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Del Frisco's Restaurant Group, Inc. Announces Second Quarter 2012 Results

The conference call can be accessed live over the phone by dialing 877-795-3610 or for international callers by dialing 719-325-4776. A replay will be available after the call and can be accessed by dialing 877-870-5176 or for international callers by dialing 858-384-5517; the passcode is 4202106. The replay will be available until Tuesday, August 28, 2012. 

The conference call will also be webcast live from the Company's website at under the investor relations section. An archive of the webcast will also be available through the Company's website shortly after the call has concluded.

About Del Frisco's Restaurant Group, Inc.

Based in Southlake, TX, Del Frisco's Restaurant Group owns and operates three contemporary, high-end, complementary restaurant concepts: Del Frisco's Double Eagle Steak House, Sullivan's Steakhouse, and Del Frisco's Grille. The Company currently operates 32 restaurants across 18 states. Each of its three concepts offers steaks and other menu selections, such as chops and fresh seafood, complemented by an extensive wine selection.

For further information about our restaurants, to make reservations, or to purchase gift cards, please visit: , , and . For more information about Del Frisco's Restaurant Group, Inc., please visit .

Forward-Looking Statements

Certain statements in this press release, including statements under the heading "Outlook" are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. We use words such as "anticipate", "believe", "could", "should", "estimate", "expect", "intend", "may", "predict", "project", "target", and similar terms and phrases, including references to assumptions, to identify forward-looking statements. The forward-looking statements in this press release are based on information available to us as of the date any such statements are made and we assume no obligation to update these forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the statements. These risks and uncertainties include, but are not limited to, the following: factors that could affect our ability to achieve and manage our planned expansion, such as the availability of a sufficient number of suitable new restaurant sites and the availability of qualified employees; the uncertainty of our ability to achieve expected levels of comparable restaurant sales increases; the performance of new restaurants and their impact on existing restaurant sales; increases in the cost of food ingredients and other key supplies; the risk of food-borne illnesses and other health concerns about our food; the potential for increased labor costs or difficulty retaining qualified employees, including as a result of immigration enforcement activities; risks relating to our expansion into new markets; the impact of federal, state or local government regulations relating to our employees and the sale of food or alcoholic beverages. Additional factors that could cause actual results to differ materially from our forward-looking statements are set forth in our reports filed with the Securities and Exchange Commission.

Condensed Consolidated Income Statements - Unaudited
(amounts in thousands, except per share data)
  12 Weeks Ending 24 Weeks Ending
  June 12, June 14, June 12, June 14,
  2012 2011 2012 2011
Revenues  $ 51,324  $ 43,489  $ 105,002  $ 86,841
Costs and expenses:        
Costs of sales 15,771 13,326 32,350 26,771
Restaurant operating expenses 21,810 19,358 44,470 38,259
Marketing and advertising costs 1,189 967 2,063 1,694
Pre-opening costs 832 952 902 1,306
General and administrative costs 2,754 2,871 5,379 5,061
Management and accounting fees paid to related party 452 1,185 1,196 1,654
Depreciation and amortization 1,993 1,571 3,707 3,096
Operating income 6,523 3,259 14,935 9,000
Other income (expense), net:        
Interest expense (1,008) (1,693) (2,228) (3,457)
Other  68 (88) 65 (86)
Income from continuing operations before income taxes 5,583 1,478 12,772 5,457
Income tax expense 1,957 443 4,137 1,680
Net income  $ 3,626  $ 1,035  $ 8,635  $ 3,777
Net income per share - Basic and dilulted  $ 0.20  $ 0.06  $ 0.48  $ 0.21
Weighted average shares outstanding - Basic and diluted  17,995  17,995  17,995  17,995
Selected Balance Sheet Data
(dollar amounts in thousands)
  June 12, December 27,
  2012 2011
Cash and cash equivalents  $ 5,765  $ 14,119
Total assets  236,836  234,274
Long-term debt 61,500 70,000
Total stockholder's equity  104,507 95,872

Segment Information and Reconciliation of Non-GAAP Measurement

We prepare our financial statements in accordance with generally accepted accounting principles (GAAP). Within our press release, we make reference to non-GAAP Restaurant-level EBITDA. This non-GAAP measurement is calculated by adding back to operating income depreciation and amortization plus the sum of certain non-operating expenses, including pre-opening costs, management fees and expenses, and general and administrative expenses. We believe that this measure represents a useful internal measure of performance. Accordingly, we include this non-GAAP measure so that investors have the same financial data that management uses in evaluating performance, and we believe that it will assist the investment community in assessing our underlying performance on a quarter-over-quarter basis. However, because this measure is not determined in accordance with GAAP, such a measure is susceptible to varying calculations and not all companies calculate the measure in the same manner. As a result, this measure as presented may not be directly comparable to a similarly titled measure presented by other companies. This non-GAAP measure is presented as supplemental information and not as alternatives to any GAAP measurements. The following tables include a reconciliation of restaurant-level EBITDA to operating income:

  12 Weeks Ending June 12, 2012 (unaudited)
  Del Frisco's Sullivan's Other Consolidated
Revenues  $ 27,777 100.0%  $ 19,287 100.0%  $ 4,260 100.0%  $ 51,324 100.0%
Costs and expenses:                
Cost of sales  8,774 31.6%  5,869 30.4%  1,128 26.5%  15,771 30.7%
Restaurant operating expenses  10,559 38.0%  9,315 48.3%  1,936 45.4%  21,810 42.5%
Marketing and advertising costs  503 1.8%  637 3.3%  49 1.2%  1,189 2.3%
Restaurant-level EBITDA  7,941 28.6%  3,466 18.0%  1,147 26.9%  12,554 24.5%
Pre-opening costs              832 1.6%
General and administrative              2,754 5.4%
Management and accounting fees paid to related party              452 0.9%
Depreciation and amortization              1,993 3.9%
Operating Income              $ 6,523 12.7%
Restaurant operating weeks  108    240    25    373  
Average unit volume  $ 3,086    $ 964    $ 2,045    $ 1,651  
  12 Weeks Ending June 14, 2011 (unaudited)
  Del Frisco's Sullivan's Other Consolidated
Revenues  $ 24,221 100.0%  $ 19,268 100.0%  $ --  0.0%  $ 43,489 100.0%
Costs and expenses:                
Cost of sales  7,392 30.5%  5,934 30.8%  --  0.0%  13,326 30.6%
Restaurant operating expenses  9,868 40.7%  9,490 49.3%  --  0.0%  19,358 44.5%
Marketing and advertising costs  402 1.7%  565 2.9%  --  0.0%  967 2.2%
Restaurant-level EBITDA  6,559 27.1%  3,279 17.0%  --  0.0%  9,838 22.6%
Pre-opening costs              952 2.2%
General and administrative              2,871 6.6%
Management and accounting fees paid to related party              1,185 2.7%
Depreciation and amortization              1,571 3.6%
Operating Income              $ 3,259 7.5%
Restaurant operating weeks  104    240    --     344  
Average unit volume  $ 2,795    $ 963    $ --     $ 1,517  
CONTACT: Investor Relations Contact:
         Raphael Gross
         Media Relations Contact:
         Liz Brady

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