News Release
Famous Dave’s of America, Inc. Appoints Eric Hirschhorn To Board of Directors and Reports Results For First Quarter Fiscal 2017
Today, the Company reported financial results for the first quarter ending
Highlights for the first quarter of 2017:
- Franchise-operated comparable restaurant sales decreased 4.8%
- Company-owned comparable restaurant sales decreased 3.3%
- Restaurant-level operating margin increased to 2.8%, from 2.1% during the first quarter of 2016
- Closed one franchise-operated restaurant
- Closed two Company-owned restaurants
Key Operating Metrics
Three Months Ended | |||||||
April 2, | April 3, | ||||||
2017 |
2016 |
||||||
Restaurant count: | |||||||
Franchise-operated | 138 | 141 | |||||
Company-owned | 35 | 37 | |||||
Total | 173 | 178 | |||||
Comparable restaurant sales %: | |||||||
Franchise-operated | (4.8)% | (6.1)% | |||||
Company-owned | (3.3)% | (7.7)% | |||||
Total | (4.5)% | (6.3)% | |||||
(in thousands, expect per share data) | |||||||
System-wide restaurant sales(1) | $ | 100,389 |
$ | 104,112 | |||
Net (loss) income from continuing operations | $ | (1,246) | $ | 149 | |||
Adjusted net loss from continuing operations(2) | (332) | (22) | |||||
Net (loss) income from continuing operations, per share | $ | (0.18) | $ | 0.02 | |||
Adjusted net loss from continuing operations, per share(2) | (0.05) | --- | |||||
Adjusted EBITDA(2) | $ | 363 | $ | 1,126 |
____________________________________
(1) System-wide restaurant sales for all Company-owned and franchise-operated restaurants, as reported by franchisees. Restaurant sales for franchise-operated restaurants are not revenues of the Company and are not included in the Company’s consolidated financial statements.
(2) Adjusted net (loss) income and adjusted EBITDA are non-GAAP measures. A reconciliation of all non-GAAP measures to the most directly comparable GAAP measure is included in the accompanying financial tables. See “Non-GAAP Reconciliation.”
First Quarter 2017 Review
Total revenue for the quarter was
Restaurant-level operating margin for Company-owned restaurants was 2.8%, an increase from 2.1% in the first quarter of 2016. The improvement was primarily driven by the continued focus on our actual versus theoretical food cost initiative, commodity deflation, more effective and efficient management of labor versus optimum, and the timing of marketing spend. These benefits were slightly offset by wage rate inflation and sales deleverage on fixed costs.
General and administrative expenses increased to
Net (loss) income from continuing operations was a loss of
Adjusted net (loss) income from continuing operations, a non-GAAP measure, decreased to a loss of
Refranchising and Restaurant Optimization Plan
On
Executive Comments
About Famous Dave’s
The Company develops, owns, operates and franchises barbeque restaurants. Its menu features award-winning barbequed and grilled meats, a selection of salads, sandwiches, side items, and made-from-scratch desserts. As of
Conference Call
The Company will host a conference call
Non-GAAP Financial Measures
To supplement its consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in
Adjusted net (loss) income from continuing operations is net (loss) income from continuing operations, plus items such as asset impairment, estimated lease termination and other closing costs, net (loss) gain on disposal of equipment, settlement agreements, stock-based compensation, severance, and the related tax impact. This number is divided by the weighted-average number of basic shares of stock outstanding during each period presented to arrive at adjusted net (loss) income from continuing operations, per share. Adjusted EBITDA is net (loss) income from continuing operations, plus items such as asset impairment, estimated lease termination and other closing costs, depreciation and amortization, interest expense, net, provision (benefit) for income taxes, net (loss) gain on disposal of equipment, settlement agreements, stock-based compensation, and severance.
Forward-Looking Statements
Statements in this press release that are not strictly historical, including but not limited to statements regarding the timing of the Company’s restaurant openings and the timing or success of refranchising plans, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, which may cause the Company’s actual results to differ materially from expected results. Although the Company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectation will be attained. Factors that could cause actual results to differ materially from Famous Dave’s expectation include financial performance, restaurant industry conditions, execution of restaurant development and construction programs, franchisee performance, changes in local or national economic conditions, availability of financing, governmental approvals and other risks detailed from time to time in the Company’s
FAMOUS DAVE’S OF AMERICA, INC. AND SUBSIDIARIES | |||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
APRIL 2, 2017 AND APRIL 3, 2016 | |||||||
(in thousands, except per share data) | |||||||
(Unaudited) | |||||||
Three Months Ended | |||||||
April 2, | April 3, | ||||||
2017 | 2016 | ||||||
Revenue: | |||||||
Restaurant sales, net | $ | 17,977 | $ | 18,992 | |||
Franchise royalty revenue | 3,782 | 4,110 | |||||
Franchise fee revenue | --- | 135 | |||||
Licensing and other revenue | 217 | 248 | |||||
Total revenue | 21,976 | 23,485 | |||||
Costs and expenses: | |||||||
Food and beverage costs | 5,438 | 6,023 | |||||
Labor and benefits costs | 6,509 | 6,853 | |||||
Operating expenses | 5,534 | 5,709 | |||||
Depreciation and amortization | 755 | 981 | |||||
General and administrative expenses | 4,593 | 3,720 | |||||
Asset impairment and estimated lease | |||||||
termination and other closing costs | 1,133 | 8 | |||||
Net loss (gain) on disposal of property | 1 | (204 | ) | ||||
Total costs and expenses | 23,963 | 23,090 | |||||
(Loss) income from operations | (1,987 | ) | 395 | ||||
Other expense: | |||||||
Interest expense | (187 | ) | (178 | ) | |||
Interest income | --- | 1 | |||||
Total other expense, net | (187 | ) | (177 | ) | |||
(Loss) income before income taxes | (2,174 | ) | 218 | ||||
Income tax benefit (expense) | 928 | (69 | ) | ||||
Net (loss) income from continuing operations | (1,246 | ) | 149 | ||||
Net income from discontinued operations, net of tax | --- | 681 | |||||
Net (loss) income | $ | (1,246 | ) | $ | 830 | ||
Basic net (loss) income per share - continuing operations | $ | (0.18 | ) | $ | 0.02 | ||
Basic net income per share - discontinued operations | $ | --- | $ | 0.10 | |||
Basic net (loss) income per share | $ | (0.18 | ) | $ | 0.12 | ||
Diluted net (loss) income per share - continuing operations | $ | (0.18 | ) | $ | 0.02 | ||
Diluted net income per share - discontinued operations | $ | --- | $ | 0.10 | |||
Diluted net (loss) income per share | $ | (0.18 | ) | $ | 0.12 | ||
Weighted average shares outstanding - basic | 6,954 | 6,948 | |||||
Weighted average shares outstanding - diluted | 6,954 | 6,958 | |||||
FAMOUS DAVE’S OF AMERICA, INC. AND SUBSIDIARIES | ||||||
OPERATING RESULTS | ||||||
(unaudited) | ||||||
Three Months Ended | ||||||
April 2, | April 3, | |||||
2017 | 2016 | |||||
Food and beverage costs(1) | 30.2% | 31.7% | ||||
Labor and benefits(1) | 36.2% | 36.1% | ||||
Operating expenses(1) | 30.8% | 30.1% | ||||
Restaurant level operating margin(1)(3) | 2.8% | 2.1% | ||||
Depreciation & amortization(2) | 3.4% | 4.2% | ||||
General and administrative(2) | 20.9% | 15.8% | ||||
(Loss) income from operations(2) | (9.0%) | 1.7% | ||||
(1)As a percentage of restaurant sales, net | ||||||
(2)As a percentage of total revenue | ||||||
(3)Restaurant level margins are equal to restaurant sales, net, less restaurant level food and beverage costs, labor and benefit costs, and operating expenses. |
FAMOUS DAVE’S OF AMERICA, INC. AND SUBSIDIARIES | ||||||
CONSOLIDATED BALANCE SHEETS | ||||||
APRIL 2, 2017 AND JANUARY 1, 2017 | ||||||
(in thousands, except per share data) | ||||||
April 2, | January 1, | |||||
2017 | 2017 | |||||
ASSETS | (Unaudited) | |||||
Current assets: | ||||||
Cash and cash equivalents | $ | 4,865 | $ | 4,450 | ||
Restricted cash | 1,796 | 1,714 | ||||
Accounts receivable, net | 5,474 | 5,257 | ||||
Inventories | 1,425 | 1,499 | ||||
Prepaid expenses and other current assets | 5,473 | 3,531 | ||||
Assets held for sale | --- | 1 | ||||
Total current assets | 19,033 | 16,452 | ||||
Property, equipment and leasehold improvements, net | 25,354 | 25,912 | ||||
Other assets: | ||||||
Intangible assets, net | 2,556 | 2,565 | ||||
Deferred tax assets | 4,229 | 4,633 | ||||
Other assets | 1,355 | 1,383 | ||||
$ | 52,527 | $ | 50,945 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
Current liabilities: | ||||||
Current portion of long-term debt and financing lease obligation | $ | 2,084 | $ | 1,371 | ||
Accounts payable | 6,299 | 5,311 | ||||
Accrued compensation and benefits | 1,965 | 1,321 | ||||
Other current liabilities | 4,186 | 3,140 | ||||
Total current liabilities | 14,534 | 11,143 | ||||
Long-term liabilities: | ||||||
Long-term debt, less current portion | 8,608 | 8,849 | ||||
Financing lease obligation, less current portion | 1,469 | 2,280 | ||||
Other liabilities | 9,142 | 8,705 | ||||
Total liabilities | 33,753 | 30,977 | ||||
Shareholders’ equity: | ||||||
Common stock, $0.01 par value, 100,000 shares authorized, | ||||||
6,958 shares issued and outstanding at | ||||||
April 2, 2017 and January 1, 2017, respectively | 66 | 66 | ||||
Retained earnings | 18,708 | 19,902 | ||||
Total shareholders’ equity | 18,774 | 19,968 | ||||
$ | 52,527 | $ | 50,945 | |||
FAMOUS DAVE’S OF AMERICA, INC. AND SUBSIDIARIES | |||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
APRIL 2, 2017 AND APRIL 3, 2016 | |||||||
(in thousands) | |||||||
(Unaudited) | |||||||
Three Months Ended | |||||||
April 2, | April 3, | ||||||
2017 | 2016 | ||||||
Cash flows from operating activities: | |||||||
Net (loss) income from continuing operations | $ | (1,246 | ) | $ | 149 | ||
Adjustments to reconcile net (loss) income to cash flows provided by operations: | |||||||
Depreciation and amortization | 755 | 981 | |||||
Asset impairment and estimated lease termination and other closing costs | 1,133 | 8 | |||||
Net loss (gain) on disposal of property | 1 | (204 | ) | ||||
Amortization of deferred financing costs | 7 | 9 | |||||
Deferred income taxes | 348 | --- | |||||
Deferred rent | 144 | 192 | |||||
Stock-based compensation | 107 | (54 | ) | ||||
Changes in operating assets and liabilities: | |||||||
Restricted cash | (81 | ) | (115 | ) | |||
Accounts receivable, net | (184 | ) | (428 | ) | |||
Inventories | 74 | 210 | |||||
Prepaid expenses and other current assets | (2,087 | ) | (105 | ) | |||
Accounts payable | 853 | 240 | |||||
Accrued compensation and benefits | 619 | 107 | |||||
Other current liabilities | 420 | 329 | |||||
Other liabilities | 1 | (18 | ) | ||||
Cash flows provided by continuing operating activities | 864 | 1,301 | |||||
Cash flows used for discontinued operating activities | --- | (785 | ) | ||||
Cash flows provided by operating activities | 864 | 516 | |||||
Cash flows used for investing activities: | |||||||
Proceeds from the sale of assets | --- | 1,053 | |||||
Purchases of property, equipment and leasehold improvements | (104 | ) | (129 | ) | |||
Cash flows (used for) provided by continuing investing activities | (104 | ) | 924 | ||||
Cash flows provided by discontinued investing activities | --- | 1,150 | |||||
Cash flows (used for) provided by investing activities | (104 | ) | 2,074 | ||||
Cash flows used for financing activities: | |||||||
Proceeds from line of credit | --- | 1,855 | |||||
Payments of debt issuance costs | (15 | ) | --- | ||||
Payments on long-term debt and financing lease obligation | (330 | ) | (2,145 | ) | |||
Cash flows used for financing activities | (345 | ) | (290 | ) | |||
Increase in cash and cash equivalents | 415 | 2,300 | |||||
Cash and cash equivalents, beginning of period | 4,450 | 5,300 | |||||
Cash and cash equivalents, end of period | $ | 4,865 | $ | 7,600 | |||
FAMOUS DAVE’S OF AMERICA, INC. AND SUBSIDIARIES | ||||||||
NON-GAAP RECONCILIATION | ||||||||
(in thousands, except per share data) | ||||||||
(unaudited) | ||||||||
Three Months Ended |
||||||||
April 2, |
April 3, |
|||||||
2017 | 2016 | |||||||
Net (loss) income from continuing operations | $ | (1,246 | ) | $ | 149 | |||
Asset impairment and estimated lease termination | ||||||||
and other closing costs | 1,133 | 8 | ||||||
Net loss (gain) on disposal of equipment | 1 | (204 | ) | |||||
Stock-based compensation | 107 | (54 | ) | |||||
Severance | 354 | --- | ||||||
Tax adjustment | (681 | ) | 79 | |||||
Adjusted net loss from continuing operations | $ | (332 | ) | $ | (22 | ) | ||
Basic adjusted net loss per common share | ||||||||
from continuing operations | $ | (0.05 | ) | $ | --- | |||
Diluted adjusted net loss per common share | ||||||||
from continuing operations | $ | (0.05 | ) | $ | --- | |||
Weighted average common share outstanding - basic | 6,954 | 6,948 | ||||||
Weighted average common share outstanding - diluted | 6,954 | 6,958 | ||||||
Net (loss) income from continuing operations | $ | (1,246 | ) | $ | 149 | |||
Asset impairment and estimated lease termination | ||||||||
and other closing costs | 1,133 | 8 | ||||||
Depreciation and amortization | 755 | 981 | ||||||
Interest expense, net | 187 | 177 | ||||||
(Benefit) provision for income taxes | (928 | ) | 69 | |||||
Net gain on disposal of equipment | 1 | (204 | ) | |||||
Stock-based compensation | 107 | (54 | ) | |||||
Severance | 354 | --- | ||||||
Adjusted EBITDA | $ | 363 | $ | 1,126 |
Contact:Dexter Newman – Chief Financial Officer 952-294-1300