Diversified Restaurant Holdings (SAUC) Misses Q2 EPS by 3c

Diversified Restaurant Holdings (NASDAQ: SAUC) reported Q2 EPS of ($0.04), $0.03 worse than the analyst estimate of ($0.01). Revenue for the quarter came in at $37 million versus the consensus estimate of $37 million.

• Revenue totaled $37.0 million
• Same-store sales declined 6.4%
• Net loss was $1.1 million or $0.04 per diluted share
• Restaurant-level EBITDA(1) was $5.5 million, or 15.0% of sales
• Adjusted EBITDA(1) was $3.7 million
• Total debt of $108.2 million was down $5.8 million for the year-to-date period

“Our second quarter results reflect the ongoing headwinds that the Buffalo Wild Wings system is facing in the short-term while our franchisor, under new ownership, works to realign media and promotional strategies and reinvigorate the brand,” commented David G. Burke, President and CEO. “Despite the current challenges, we remain optimistic about a turnaround in sales trends as a result of the improved corporate marketing strategy planned for the upcoming football season along with the many other positive developments that are being tested and implemented, from advertising to information technology to menu innovation. We also expect to realize cost benefits as we participate in the leverage from our franchisor’s larger scale and buying power. We expect that the impact from these efforts will begin to be realized in our results later in the year as changes are implemented and gain traction.”

Mr. Burke added, “Given the current operating environment and our anticipated cash outlays for debt repayment and capital improvements, we felt it was prudent to complete an equity offering. The approximately $4.7 million in net proceeds that was recently raised provides confidence that our current cash balance, in addition to our cash flow from operations, will be sufficient to fund our operations, meet our commitments on our existing debt and ensure ongoing debt covenant compliance.”

For earnings history and earnings-related data on Diversified Restaurant Holdings (SAUC) click here.

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