Del Frisco's Restaurant (DFRG) Inactive Financial Report Summaries

Risks

• If our restaurants are not able to compete successfully with other restaurants, our business and results of operations may be adversely affected.
• Our future growth depends in part on our ability to open new restaurants and operate them profitably, and if we are unable to successfully execute this strategy, our results of operations could be adversely affected.
• We have incurred substantial expenses related to the completion of the Barteca Acquisition, and we expect to incur additional expenses in connection with the integration of Barteca’s business with our existing business.
• Combining Barteca’s business with ours may be more difficult, costly or time consuming than expected and the anticipated synergies and other benefits of the Barteca Acquisition may not be realized.
• We obtained financing to complete the Barteca Acquisition, which could adversely affect us, including by decreasing our business flexibility, and may increase our interest expense.
• The future results of the combined company may be adversely impacted if the combined company does not effectively manage its expanded operations following the completion of the Barteca Acquisition.
• Uncertainties associated with the Barteca Acquisition may cause the departure of management personnel and other key employees, which could adversely affect the future business and operations of the combined company.
• The failure to successfully accelerate development of our Del Frisco's Double Eagle Steakhouse concept could have a material adverse effect on our financial condition and results of operations.
• Our growth, including the continued development of the Del Frisco's Double Eagle concept, as well as recently acquired Barcelona and bartaco concepts, may strain our infrastructure and resources, which could delay the opening of new restaurants and adversely affect our ability to manage our existing restaurants.
• Our New York Del Frisco’s Double Eagle location represents a significant portion of our revenues, and any significant downturn in its business or disruption in the operation of this location could harm our business, financial condition and results of operations.
• Negative customer experiences or negative publicity surrounding our restaurants or other restaurants could adversely affect sales in one or more of our restaurants and make our brands less valuable.
• Negative publicity relating to food safety and food-borne illnesses, could result in reduced consumer demand for our menu offerings, which could reduce sales.
• Increases in the prices of, and/or reductions in the availability of commodities, primarily beef, could adversely affect our business and results of operations.
• We depend upon frequent deliveries of food and other supplies, in most cases from a limited number of suppliers, which subjects us to the possible risks of shortages, interruptions and price fluctuations.
• Changes in consumer preferences and discretionary spending patterns could adversely impact our business and results of operations.
• Restaurant companies, including ours, have been the target of class action lawsuits and other proceedings alleging, among other things, violations of federal and state workplace and employment laws. Proceedings of this nature, if successful, could result in our payment of substantial damages.
• Our business is subject to substantial government regulation.
• We occupy most of our restaurants under long-term non-cancelable leases for which we may remain obligated to perform under even after a restaurant closes, and we may be unable to renew leases at the end of their terms.
• Adverse weather conditions and natural disasters could adversely affect our restaurant sales.
• The impact of negative economic factors, including the availability of credit, on our landlords and other retail center tenants could negatively affect our financial results.
• Our inability or failure to recognize, respond to and effectively manage the accelerated impact of social media could have a material adverse impact on our business.
• Fixed rental payments account for a significant portion of our operating expenses, which increases our vulnerability to general adverse economic and industry conditions and could limit our operating and financing flexibility.
• Any future indebtedness we may incur may limit our operational and financing flexibility and negatively impact our business.
• The terms of our credit facility impose operating and financial restrictions on us.
• The failure to enforce and maintain our intellectual property rights could enable others to use names confusingly similar to the names and marks used by our restaurants, which could adversely affect the value of our brands.
• Information technology system failures or breaches of our network security, including with respect to confidential information, could interrupt our operations and adversely affect our business.
• We expect to offer restricted stock and other forms of stock-based compensation in the future, which have the potential to dilute stockholder value and cause the price of our common stock to decline.
• We are a holding company and depend on the cash flow of our subsidiaries.
• Provisions of our charter documents, Delaware law and other documents could discourage, delay or prevent a merger or acquisition at a premium price.
• We are no longer an “emerging growth company” and, as a result, we are subject to increased disclosure and governance requirements.
• We have had a material weakness in internal control over financial reporting in the past and cannot assure you that additional material weaknesses will not be identified in the future. Our failure to implement and maintain effective internal control over financial reporting could result in material misstatements in our financial statements which could require us to restate financial statements, cause investors to lose confidence in our reported financial information and have a negative effect on our stock price.
• Our reported financial results may be adversely affected by changes in accounting principles applicable to us.
• We have recorded significant valuation allowances on our deferred tax assets, and the recording and release of such allowances may have a material impact on our results of operations and cause fluctuations in our stock price.