Restaurant-level EBITDA** decreased 5.7% to $2.5 million in the third quarter of 2012 from $2.7 million in the third quarter of 2011, as the concept experienced higher cost of sales, restaurant operating expenses, and marketing and advertising costs as a percentage of revenues.
The Sullivan's in Dallas, Texas which was closed during the third quarter in June 2012 has been reclassified to discontinued operations and therefore is not included in the aforementioned results for the affected periods.
As of September 4, 2012, Del Frisco's Restaurant Group, Inc. owned and operated 32 restaurants across 18 states, including nine Del Frisco's, 19 Sullivan's, and four Del Frisco's Grille locations. During the third quarter, the Company opened one Del Frisco's Grille in Washington, D.C. and closed one Sullivan's in Dallas, Texas.On October 13, 2012, the Company opened a Del Frisco's Grille in Atlanta, Georgia. The final 2012 opening is a Del Frisco's in Chicago, Illinois which is scheduled for early December 2012. New Credit Facility On October 15, 2012, the Company entered into a new credit facility with JP Morgan Chase that provides for a three-year unsecured revolving credit facility of up to $25.0 million. Borrowings under the new credit facility will bear interest at a rate of LIBOR plus 1.50%. The Company is required to pay a commitment fee equal to 0.25% per annum on the available but unused revolving loan facility. The credit facility is guaranteed by significant subsidiaries of the Company. The new credit facility contains various financial covenants, including a maximum ratio of total indebtedness to EBITDA, as defined in the credit agreement, and minimum fixed charge coverage, as defined in the credit agreement. The new credit facility also contains covenants restricting certain corporate actions, including asset dispositions, acquisitions, the payment of dividends, the incurrence of indebtedness and providing financing or other transactions with affiliates.