Diversified Restaurant Holdings Reports Fourth Quarter Revenue Up 62.4%
Fourth Quarter Operating Results
Food, beverage, and packaging costs increased to $8.2 million in the fourth quarter of 2012 from $4.8 million in the prior-year period, primarily due to the opening of new restaurants along with the impact of increased commodity food prices and inflationary factors. The average cost per pound for bone-in chicken wings increased dramatically in 2012 compared with the average cost per pound in 2011. Food, beverage, and packaging costs as a percentage of sales were 31.4% and 29.9% in the fourth quarters of 2012 and 2011, respectively.
Compensation costs increased $2.5 million to $6.6 million in fourth quarter of 2012 from $4.1 million in fourth quarter of 2011 due to the increased staffing needs for the new restaurants. However, as a percentage of sales, labor costs improved to 25.3% in fourth quarter of 2012 from 25.7% in the prior-year period.
Net loss attributable to DRH in the fourth quarter of 2012 was $623,008, a decrease from net income of $528,293 in the same period of the prior year.Full Year 2012 Review Total revenue of $77.4 million for fiscal 2012 reflects $6.7 million that was attributable to revenue generated from the new locations that did not meet the criteria for same-store-sales reporting. In addition, $4.1 million was attributable to the eight BWW locations purchased in September 2012, and a $5.9 million increase in same store sales growth. Operating expenses were up 32.8% in 2012, reflecting the addition of the new stores during the year. DRH generated $1.6 million in operating profit in 2012, a decrease of $2.0 million compared with $3.6 million in 2011, primarily due to increased food, beverage, and packaging costs as a result of the number of restaurants operated and a 62.8% year-over-year increase in the average cost per pound for bone-in chicken wings. For fiscal 2012, net income attributable to DRH was $180,099, or $0.01 per diluted share, compared with net income of $1.8 million, or $0.10 per diluted share, in fiscal 2011.
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