Diversified Restaurant Holdings Reports 15.4% Increase in Revenue to $16.8 Million in Third Quarter 2012

Diversified Restaurant Holdings Reports 15.4% Increase in Revenue to $16.8
Million in Third Quarter 2012

  *Same store sales for Bagger Dave's and Buffalo Wild Wings increased 3.4%
    and 7.5%, respectively
  *Cash and cash equivalents doubles to $3.1 million
  *Company on schedule to have 45 restaurants by year-end

SOUTHFIELD, Mich., Nov. 7, 2012 (GLOBE NEWSWIRE) -- Diversified Restaurant
Holdings, Inc. (OTCQB:DFRH) ("DRH" or the "Company"), the owner, operator, and
franchisor of the unique, full-service, ultra-casual restaurant and bar Bagger
Dave's Legendary Burger Tavern^® ("Bagger Dave's") and the largest franchisee
for Buffalo Wild Wings^® ("BWW"), reported third quarter 2012 financial
results, which ended September 23, 2012.

Third quarter 2012 revenue was $16.8 million, an increase of $2.2 million, or
15.4%, over the $14.6 million generated during third quarter of 2011.
Approximately $1.3 million of the increase was attributable to revenue
generated from newer locations that did not meet the criteria for being
included in same-store-sales reporting. This included three Bagger Dave's that
opened since the first quarter of 2011 and revenue from one BWW restaurant
that opened during the fourth quarter of 2011. The remaining
$1.0 million increase was related to same-store-sales growth of 3.4% for
Bagger Dave's and 7.5% for BWW.

T. Michael Ansley, President and Chief Executive Officer of DRH, commented,
"Our commitment in creating a guest-centric culture continues to drive our
success in attracting loyal customers and delivering solid financial results.
Our management team is dedicated to developing top-performing restaurant teams
who meet our high standards and are equally dedicated to delighting our guests
to ensure our restaurants are the ultra-casual dining destination of choice."

Third Quarter Operating Performance

Food, beverage, and packaging costs increased by $0.9 million, or 21.8%, to
$5.2 million in the third quarter of 2012 from the prior-year period,
primarily due to the opening of four new restaurants since the end of the 2011
second quarter, as well as the carry-over impact of increased commodity food
prices. The average cost per pound for bone-in chicken wings was $1.97 in
third quarter of 2012 compared with $1.16 in the third quarter of 2011

The addition of four new restaurants and the preparation of opening seven new
locations in the fourth quarter drove higher labor costs, which increased
15.1% to $4.2 million in third quarter of 2012 from $3.6 million in third
quarter of 2011. However, as a percentage of sales, labor costs improved
slightly to 24.8% in third quarter of 2012 from 24.9% in the prior-year
period.

Third quarter general and administrative expenses of $1.6 million increased by
$0.4 million, or 37.6%, from $1.2 million in the third quarter of 2011. This
increase was due to the hiring of personnel necessary to support the Company's
rapid expansion. General and administrative expenses as a percentage of
revenue increased to 9.5% in 2012 third quarter from 8.0% in the same period
the prior year.

The Company was in the construction phase of seven additional restaurants
during the third quarter of 2012 compared with no new stores opened or under
construction in the third quarter of 2011. As a result, year-over-year
pre-opening costs increased by $146 thousand to $281 thousand in third
quarter.

Net income attributable to DRH for the third quarter of 2012 was $241
thousand, or $0.01 per diluted share, compared with net income of $151
thousand, or $0.01 per diluted share, in the same period of the prior year.

Year-to-Date Review

Total revenue for the nine months ended September 23, 2012 was $51.3 million,
an increase of $6.7 million, or 15.0%, compared with $44.6 million generated
during the same period in 2011, which ended September 25, 2011. Approximately
$4.1 million of the increase was attributable to revenue generated from newer
locations that did not meet the criteria for same-store-sales reporting. The
remaining $2.6 million increase was related to same-store sales growth of 9.4%
for three Bagger Dave's restaurants and 6.7% for 19 BWW restaurants meeting
same-store-sales criteria.

For the first nine months of 2012, net income attributable to DRH was $0.8
million, or $0.04 per diluted share, compared with net income of $1.3 million,
or $0.07 per diluted share, for the first nine months of 2011.

Cash flow from operations for the first nine months of 2012 was $5.7 million
compared with $5.5 million for the same period last fiscal year.

Balance Sheet

Cash and cash equivalents substantially increased by approximately $1.5
million, or 99.7%, to $3.1 million at September 23, 2012, compared with the
2011 year-end balance.

Total DRH Stockholders' equity increased 46.7% to $2.2 million in the third
quarter of 2012 from $1.5 million at the end of 2011.

On September 25, 2012, the Company entered into a senior secured credit
facility with RBS, N.A., consisting of a five-year, $37.0 million term loan, a
$10.0 million development line of credit and a
$1.0 million revolving line of credit. The term loan was primarily used to
refinance existing outstanding debt and $14.7 million went towards the recent
acquisition of eight Buffalo Wild Wings restaurants (with rights to develop
another restaurant in Indiana). DRH intends to fund up to 30% of all
construction and start-up costs for future restaurants using the $10.0 million
development line of credit. The Company believes that cash flow from
operations and the development line will be sufficient to meet its operational
funding, development, and obligations for the foreseeable future.

Outlook

Total capital expenditures for fiscal year 2012 are expected to be
approximately $10.0 million, the majority of which is for new construction.
Approximately $0.4 million is for upgrading existing stores. Through the first
nine months of 2012, capital expenditures were $7.2 compared with $6.1 for the
comparable period in 2011. DRH has three planned restaurant openings for the
remainder of 2012, which include BWW restaurants in Detroit, Michigan and Ybor
City, Florida and one Bagger Dave's restaurant in Indianapolis, Indiana,
bringing the Company's restaurant total to 45 by year's end.

On September 25, 2012, the Company completed an acquisition of eight Buffalo
Wild Wings restaurants, with four operating in Illinois and four in Indiana,
along with the right to develop a fifth Indiana location. This transaction
expands the scope of the Company's operations, adds a number of new markets to
the existing footprint, and strategically positions DRH for future expansion
throughout the Midwest. Long term, the Company is looking to leverage these
markets by expanding the Bagger Dave's concept within the same footprint.

Mr. Ansley concluded, "Our near-term focus will be to integrate the acquired
restaurants and implement our processes and systems in an effort to realize
the opportunities to improve its operating and financial performance. We are
also going to continue with our aggressive expansion strategy. With the
collective strength of our brands, the expertise and experience within the
Company, and our cost-management initiatives, we believe we can achieve solid
revenue and same-store-sales growth, successfully navigate commodity cost
volatility and industry cycles, and produce consistently superior value for
our guests and shareholders."

The Company will continue its growth in 2013 with rapid expansion of Bagger
Dave's in both Michigan and Indiana. Current targeted locations in Indiana
are: Avon, Westfield, Fishers, Greenwood, and Fort Wayne. Current targeted
locations in Michigan are: Grand Rapids and Detroit. This is in addition to
the already solidified, new Buffalo Wild Wings locations scheduled to open in
Lapeer, Michigan, Sault Saint Marie, Michigan, and Hammond, Indiana.

About Diversified Restaurant Holdings

Diversified Restaurant Holdings, Inc. ("DRH" or the "Company") is the owner,
operator, and franchisor of the unique, full-service, ultra-casual restaurant
concept, Bagger Dave's Legendary Burger Tavern^® ("Bagger Dave's") and the
largest Buffalo Wild Wings^® ("BWW") franchisee. Between the two concepts, the
Company currently operates 41 restaurants in Michigan, Florida, Illinois, and
Indiana, with an additional Bagger Dave's and two additional BWW restaurants
scheduled to open in 2012. Including these locations, and one franchised
Bagger Dave's in Missouri, the Company expects to have 45 restaurants by
year's end. The Company routinely posts news and other important information
on its website at www.diversifiedrestaurantholdings.com.

Bagger Dave's offers a full-service, family-friendly restaurant and bar with a
casual, comfortable atmosphere. The menu features freshly-made burgers (never
frozen), accompanied by more than 30 toppings from which to choose, fresh-cut
fries, hand-dipped milkshakes, and a selection of craft beer and wine.
Signature items include Sloppy Dave's BBQ^®, Train Wreck Burger^®, and Bagger
Dave's Amazingly Delicious Turkey Black Bean Chili^®. The Bagger Dave's
concept emphasizes local flair by showcasing historical photos of the city in
which each restaurant resides and features an electric train that runs above
the dining room and bar areas. Currently, there are ten corporate-owned
locations in the state of Michigan and one franchised location in Missouri.
The Company has an executed area development agreement to franchise five
additional Bagger Dave's in five states outside of Michigan. DRH is approved
to franchise Bagger Dave's in the states of Illinois, Indiana, Kentucky,
Michigan, Missouri, Ohio, and Wisconsin. For more information, visit
www.baggerdaves.com.

DRH operates 31 BWW restaurants: 14 in Michigan, nine in Florida, four in
Illinois and four in Indiana. The Company has opened 17 new BWW restaurants in
fulfillment of its 32-store Area Development Agreement ("ADA") with franchisor
Buffalo Wild Wings, Inc. (Nasdaq:BWLD). The remaining 15 restaurants under the
ADA agreement, along with an additional franchise agreement in Indiana,
suggest that the Company will operate 47 BWW's by 2017.

Safe Harbor Regarding Forward Looking Statements

The information made available in this news release contains forward-looking
statements which reflect DRH's current view of future events, results of
operations, cash flows, performance, business prospects and opportunities.
Wherever used, the words "anticipate," "believe," "expect," "intend," "plan,"
"project," "will continue," "will likely result," "may," and similar
expressions identify forward-looking statements as such term is defined in the
Securities Exchange Act of 1934. Any such forward-looking statements are
subject to risks and uncertainties and the Company's actual growth, results of
operations, financial condition, cash flows, performance, business prospects
and opportunities could differ materially from historical results or current
expectations. Some of these risks include, without limitation, the impact of
economic and industry conditions, competition, food and drug safety issues,
store expansion and remodeling, labor relations issues, costs of providing
employee benefits, regulatory matters, legal and administrative proceedings,
information technology, security, severe weather, natural disasters,
accounting matters, other risk factors relating to our business or industry
and other risks detailed from time to time in the Securities and Exchange
Commission filings of DRH. Forward-looking statements contained herein speak
only as of the date made and, thus, DRH undertakes no obligation to update or
publicly announce the revision of any of the forward-looking statements
contained herein to reflect new information, future events, developments or
changed circumstances or for any other reason.

FINANCIAL TABLES FOLLOW

DIVERSIFIED RESTAURANT HOLDINGS, INC. AND SUBSIDIARIES                      
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)                           
                                                                        
               Three Months Ended         Nine Months Ended
               September   September   September   September
                23,           25,           23,           25,
               2012         2011         2012         2011
Revenue                                             
Food and        $           $           $           $
beverage sales  16,838,169    14,588,078    51,315,764    44,617,381
Franchise
royalties and   6,323       --         7,537       --
fees
Total revenue   16,844,492  14,588,078  51,323,301  44,617,381
Operating                                           
expenses
Restaurant
operating costs
(exclusive of
depreciation
and                                                 
amortization
shown
separately
below):
Food, beverage, 5,157,991    4,236,077    15,904,293   12,683,404
and packaging
Labor           4,174,875    3,628,433    12,840,361   11,088,641
Occupancy       961,610      824,,538     2,787,327    2,388,415
Other operating 3,419,716    2,973,089    10,198,008   8,625,740
costs
General and
administrative  1,606,495    1,167,456    4,328,555    3,476,097
expenses
Pre-opening     281,390      135,009      547,876      403,714
costs
Depreciation
and             1,000,191    881,432      2,930,606    2,491,649
amortization
Loss on
disposal of     23,374       3,113        29,977       30,157
property and
equipment
Total operating 16,625,642  13,849,147  49,567,003  41,187,817
expenses
Operating       218,850     738,931     1,756,298   3,429,564
profit
                                                   
Change in fair
value of        --         (140,629)   (43,361)    (345,249)
derivative
instruments
Interest        (277,919)    (282,934)    (843,563)    (876,368)
expense
Other income,   314,421      29,327       362,160      37,839
net
Income before   255,352      344,695      1,231,534    2,245,786
income taxes
Income tax
(benefit)       (2,158)      155,176      333,387      816,661
provision
Netincome      257,510     189,519     898,147     1,429,125
Less:Income
attributable to (16,314)    (38,747)    (95,040)    (115,232)
non-controlling
interest
Net income                                                $
attributable to $241,196  $150,772   $803,107  1,313,893
DRH
Basic earnings  $0.01      $0.01      $0.04     $0.07
per share
Fully diluted
earnings per    $0.01      $0.01      $ 0.04     $0.07
share
Weighted average number of                           
common shares outstanding
Basic            18,954,025  18,876,000  18,948,624  18,876,000
Diluted          19,104,577  19,039,692  19,088,856  19,048,836

                                                        
DIVERSIFIED RESTAURANT HOLDINGS, INC. AND SUBSIDIARIES                     
CONSOLIDATED BALANCE SHEETS (UNAUDITED)                                    
                                         September 23,  December 25,
ASSETS                                    2012            2011
Current assets                                           
Cash and cash equivalents                 $3,070,082    $1,537,497
Accounts receivable - other               448,008        20,497
Inventory                                 598,540        601,765
Prepaid assets                            171,894        207,608
Total current assets                      4,288,524      2,367,367
Deferred income taxes                     172,770        272,332
Property and equipment, net - restricted  1,435,277      1,457,770
assets of VIE
Property and equipment, net               26,289,136     22,064,544
Intangible assets, net                    1,101,777     1,113,997
Other long-term assets                    81,350         74,389
Total assets                              $33,368,834   $27,350,399
                                                        
LIABILITIES AND STOCKHOLDERS' EQUITY                    
Current liabilities                                      
Accounts payable                          $2,841,875    $1,682,462
Accrued compensation                      1,127,665      760,548
Other accrued liabilities                 543,758        649,784
Current portion of long-term debt         2,434,048      2,967,135
(including VIE debt of $89,414)
Current portion of deferred rent          174,906        180,480
Total current liabilities                 7,122,252      6,240,409
Deferred rent, less current portion       2,140,463      1,750,017
Other liabilities - interest rate swap    392,263        613,999
Long-term debt, less current portion
(including VIE debt of $1,095,317 and     21,044,556     16,841,355
$1,140,024, respectively)
Total liabilities                         30,699,534     25,445,780
                                                        
Stockholders' equity                                     
Common stock -- $0.0001 par value;
100,000,000 shares authorized; 18,952,900 1,888          1,888
and 18,936,400 shares, respectively,
issued and outstanding
Additional paid-in capital                2,936,504      2,771,077
Accumulated other comprehensive loss      (258,893)      --
Retained earnings (accumulated deficit)   (450,724)      (1,253,831)
Total DRH stockholders' equity            2,228,775      1,519,134
Non-controlling interest in VIE           440,525        385,485
Total stockholders' equity                2,669,300      1,904,619
Total liabilities and stockholders'       $33,368,834   $27,350,399
equity

                                             
                                                                           
DIVERSIFIED RESTAURANT HOLDINGS, INC. AND SUBSIDIARIES                      
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)                           
                                             
                                             Nine Months Ended
                                             September 23,  September 25,
                                             2012           2011
Cash flows from operating activities                        
Net income                                    $898,147     $1,429,125
Adjustments to reconcile net income to net                  
cash provided by operating activities
Depreciation and amortization                 2,930,606     2,491,649
Write off of loan fees                        694           --
Loss on disposal of property and equipment    29,977        30,157
Share-based compensation                      165,427       65,944
Change in fair value of derivative            43,361         345,249
instruments
Deferred income taxes                         232,932       608,154
Changes in operating assets and liabilities                 
that provided (used) cash
Accounts receivable - other                   (427,511)     (14,348)
Inventory                                     3,225         (140,545)
Prepaid assets                                35,714        56,440
Other current assets                          --            43,348
Intangible assets                             62,356        (72,822)
Other long-term assets                        (6,961)       (4,575)
Accounts payable                              1,159,413     77,180
Accrued liabilities                           261,091       452,855
Deferred rent                                 384,872      153,057
Net cash provided by operating activities     5,773,343     5,520,868
                                                           
Cash flows from investing activities                        
Purchases of property and equipment           (7,213,512)   (6,051,295)
Net cash used in investing activities         (7,213,512)   (6,051,295)
Cash flows from financing activities                        
Proceeds from issuance of long-term debt      20,270,332    3,138,321
Repayment of interest rate swap liability     (657,360)     --
Repayments of long-term debt                  (16,600,218)  (1,659,353)
Distributions from non-controlling interest   (40,000)      (107,000)
Net cash provided by financing activities     2,972,754      1,371,968
Net increase in cash and cash equivalents     1,532,585     841,541
Cash and cash equivalents, beginning of       1,537,497     1,358,381
period
Cash and cash equivalents, end of period      $3,070,082   $2,199,922

                                      

DIVERSIFIED RESTAURANT HOLDINGS, INC. AND SUBSIDIARIES                       
OPERATING PERFORMANCE (UNAUDITED)                                            
                      
(in millions)         Three Months Ended
                       September 23, September 25, YOY        YOY
                      2012          2011          Increase   Percent Change
                                                   (Decrease)
Food and beverage      $5.2         $4.2         $0.9      21.8%
costs
% of revenue           30.6%         29.0%                   
                                                          
Labor                  $4.2          $3.6          $0.5       15.1%
% of revenue           24.8%         24.9%                   
                                                          
G&A expense            $1.6         $1.2         $ 0.4      37.6%
% of revenue           9.5%         8.0%                    
                                                          
Operating Profit       $0.2         $0.7         ($ 0.5)    (70.4%)
Operating margin       1.3%          5.1%                    

CONTACT: Investor Contact:
         Deborah K. Pawlowski
         Kei Advisors LLC
         Phone: 716.843.3908/ 716.843.3874
         Email: dpawlowski@keiadvisors.com
        
         Company Contact:
         David Burke
         Chief Financial Officer
         Phone: 248.223.9160
 
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