Diversified Restaurant Holdings, Inc. (BAGR) saw its loss narrow to $4.86 million, or $0.18 a share for the quarter ended Dec. 25, 2016. In the previous year period, the company reported a loss of $9.56 million, or $0.36 a share.
Revenue during the quarter dropped 3.55 percent to $40.80 million from $42.30 million in the previous year period. Gross margin for the quarter contracted 161 basis points over the previous year period to 70.80 percent. Total expenses were 97.91 percent of quarterly revenues, down from 99.34 percent for the same period last year. This has led to an improvement of 143 basis points in operating margin to 2.09 percent.
Operating income for the quarter was $0.85 million, compared with $0.28 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $4.46 million compared with $6.36 million in the prior year period. At the same time, adjusted EBITDA margin contracted 409 basis points in the quarter to 10.93 percent from 15.03 percent in the last year period.
David G. Burke, president and chief executive officer, commented, "With the successful spin-off of Bagger Dave’s, we are now exclusively focused on driving strong performance and growth with our Buffalo Wild Wings franchise stores, after another strong year of growth in 2016. We will continue to tightly manage our costs and use our strong positive cash flow to reduce debt and strengthen our balance sheet, providing greater financial flexibility and enhancing our future growth potential."
Debt comes down marginally
Diversified Restaurant Holdings, Inc. has recorded a decline in total debt over the last one year. It stood at $121.19 million as on Dec. 25, 2016, down 4.02 percent or $5.07 million from $126.26 million on Dec. 27, 2015. Total debt was 90.99 percent of total assets as on Dec. 25, 2016, compared with 76 percent on Dec. 27, 2015. Interest coverage ratio improved to 0.59 for the quarter from 0.20 for the same period last year.
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