Exhibit 99.2
DIVERSIFIED RESTAURANT HOLDINGS, INC. AND AMC MANAGED AFFILIATES GROUP
PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
Basis of Presentation
On February 5, 2010, Diversified Restaurant Holdings, Inc. (the “Company” or “DRH”) filed a Current Report on Form 8-K to report that, among other things, the Company had, through its wholly-owned subsidiary AMC Wings, Inc. (“Wings”), acquired nine affiliated Buffalo Wild Wings restaurants (the “Affiliated Restaurants” or “AMC Managed Affiliates Group”) on February 1, 2010, pursuant to the terms of various Purchase Agreements by and between the Company and each of the Affiliated Restaurants, effective as of February 1, 2010 (the “Transaction”).
The Company’s most recent fiscal year ended on December 27, 2009, while the most recent fiscal year for the Affiliated Restaurants ended on December 31, 2009. The difference in data related to the difference in fiscal-year end-dates has been deemed immaterial for this disclosure.
The unaudited pro forma balance sheet data as of December 27, 2009 (and December 31, 2009 for Affiliated Restaurants) gives effect to the Transaction as if it had occurred December 27, 2009.
The unaudited pro forma consolidated statements of operations data ended December 27, 2009 (and December 31, 2009 for Affiliated Restaurants) give effect to the Transaction as if it occurred on January 1, 2009.
As the Transaction occurred between affiliated entities, no goodwill or other adjustments were recognized as a result of recording the Transaction.
The unaudited pro forma consolidated financial statements do not purport to represent what our results of operations or financial condition actually would have been if the Transaction occurred on the dates indicated, nor do they purport to represent or project our results of operations for any future period or our financial condition as of any future date. You should read the unaudited pro forma consolidated financial statements in conjunction with our audited consolidated financial statements, related notes and management’s discussion and analysis in our Form 10-K for the year ended December 27, 2009.
* * * * *
PRO-FORMA DRH & AMC MANAGED AFFILIATES GROUP
CONSOLIDATED BALANCE SHEETS
AMC Managed | ||||||||||||||||
DRH | Affiliates Group | Pro Forma* | ||||||||||||||
December 27 | December 31 | Pro Forma | December 27 & 31 | |||||||||||||
2009 | 2009 | Adjustments | 2009 | |||||||||||||
ASSETS | ||||||||||||||||
Current assets | ||||||||||||||||
Cash and cash equivalents | $ | 649,518 | $ | 697,534 | $ | — | $ | 1,347,052 | ||||||||
Accounts receivable — related party | 254,540 | 369,445 | — | 623,985 | ||||||||||||
Inventory | 125,332 | 181,969 | — | 307,301 | ||||||||||||
Prepaid assets | 103,452 | 49,250 | — | 152,702 | ||||||||||||
Accounts receivable — other | 11,219 | 4,666 | — | 15,885 | ||||||||||||
Other assets | 49,280 | 26,497 | — | 75,777 | ||||||||||||
Total current assets | 1,193,341 | 1,329,361 | — | 2,522,702 | ||||||||||||
Property and equipment, net | 7,866,149 | 3,789,364 | — | 1,655,513 | ||||||||||||
Intangible assets, net | 411,983 | 339,796 | — | 751,779 | ||||||||||||
Deferred income taxes | 246,754 | — | — | 246,754 | ||||||||||||
Total assets | $ | 9,718,227 | $ | 5,458,521 | $ | — | $ | 15,176,748 | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
Current liabilities | ||||||||||||||||
Current portion of long-term debt | $ | 1,402,742 | $ | 790,315 | — | $ | 2,193,057 | |||||||||
Accounts payable | 293,984 | 233,167 | — | 527,151 | ||||||||||||
Accrued liabilities | 329,355 | 345,413 | — | 674,768 | ||||||||||||
Deferred rent | 54,273 | 50,667 | — | 104,940 | ||||||||||||
Total current liabilities | 2,080,354 | 1,419,562 | — | 3,499,916 | ||||||||||||
Accrued rent | 253,625 | 592,389 | — | 846,014 | ||||||||||||
Deferred rent | 422,068 | 215,956 | — | 638,024 | ||||||||||||
Other liabilities — interest rate swap | 167,559 | 46,045 | — | 213,604 | ||||||||||||
Long-term debt, less current portion | 4,601,909 | 2,165,132 | — | 6,767,041 | ||||||||||||
Related party payable | — | 430,351 | — | 430,351 | ||||||||||||
Total liabilities | 7,525,515 | 4,869,435 | — | 12,394,950 | ||||||||||||
Stockholders’ / members’ equity | ||||||||||||||||
Common stock | 1,863 | 528,605 | — | 530,468 | ||||||||||||
Additional paid In capital | 2,356,155 | 353,692 | — | 2,709,847 | ||||||||||||
Retained earnings | (165,306 | ) | 106,837 | — | (58,469 | ) | ||||||||||
Members’ equity | — | (400,048 | ) | — | (400,048 | ) | ||||||||||
Total stockholders’ and members’ equity | 2,192,712 | 589,086 | — | 2,781,798 | ||||||||||||
Total liabilities and stockholders’ / members’equity | $ | 9,718,227 | $ | 5,458,521 | $ | — | $ | 15,176,748 | ||||||||
* | Pro Forma presentation gives effect to the Transaction as if it had occurred December 27, 2009. |
2
PRO-FORMA DRH & AMC MANAGED AFFILIATES GROUP
STATEMENT OF OPERATIONS
AMC Managed | ||||||||||||||||
DRH | Affiliates Group | Pro Forma* | ||||||||||||||
December 27 | December 31 | Pro Forma | December 27 & 31 | |||||||||||||
2009 | 2009 | Adjustments | 2009 | |||||||||||||
Revenue | ||||||||||||||||
Management and advertising fees | $ | 1,744,505 | $ | — | $ | (1,744,505 | )(1) | $ | — | |||||||
Food and beverage sales | 17,317,996 | 24,436,519 | — | 41,754,515 | ||||||||||||
Total revenue | 19,062,501 | 24,436,519 | (1,744,505 | ) | 41,754,515 | |||||||||||
Operating expenses | ||||||||||||||||
Compensation costs | 5,724,053 | 5,746,191 | — | 11,470,244 | ||||||||||||
Food and beverage costs | 5,325,825 | 7,703,278 | — | 13,029,103 | ||||||||||||
General and administrative | 4,693,219 | 5,199,140 | — | 9,892,359 | ||||||||||||
Occupancy | 1,132,364 | 1,802,999 | — | 2,935,363 | ||||||||||||
Management and advertising fees | — | 1,744,505 | (1,744,505 | )(1) | — | |||||||||||
Depreciation and amortization | 1,203,337 | 1,160,411 | — | 2,363,748 | ||||||||||||
Total operating expenses | 18,078,798 | 23,356,524 | (1,744,505 | ) | 39,690,817 | |||||||||||
Income from operations | 983,703 | 1,079,995 | — | 2,063,698 | ||||||||||||
Interest expense | 445,820 | 332,792 | — | 778,612 | ||||||||||||
Other (income)/expense, net | (80,706 | ) | (80,720 | ) | — | (161,426 | ) | |||||||||
(Loss) income before income taxes | 618,589 | 827,923 | — | 1,446,512 | ||||||||||||
Income tax benefit (provision) | (252,064 | ) | — | — | (252,064 | ) | ||||||||||
Net (loss) income | $ | 366,525 | $ | 827,923 | $ | — | $ | 1,194,448 | ||||||||
* | Pro Forma presentation gives effect to the Transaction as if it occurred on January 1, 2009. | |
(1) | Reflects the elimination of management and advertising fees paid by the AMC Managed Affiliates Group to DRH. |
3