14,200,528
|
|
|
18,688,281
|
|
||
|
|
|
|
|
||||
Cash and cash equivalents, end of period
|
|
$
|
5,537,822
|
|
|
$
|
17,093,963
|
|
|
|
June 26, 2016
|
|
December 27, 2015
|
||||
Land
|
|
$
|
—
|
|
|
$
|
37,500
|
|
Building
|
|
3,932,646
|
|
|
2,339,219
|
|
||
Equipment
|
|
35,275,081
|
|
|
32,912,992
|
|
||
Furniture and fixtures
|
|
8,989,084
|
|
|
8,194,060
|
|
||
Leasehold improvements
|
|
77,382,253
|
|
|
72,148,545
|
|
||
Restaurant construction in progress
|
|
700
|
|
|
1,768,027
|
|
||
Total
|
|
125,579,764
|
|
|
117,400,343
|
|
||
Less accumulated depreciation
|
|
(44,417,322
|
)
|
|
(38,210,682
|
)
|
||
Property and equipment, net
|
|
$
|
81,162,442
|
|
|
$
|
79,189,661
|
|
|
|
June 26, 2016
|
|
December 27, 2015
|
||||
Amortized intangibles:
|
|
|
|
|
||||
Franchise fees
|
|
$
|
1,278,142
|
|
|
$
|
1,278,142
|
|
Trademark
|
|
70,576
|
|
|
66,826
|
|
||
Non-compete agreement
|
|
76,560
|
|
|
76,560
|
|
||
Favorable lease
|
|
351,344
|
|
|
351,344
|
|
||
Loan fees - Revolving line of credit and DLOC
|
|
368,084
|
|
|
368,084
|
|
||
Total
|
|
2,144,706
|
|
|
2,140,956
|
|
||
Less accumulated amortization
|
|
(640,537
|
)
|
|
(519,858
|
)
|
||
Amortized intangibles, net
|
|
1,504,169
|
|
|
1,621,098
|
|
||
|
|
|
|
|
||||
Unamortized intangibles:
|
|
|
|
|
||||
Liquor licenses
|
|
1,884,416
|
|
|
2,017,618
|
|
||
Total intangibles, net
|
|
$
|
3,388,585
|
|
|
$
|
3,638,716
|
|
|
June 26, 2016
|
|
December 27, 2015
|
||||
Sales tax payable
|
$
|
862,795
|
|
|
$
|
987,795
|
|
Accrued interest
|
446,946
|
|
|
495,365
|
|
||
Closure liability - current
|
417,599
|
|
|
1,008,707
|
|
||
Accrued property taxes
|
389,331
|
|
|
349,131
|
|
||
Other
|
1,036,462
|
|
|
822,213
|
|
||
Total other accrued liabilities
|
$
|
3,153,133
|
|
|
$
|
3,663,211
|
|
|
|
|
June 26, 2016
|
||||||||||||
|
|
|
Notional amounts
|
|
Derivative assets
|
|
Derivative liabilities
|
||||||||
Interest rate swaps
|
Rate
|
Expires
|
|
|
|
|
|
||||||||
April 2012
|
1.4%
|
April 2019
|
$
|
6,476,191
|
|
|
$
|
—
|
|
|
$
|
82,105
|
|
||
October 2012
|
0.9%
|
October 2017
|
2,785,714
|
|
|
—
|
|
|
11,958
|
|
|||||
July 2013
|
1.4%
|
April 2018
|
9,904,762
|
|
|
—
|
|
|
64,273
|
|
|||||
May 2014
|
1.5%
|
April 2018
|
10,357,143
|
|
|
—
|
|
|
158,834
|
|
|||||
January 2015
|
1.8%
|
December 2019
|
20,833,333
|
|
|
—
|
|
|
942,461
|
|
|||||
August 2015
|
2.3%
|
June 2020
|
49,696,875
|
|
|
—
|
|
|
2,407,801
|
|
|||||
Total
|
|
|
$
|
100,054,018
|
|
|
|
$
|
—
|
|
|
$
|
3,667,432
|
|
|
|
|
December 27, 2015
|
||||||||||||
|
|
|
Notional amounts
|
|
Derivative assets
|
|
Derivative liabilities
|
||||||||
Interest rate swaps
|
Rate
|
Expires
|
|
|
|
|
|||||||||
April 2012
|
1.4%
|
April 2019
|
$
|
7,619,048
|
|
|
$
|
—
|
|
|
$
|
56,280
|
|
||
October 2012
|
0.9%
|
October 2017
|
3,214,286
|
|
|
—
|
|
|
3,027
|
|
|||||
July 2013
|
1.4%
|
April 2018
|
8,190,476
|
|
|
—
|
|
|
60,164
|
|
|||||
May 2014
|
1.5%
|
April 2018
|
11,428,571
|
|
|
—
|
|
|
122,716
|
|
|||||
January 2015
|
1.8%
|
December 2019
|
20,547,619
|
|
|
|
—
|
|
|
|
415,459
|
|
|||
August 2015
|
2.3%
|
June 2020
|
49,696,875
|
|
|
—
|
|
|
867,609
|
|
|||||
Total
|
|
|
$
|
100,696,875
|
|
|
|
$
|
—
|
|
|
$
|
1,525,255
|
|
|
Number of
Restricted
Stock Shares
|
|
Unvested, December 27, 2015
|
241,124
|
|
Granted
|
335,831
|
|
Vested
|
(63,106
|
)
|
Vested shares tax portion
|
(5,940
|
)
|
Expired/Forfeited
|
(22,351
|
)
|
Unvested, June 26, 2016
|
485,558
|
|
|
Number of
Restricted
Stock Shares
|
|
Unvested, December 28, 2014
|
164,867
|
|
Granted
|
47,502
|
|
Vested
|
(22,751
|
)
|
Expired/Forfeited
|
(3,586
|
)
|
Unvested, June 28, 2015
|
186,032
|
|
Year
|
Amount
|
||
Remainder of 2016
|
$
|
5,509,766
|
|
2017
|
11,007,937
|
|
|
2018
|
10,535,524
|
|
|
2019
|
9,688,037
|
|
|
2020
|
9,423,851
|
|
|
2021 and thereafter
|
49,035,777
|
|
|
Total
|
$
|
95,200,892
|
|
|
|
Three months ended
|
||||||
|
|
June 26, 2016
|
|
June 28, 2015
|
||||
Loss available to common stockholders
|
|
$
|
(182,426
|
)
|
|
$
|
(3,318,343
|
)
|
|
|
|
|
|
||||
Weighted-average shares outstanding
|
|
26,379,065
|
|
|
26,151,853
|
|
||
Effect of dilutive securities
|
|
—
|
|
|
—
|
|
||
Weighted-average shares outstanding - assuming dilution
|
|
26,379,065
|
|
|
26,151,853
|
|
||
|
|
|
|
|
||||
Earnings per share
|
|
$
|
(0.01
|
)
|
|
$
|
(0.13
|
)
|
Earnings per share - assuming dilution
|
|
$
|
(0.01
|
)
|
|
$
|
(0.13
|
)
|
|
|
Six months ended
|
||||||
|
|
June 26, 2016
|
|
June 28, 2015
|
||||
Income (loss) available to common stockholders
|
|
$
|
247,979
|
|
|
$
|
(3,055,701
|
)
|
|
|
|
|
|
||||
Weighted-average shares outstanding
|
|
26,338,549
|
|
|
26,150,518
|
|
||
Effect of dilutive securities
|
|
—
|
|
|
—
|
|
||
Weighted-average shares outstanding - assuming dilution
|
|
26,338,549
|
|
|
26,150,518
|
|
||
|
|
|
|
|
||||
Earnings per share
|
|
$
|
0.01
|
|
|
$
|
(0.12
|
)
|
Earnings per share - assuming dilution
|
|
$
|
0.01
|
|
|
$
|
(0.12
|
)
|
●
|
Level 1
|
Quoted market prices in active markets for identical assets and liabilities;
|
|
|
|
●
|
Level 2
|
Inputs, other than level 1 inputs, either directly or indirectly observable; and
|
|
|
|
●
|
Level 3
|
Unobservable inputs developed using internal estimates and assumptions (there is little or no market data) which reflect those that market participants would use.
|
FAIR VALUE MEASUREMENTS
|
||||||||||||||||
Description
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Asset/(Liability)
Total
|
||||||||
Interest rate swaps
|
|
$
|
—
|
|
|
$
|
(3,667,432
|
)
|
|
$
|
—
|
|
|
$
|
(3,667,432
|
)
|
FAIR VALUE MEASUREMENTS
|
||||||||||||||||
Description
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Asset/(Liability)
Total
|
||||||||
Cash equivalents
|
|
$
|
2,000,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,000,000
|
|
Interest rate swaps
|
|
—
|
|
|
(1,525,255
|
)
|
|
—
|
|
|
(1,525,255
|
)
|
||||
Total
|
|
$
|
2,000,000
|
|
|
$
|
(1,525,255
|
)
|
|
$
|
—
|
|
|
$
|
474,745
|
|
|
|
Three Months Ended June 26, 2016
|
|
Three Months Ended June 28, 2015
|
||||||||||||||||||||
|
|
Interest Rate Swaps
|
|
Investments
|
|
Total
|
|
Interest Rate Swaps
|
|
Investments
|
|
Total
|
||||||||||||
Beginning balance
|
|
$
|
(2,055,477
|
)
|
|
$
|
—
|
|
|
$
|
(2,055,477
|
)
|
|
$
|
(485,225
|
)
|
|
$
|
—
|
|
|
$
|
(485,225
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gain (loss) recorded to other comprehensive income
|
|
(553,071
|
)
|
|
—
|
|
|
(553,071
|
)
|
|
152,880
|
|
|
—
|
|
|
152,880
|
|
||||||
Tax benefit (expense)
|
|
188,044
|
|
|
—
|
|
|
188,044
|
|
|
(51,980
|
)
|
|
—
|
|
|
(51,980
|
)
|
||||||
Other comprehensive income (loss)
|
|
(365,027
|
)
|
|
—
|
|
|
(365,027
|
)
|
|
100,900
|
|
|
—
|
|
|
100,900
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accumulated OCL
|
|
$
|
(2,420,504
|
)
|
|
$
|
—
|
|
|
$
|
(2,420,504
|
)
|
|
$
|
(384,325
|
)
|
|
$
|
—
|
|
|
$
|
(384,325
|
)
|
|
|
Six Months Ended June 26, 2016
|
|
Six Months Ended June 28, 2015
|
||||||||||||||||||||
|
|
Interest Rate Swaps
|
|
Investments
|
|
Total
|
|
Interest Rate Swaps
|
|
Investments
|
|
Total
|
||||||||||||
Beginning balance
|
|
$
|
(1,006,667
|
)
|
|
$
|
—
|
|
|
$
|
(1,006,667
|
)
|
|
$
|
(171,352
|
)
|
|
$
|
(3,804
|
)
|
|
$
|
(175,156
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gain (loss) recorded to other comprehensive income
|
|
(2,142,177
|
)
|
|
—
|
|
|
(2,142,177
|
)
|
|
(322,686
|
)
|
|
5,763
|
|
|
(316,923
|
)
|
||||||
Tax benefit (expense)
|
|
728,340
|
|
|
—
|
|
|
728,340
|
|
|
109,713
|
|
|
(1,959
|
)
|
|
107,754
|
|
||||||
Other comprehensive income (loss)
|
|
(1,413,837
|
)
|
|
—
|
|
|
(1,413,837
|
)
|
|
(212,973
|
)
|
|
3,804
|
|
|
(209,169
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accumulated OCL
|
|
$
|
(2,420,504
|
)
|
|
$
|
—
|
|
|
$
|
(2,420,504
|
)
|
|
$
|
(384,325
|
)
|
|
$
|
—
|
|
|
$
|
(384,325
|
)
|
|
|||||||||||||||
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 26, 2016
|
|
June 28, 2015
|
|
June 26, 2016
|
|
June 28, 2015
|
||||||||
Revenue from external customers:
|
|
|
|
|
|
|
|
||||||||
BWW
|
$
|
40,951,181
|
|
|
$
|
29,610,702
|
|
|
$
|
84,094,433
|
|
|
$
|
61,462,790
|
|
Bagger Dave's
|
5,439,865
|
|
|
7,261,136
|
|
|
10,709,412
|
|
|
14,849,380
|
|
||||
Total
|
$
|
46,391,046
|
|
|
$
|
36,871,838
|
|
|
$
|
94,803,845
|
|
|
$
|
76,312,170
|
|
|
|
|
|
|
|
|
|
||||||||
Segment operating profit (loss):
|
|
|
|
|
|
|
|
||||||||
BWW
|
$
|
3,849,895
|
|
|
$
|
3,751,902
|
|
|
$
|
9,135,540
|
|
|
$
|
8,358,232
|
|
Bagger Dave's
|
(889,880
|
)
|
|
(2,810,306
|
)
|
|
(1,502,142
|
)
|
|
(4,268,941
|
)
|
||||
Total segment operating profit
|
$
|
2,960,015
|
|
|
$
|
941,596
|
|
|
$
|
7,633,398
|
|
|
$
|
4,089,291
|
|
Closure-related items
|
928,153
|
|
|
—
|
|
|
583,142
|
|
|
—
|
|
||||
Corporate expenses
|
(2,926,632
|
)
|
|
(6,451,142
|
)
|
|
(5,568,255
|
)
|
|
(8,990,333
|
)
|
||||
Total consolidated operating profit (loss)
|
$
|
961,536
|
|
|
$
|
(5,509,546
|
)
|
|
$
|
2,648,285
|
|
|
$
|
(4,901,042
|
)
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
$
|
(1,440,562
|
)
|
|
$
|
(559,035
|
)
|
|
$
|
(2,885,502
|
)
|
|
$
|
(991,258
|
)
|
Other income
|
39,633
|
|
|
727,258
|
|
|
84,905
|
|
|
744,261
|
|
||||
Net loss before income taxes
|
$
|
(439,393
|
)
|
|
$
|
(5,341,323
|
)
|
|
$
|
(152,312
|
)
|
|
$
|
(5,148,039
|
)
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
June 26, 2016
|
|
December 27, 2015
|
||||||||
Total assets
|
|
|
|
|
|
|
|
||||||||
BWW
|
|
|
|
|
$
|
116,669,017
|
|
|
$
|
115,044,166
|
|
||||
Bagger Dave's
|
|
|
|
|
21,588,976
|
|
|
21,886,470
|
|
||||||
Corporate
|
|
|
|
|
21,387,957
|
|
|
28,841,859
|
|
||||||
Total assets
|
|
|
|
|
$
|
159,645,950
|
|
|
$
|
165,772,495
|
|
|
|
2016 (estimate)
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|||||
Summary of restaurants open at the beginning of year
|
|
|
|
|
|
|
|
|
|
|
|||||
DRH-owned BWW
|
|
62
|
|
|
42
|
|
|
36
|
|
|
33
|
|
|
22
|
|
Bagger Dave’s
|
|
18
|
|
|
24
|
|
|
18
|
|
|
11
|
|
|
6
|
|
Total
|
|
80
|
|
|
66
|
|
|
54
|
|
|
44
|
|
|
28
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Openings:
|
|
|
|
|
|
|
|
|
|
|
|||||
DRH-owned BWW
|
|
2
|
|
|
3
|
|
|
3
|
|
|
3
|
|
|
3
|
|
Bagger Dave’s
|
|
1
|
|
|
5
|
|
|
6
|
|
|
7
|
|
|
5
|
|
BWW Acquisitions
|
|
—
|
|
|
18
|
|
|
3
|
|
|
—
|
|
|
8
|
|
Closures - DRH-owned BWW
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
Closures - Bagger Dave's
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
Total restaurants
|
|
83
|
|
|
80
|
|
|
66
|
|
|
54
|
|
|
44
|
|
|
|
Three Months Ended
|
||||||||||||
|
|
June 26, 2016
|
|
Percent of sales
|
|
June 28, 2015
|
|
Percent of sales
|
||||||
BWW
|
|
$
|
40,951,181
|
|
|
88.3
|
%
|
|
$
|
29,610,702
|
|
|
80.3
|
%
|
Bagger Dave's
|
|
5,439,865
|
|
|
11.7
|
%
|
|
7,261,136
|
|
|
19.7
|
%
|
||
Total revenue
|
|
46,391,046
|
|
|
100.0
|
%
|
|
36,871,838
|
|
|
100.0
|
%
|
||
|
|
|
|
|
|
|
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||
Food, beverage, and packaging costs
|
|
|
|
|
|
|
|
|
||||||
BWW
|
|
11,419,464
|
|
|
27.9
|
%
|
|
8,324,900
|
|
|
28.1
|
%
|
||
Bagger Dave's
|
|
1,639,318
|
|
|
30.1
|
%
|
|
2,236,370
|
|
|
30.8
|
%
|
||
Food, beverage, and packaging costs
|
|
13,058,782
|
|
|
28.1
|
%
|
|
10,561,270
|
|
|
28.6
|
%
|
||
|
|
|
|
|
|
|
|
|
||||||
Compensation costs
|
|
|
|
|
|
|
|
|
||||||
BWW
|
|
10,283,942
|
|
|
25.1
|
%
|
|
7,064,960
|
|
|
23.9
|
%
|
||
Bagger Dave's
|
|
2,094,838
|
|
|
38.5
|
%
|
|
2,689,211
|
|
|
37.0
|
%
|
||
Compensation costs
|
|
12,378,780
|
|
|
26.7
|
%
|
|
9,754,171
|
|
|
26.5
|
%
|
||
|
|
|
|
|
|
|
|
|
||||||
Occupancy costs
|
|
|
|
|
|
|
|
|
||||||
BWW
|
|
2,774,108
|
|
|
6.8
|
%
|
|
1,728,997
|
|
|
5.8
|
%
|
||
Bagger Dave's
|
|
277,057
|
|
|
5.1
|
%
|
|
703,353
|
|
|
9.7
|
%
|
||
Occupancy costs
|
|
3,051,165
|
|
|
6.6
|
%
|
|
2,432,350
|
|
|
6.6
|
%
|
||
|
|
|
|
|
|
|
|
|
||||||
Other operating costs
|
|
|
|
|
|
|
|
|
||||||
BWW
|
|
8,397,035
|
|
|
20.5
|
%
|
|
6,241,037
|
|
|
21.1
|
%
|
||
Bagger Dave's
|
|
1,326,490
|
|
|
24.4
|
%
|
|
1,570,443
|
|
|
21.6
|
%
|
||
Closure-related items
|
|
(39,272
|
)
|
|
(0.1
|
)%
|
|
—
|
|
|
—
|
%
|
||
Other operating costs
|
|
9,684,253
|
|
|
20.9
|
%
|
|
7,811,480
|
|
|
21.2
|
%
|
||
|
|
|
|
|
|
|
|
|
||||||
General and administrative expenses
|
|
2,814,979
|
|
|
6.1
|
%
|
|
5,674,963
|
|
|
15.4
|
%
|
||
Pre-opening costs
|
|
649,119
|
|
|
1.4
|
%
|
|
576,390
|
|
|
1.6
|
%
|
||
Depreciation and amortization
|
|
4,402,183
|
|
|
9.5
|
%
|
|
3,250,701
|
|
|
8.8
|
%
|
||
Impairment and loss (gain) on asset disposal
|
|
(609,751
|
)
|
|
(1.3
|
)%
|
|
2,320,059
|
|
|
6.3
|
%
|
||
|
|
|
|
|
|
|
|
|
||||||
Total operating expenses
|
|
45,429,510
|
|
|
97.9
|
%
|
|
42,381,384
|
|
|
114.9
|
%
|
||
|
|
|
|
|
|
|
|
|
||||||
Operating profit
|
|
$
|
961,536
|
|
|
2.1
|
%
|
|
$
|
(5,509,546
|
)
|
|
(14.9
|
)%
|
|
|
Six Months Ended
|
||||||||||||
|
|
June 26, 2016
|
|
Percent of sales
|
|
June 28, 2015
|
|
Percent of sales
|
||||||
BWW
|
|
$
|
84,094,433
|
|
|
88.7
|
%
|
|
$
|
61,462,790
|
|
|
80.5
|
%
|
Bagger Dave's
|
|
10,709,412
|
|
|
11.3
|
%
|
|
14,849,380
|
|
|
19.5
|
%
|
||
Total revenue
|
|
94,803,845
|
|
|
100.0
|
%
|
|
76,312,170
|
|
|
100.0
|
%
|
||
|
|
|
|
|
|
|
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||
Food, beverage, and packaging costs
|
|
|
|
|
|
|
|
|
||||||
BWW
|
|
23,480,217
|
|
|
27.9
|
%
|
|
17,508,564
|
|
|
28.5
|
%
|
||
Bagger Dave's
|
|
3,274,108
|
|
|
30.6
|
%
|
|
4,500,609
|
|
|
30.3
|
%
|
||
Food, beverage, and packaging costs
|
|
26,754,325
|
|
|
28.2
|
%
|
|
22,009,173
|
|
|
28.8
|
%
|
||
|
|
|
|
|
|
|
|
|
||||||
Compensation costs
|
|
|
|
|
|
|
|
|
||||||
BWW
|
|
20,796,263
|
|
|
24.7
|
%
|
|
14,498,208
|
|
|
23.6
|
%
|
||
Bagger Dave's
|
|
4,094,458
|
|
|
38.2
|
%
|
|
5,410,755
|
|
|
36.4
|
%
|
||
Compensation costs
|
|
24,890,721
|
|
|
26.3
|
%
|
|
19,908,963
|
|
|
26.1
|
%
|
||
|
|
|
|
|
|
|
|
|
||||||
Occupancy costs
|
|
|
|
|
|
|
|
|
||||||
BWW
|
|
5,540,567
|
|
|
6.6
|
%
|
|
3,460,345
|
|
|
5.6
|
%
|
||
Bagger Dave's
|
|
681,353
|
|
|
6.4
|
%
|
|
1,344,572
|
|
|
9.1
|
%
|
||
Occupancy costs
|
|
6,221,920
|
|
|
6.6
|
%
|
|
4,804,917
|
|
|
6.3
|
%
|
||
|
|
|
|
|
|
|
|
|
||||||
Other operating costs
|
|
|
|
|
|
|
|
|
||||||
BWW
|
|
16,788,991
|
|
|
20.0
|
%
|
|
12,660,074
|
|
|
20.6
|
%
|
||
Bagger Dave's
|
|
2,178,454
|
|
|
20.3
|
%
|
|
3,111,955
|
|
|
21.0
|
%
|
||
Closure-related items
|
|
755,652
|
|
|
0.8
|
%
|
|
—
|
|
|
—
|
%
|
||
Other operating costs
|
|
19,723,097
|
|
|
20.8
|
%
|
|
15,772,029
|
|
|
20.7
|
%
|
||
|
|
|
|
|
|
|
|
|
||||||
General and administrative expenses
|
|
5,477,737
|
|
|
5.8
|
%
|
|
8,171,850
|
|
|
10.7
|
%
|
||
Pre-opening costs
|
|
921,483
|
|
|
1.0
|
%
|
|
1,669,890
|
|
|
2.2
|
%
|
||
Depreciation and amortization
|
|
8,709,900
|
|
|
9.2
|
%
|
|
6,408,023
|
|
|
8.4
|
%
|
||
Impairment and loss (gain) on asset disposal
|
|
(543,623
|
)
|
|
(0.6
|
)%
|
|
2,468,467
|
|
|
3.2
|
%
|
||
|
|
|
|
|
|
|
|
|
||||||
Total operating expenses
|
|
92,155,560
|
|
|
97.2
|
%
|
|
81,213,312
|
|
|
106.4
|
%
|
||
|
|
|
|
|
|
|
|
|
||||||
Operating profit
|
|
$
|
2,648,285
|
|
|
2.8
|
%
|
|
$
|
(4,901,142
|
)
|
|
(6.4
|
)%
|
|
|
DIVERSIFIED RESTAURANT HOLDINGS, INC.
|
|
|
|
|
|
|
|
|
|
Dated:
|
August 5, 2016
|
By:
|
/s/ T. Michael Ansley
|
|
|
T. Michael Ansley
|
|
|
|
President and Chief Executive
|
|
|
|
Officer (Principal Executive Officer)
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ David G. Burke
|
|
|
David G. Burke
|
|
|
|
Chief Financial Officer and Treasurer
|
|
|
|
(Principal Financial and Accounting Officer)
|
Exhibit No.
|
Exhibit Description
|
|
|
3.1
|
Certificate of Incorporation (filed as an exhibit to the Company's Registration Statement on Form S-1, as filed with the Securities and Exchange Commission on August 10, 2007, and incorporated herein by this reference).
|
|
|
3.2
|
Amended and Restated Bylaws (filed as an exhibit to the Company's Form 8-K, as filed with the Securities and Exchange Commission on August 29, 2012, and incorporated herein by this reference).
|
|
|
3.3
|
First Amendment to the Amended and Restated Bylaws (filed as an exhibit to the Company's Form 8-K, as filed with the Securities and Exchange Commission on October 31, 2012, and incorporated herein by this reference).
|
|
|
3.4
|
Second Amendment to the Amended and Restated Bylaws (filed as an exhibit to the Company's Form 8-K, as filed with the Securities and Exchange Commission on July 29, 2016, and incorporated herein by this reference).
|
|
|
10.1
|
Employment Agreement between Diversified Restaurant Holdings, Inc. and David G. Burke, dated May 19, 2016 (filed as exhibit 10.1 to the Company's Form 8-K, as filed with the Securities and Exchange Commission on May 24, 2016, and incorporated herein by this reference).
|
|
|
31.1
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a).
|
|
|
31.2
|
Certification Chief Financial Officer pursuant to Rule 13a-14(a).
|
|
|
32.1
|
Certification Chief Executive Officer pursuant to 18 U.S.C. Section 1350.
|
|
|
32.2
|
Certification Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
|
|
|
101.INS
|
XBRL Instance Document
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Document
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Document
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Document
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Document
|
1 Year Diversified Restaurant Chart |
1 Month Diversified Restaurant Chart |
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