Diversified Restaurant Holdings, Inc. (SAUC) 10-K Annual Report April 2019

SOUTHFIELD, MI, March 7, 2019 -- Diversified Restaurant Holdings, Inc. (Nasdaq: SAUC) ("DRH" or the "Company"), one of the largest franchisees for Buffalo Wild Wings^® ("BWW") with 64 stores across five states, today announced results for its fourth quarter and fiscal year ended December 30, 2018.

Fourth Quarter and Full Year Key Information (from continuing operations)


•	Revenue for the quarter totaled $39.1 million and was $153.1 million for the year


•	Achieved same-store sales growth of 2.2% in the fourth quarter; first positive quarter since 2015


•	Operating loss of $1.5 million in the quarter, which included a $2.8 million asset impairment charge; operating loss was $0.4 million for the year


•	Net loss was $2.3 million in the quarter and $5.0 million for the year


•	Restaurant-level EBITDA⁽¹⁾ margin was 14.3% for the quarter and 15.2% for the year


•	Adjusted EBITDA⁽¹⁾ was $3.8 million for the quarter and $15.8 million for the year


•	Total debt was down $11.6 million to $102.4 million at year-end

(1)See attached table for a reconciliation of GAAP net loss to Restaurant-level EBITDA and Adjusted EBITDA

“We continue to be energized and excited by the changes that are being implemented by our franchisor and are starting to reap the early benefits of the new marketing, media and promotional initiatives,” commented David G. Burke, President and CEO. “We achieved our first positive quarterly same-store sales result in three years and we believe there is a lot of room to continue to build on this momentum as these changes gain traction and future initiatives continue to roll out. We are especially encouraged with the early read into 2019. Same-store sales through early March continue to trend positive, despite severe weather across most of our regions, with the excitement of March madness in front of us.

“To capitalize on the NCAA tournament and to complement our focus to be The Great American Sports Bar, there will be a strong traffic-driving media strategy alongside a new menu design, new and improved food offerings and enhanced food presentation. Equally important are the number of initiatives taking place behind the scenes, as we implement new training and engagement tools to drive better team member retention

The following information was filed by Diversified Restaurant Holdings, Inc. (SAUC) on Friday, March 8, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Diversified Restaurant Holdings, Inc.'s 10-K Annual Report:

Financial - Expense Highlight
Restaurant operating costs (exclusive of depreciation and amortization shown separately below): Food, beverage, and packaging 28.6 % 29.5 % Compensation costs 26.8 % 25.2 % Occupancy 7.6 % 7.1 % Other operating costs 21.8 % 21.2 % General and administrative expenses 5.4 % 5.5 % Pre-opening costs - % 0.2 % Depreciation and amortization 7.5 % 7.9 % Impairment and loss on asset disposals 2.5 % 0.2 % Interest expense (4.2 )% (4.0 )% Other income, net 0.1 % 0.1 % Loss from continuing operations before income taxes (4.3 )% (0.7 )% Income tax benefit (expense) of continuing operations 1.1 % (11.5 )% Discontinued operations Loss from discontinued operations before income taxes - % (0.1 )% Income tax benefit of discontinued operations - % - % Total revenue for fiscal year 2018 was $153.1 million, a decrease of $12.3 million, or 7.4%, over revenue generated during fiscal year 2017.

M & A - Other Highlight
Our strategy is comprised of the following key growth components: pursue disciplined restaurant growth through a combination of both organic expansion and strategic acquisitions; deliver comparable restaurant sales growth by providing our guest with an exceptional experience and executing effective marketing and promotional strategies; and leverage our infrastructure and operating expertise to grow profit margins.
Financial - Expense Highlight
Substantial increases in costs and expenses could impact our operating results to the extent that such increases cannot be passed along to our restaurant guests.
Other - Other Highlight
We evaluate the recoverability of a restaurants long-lived assets, including intangibles, leasehold improvements, furniture, fixtures and equipment over the remaining life of the primary asset in the asset group, after considering the potential impact of planned operational improvements, marketing programs, and anticipated changes in the trade area.
Financial - Expense Highlight
Restaurant pre-opening costs consist of expenses incurred prior to opening a new restaurant, including manager salaries, relocation costs, supplies, recruiting expenses, initial new market public relations costs, pre-opening activities, team member payroll and related training costs for new team members.
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Financial Statements, Disclosures and Schedules

Inside this 10-K Annual Report

Material Contracts, Statements, Certifications & more

Diversified Restaurant Holdings, Inc. provided additional information to their SEC Filing as exhibits

Exhibit 10.18: Material Contract

Exhibit 21: Subsidaries Of The Registrant

Exhibit 23: Consents Of Experts And Counsel

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.1: Section 1350 Certification

Exhibit 32.2: Section 1350 Certification

Ticker: SAUC
CIK: 1394156
Form Type: 10-K Annual Report
Accession Number: 0001394156-19-000020
Submitted to the SEC: Wed Apr 03 2019 5:45:00 PM EST
Accepted by the SEC: Thu Apr 04 2019
Period: Sunday, December 30, 2018
Industry: Retail Eating Places

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Diversified Restaurant Holdings, Inc. (SAUC) SEC Filing 10-K Annual report for the fiscal year ending Sunday, December 30, 2018

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