UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): December 27, 2015

 
DIVERSIFIED RESTAURANT HOLDINGS, INC.
 
(Name of registrant in its charter)

	

Nevada	 	000-53577	 	03-0606420	
(State or other jurisdiction of
 incorporation)	 	(Commission File Number)	 	(IRS Employer Identification No.)	
 	 	27680 Franklin Road
Southfield, MI  48034	 	 	
(Address of principal executive offices)	

Registrant's telephone number:   (248) 223-9160

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[   ]    Written communications pursuant to Rule 425 under the Securities Act
 
[   ]    Soliciting material pursuant to Rule 14a-12 under the Exchange Act
 
[   ]    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
 
[   ]    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

 

 

Item 2.05 Costs Associated with Exit or Disposal Activities.

Diversified Restaurant Holdings, Inc. (Nasdaq: SAUC) ("DRH" or the "Company"), the largest franchisee for Buffalo Wild Wings® ("BWW") and creator and operator of Bagger Dave's Burger ® ("Bagger Dave's"), today announced that it closed
eight underperforming Bagger Dave’s restaurants on December 27, 2015.

We estimate the restaurant closures will result in an impairment loss between $7.5 million – $9.0 million, a severance liability between $0.2 million – $0.3 million and a liability between $0.9 million – $1.0 million for the net present value of any remaining lease obligations, net of estimated sublease income. These costs will be incurred and booked in the fourth quarter of fiscal year 2015. We also estimate moving, storage and other miscellaneous costs between $0.3 million - $0.4 million.

The Bagger Dave’s restaurant closures include eight locations opened between fiscal year 2012 and early fiscal year 2015. Of these, seven were located in Indiana and one was located in Detroit, Michigan. Through the first nine months ended September 27, 2015, these eight restaurants generated $5.5 million in revenue and $(0.6) million in EBITDA. On a pro-forma basis, the remaining 18 Bagger Dave’s restaurants generated $14.1 million in revenue and $0.7 million in EBITDA.

On December 28, 2015, we issued a press release relating to the restaurant closings. A copy of the press release is filed as Exhibit 99.1 to this report and incorporated here by reference.

Item 9.01 Financial Statement and Exhibits
(d) Exhibits

Exhibit No.     Description

99.1	Press Release of Diversified Restaurant Holdings, Inc. dated December 28, 2015	
 
SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	
				
 	DIVERSIFIED RESTAURANT
HOLDINGS, INC.	 	
 	 	 	 	
Dated:  December 28, 2015	By:	 /s/ David G. Burke	 	
 	Name:	David G. Burke	 	
 	Title:	Chief Financial Officer (Principal   
Financial and Accounting Officer)	 	

 

2

EXHIBIT INDEX

Exhibit No.     Description

99.1	Press Release of Diversified Restaurant Holdings, Inc. dated December 28, 2015	

3

Press Release

Diversified Restaurant Holdings, Inc. Closes Eight Bagger Dave’s to Improve Overall Profitability

Will Present at the 18th Annual ICR Conference on January 13, 2016

SOUTHFIELD, Mich. December 28, 2015 - Diversified Restaurant Holdings, Inc. (Nasdaq: SAUC) ("DRH" or the "Company"), the largest franchisee for Buffalo Wild Wings® ("BWW") and creator and operator of Bagger Dave's Burger ® ("Bagger Dave's"), today announced that it has closed
8 underperforming Bagger Dave’s restaurants.

The restaurant closures will result in approximately $9.0 million - $10.0 million in non-cash impairment charges and lease obligations and approximately $0.2 million - $0.3 million in cash severance charges that will be incurred during the fourth quarter of fiscal year 2015.

“DRH is committed to taking all appropriate and necessary actions to enhance value for all shareholders,” said Michael Ansley, Chairman, President and CEO. “We have therefore chosen to optimize our portfolio and improve overall profitability by closing 8 underperforming Bagger Dave Restaurants. This will allow us to focus our attention on more profitable restaurants. Currently, five Bagger Dave’s are operating under the new and improved prototype and we are very encouraged with the initial performance. As we gain experience with the brand, we have confidence that we have made the necessary improvements to drive future success of the concept.”

Bagger Dave’s restaurant closures include eight locations opened between fiscal year 2012 and early fiscal year 2015. These restaurants were all closed on December 27, 2015. Of these, six were located in Indiana and one was located in Detroit, Michigan. Through the first nine months ended September 27, 2015, these eight restaurants generated $5.5 million in revenue and $(0.6) million in EBITDA. On a pro-forma basis, the remaining 18 Bagger Dave’s restaurants generated $14.1 million in revenue and $0.7 million in EBITDA.

ICR Conference Presentation

DRH will be presenting at the 18 th Annual ICR Conference on Wednesday, January 13, 2016 at 12:30 PM Eastern Time. The live and archived webcast also can be accessed through the Company's website, www.diversifiedrestaurantholdings.com

About Diversified Restaurant Holdings

Diversified Restaurant Holdings, Inc. (Nasdaq: SAUC) ("DRH" or the "Company") operates 62 Buffalo Wild Wings Grill & Bar ("BWW") franchised restaurants in key markets in Indiana, Illinois, Michigan, Missouri and Florida. DRH was named the 2014 Franchisee of the Year and Operator of the Year by Buffalo Wild Wings Inc.

The Company also owns and operates 18 Bagger Dave's Burger Tavern restaurants in Michigan and Ohio. For more information, visit www.baggerdaves.com .

The Company routinely posts news and other important information on its website at www.diversifiedrestaurantholdings.com .

CONTACT: For more information contact:
Investor Relations Contact:
Raphael Gross
ICR Inc.
203.682.8253
raphael.gross@icrinc.com