Investor Relations

News Release

« Back

Famous Dave's Reports 2004 Net Income of $3.5 Million, $0.29 Per Share; Fourth Quarter Net Income Totals $0.06 Per Share

March 2, 2005 at 4:16 PM EST

MINNEAPOLIS--(BUSINESS WIRE)--March 2, 2005--Famous Dave's of America, Inc. (Nasdaq:DAVE) today reported net income of $705,000, or $0.06 per diluted share, on total revenue of $25.3 million for the fourth quarter ended January 2, 2005. In the prior year comparable period, the company reported a net loss of $777,000, or $0.06 per diluted share, on total revenue of $22.8 million. Results for the 2003 period included pre-tax impairment and restructuring charges of approximately $764,000, or $0.04 per diluted share, related to underperforming restaurants. For the 2004 fourth quarter, net sales for restaurants open year-round for 18 months or more increased approximately 4.0% compared with a 4.0% decline in the 2003 fourth quarter.

For the fiscal year ended January 2, 2005, Famous Dave's reported net income of $3.5 million, or $0.29 per diluted share, on total revenue of $99.3 million. Fiscal 2004 was a 53-week period. In comparison, in fiscal 2003, the company reported a net loss of $2.9 million, or $0.25 per diluted share, on total revenue of $97.7 million. Results for fiscal 2003 included pre-tax charges of approximately $6.4 million, or $0.34 per diluted share, related to losses in the Isaac Hayes Blues Clubs, costs associated with the divestiture of those clubs, and impairment charges on under-performing restaurants. For the year ended January 2, 2005, net sales for restaurants open year-round for 18 months or more increased 1.1% (calculated on a 52-week basis) compared with a 3.0% decline in 2003.

David Goronkin, President and Chief Executive Officer, attributed the return to comparable store sales growth in 2004 to a sharp focus on operational excellence, in addition to the company's use of limited-time offerings, a new advertising campaign supported by television in core markets, and a modest price increase implemented in the second half of the year. "We're pleased with our improved financial performance in 2004," said Goronkin. "Our 2004 results reflect the focus of our entire organization on our three main priorities; continuously improving operating integrity, brand development and improved financial performance."

Total revenue for 2004 benefited from strong growth in franchise royalties and franchise fees. Franchise royalties increased 61%, as the company realized full-year contributions from franchise-operated restaurants opened in 2003. The 74% increase in franchise fees reflects the addition of a net 12 new franchise restaurants in 2004, in addition to new development agreements that were signed during the year. Growth in franchise royalties, franchise fees and licensing and other revenue more than offset a decline in 2004 restaurant sales resulting from the sale of three and the closing of two company-owned restaurants in 2003.

Net income in 2004 benefited from lower labor and benefits costs, lower operating expenses and the previously mentioned menu price increase, all of which helped offset the impact of higher commodity costs. "During 2005, we anticipate continued commodity price pressure on our core proteins," said Goronkin, "but we believe we can mitigate the impact by utilizing higher margin limited time offerings and through continued emphasis on building our adult beverage sales."

Goronkin continued, "We are on our way to becoming the category-defining brand in barbeque. We enter 2005 with positive momentum, with a continued focus on the fundamentals, thus positioning us for further profitable growth."

Famous Dave's opened three franchise-operated restaurants during the fourth quarter, and ended the year with a system-wide total of 104 restaurants, including 38 company-owned restaurants and 66 franchise-operated restaurants, in 24 states. During 2005, Famous Dave's anticipates opening 25-30 franchise-operated restaurants, and up to two company-owned restaurants, and had commitments to build an additional 159 franchise-operated restaurants in place as of January 2, 2005.

The company is hosting a conference call tomorrow, March 3, 2005, at 10:00 am CT to discuss its fourth quarter 2004 financial results, and invites all those interested in hearing management's discussion of the quarter to join the conference call by dialing (800) 374-1553. A replay will be available for one week following the call by dialing (800) 642-1687, conference ID 3340206. Participants may also access a live webcast of the discussion through the Investor Relations section of Famous Dave's web site at www.famousdaves.com.

Famous Dave's of America, Inc. (NASDAQ:DAVE) develops, owns, operates and franchises barbeque restaurants. As of March 2, 2005, the company owned 38 locations and franchised 70 additional units in 24 states, and had signed development agreements for an additional 155 franchise locations. Its menu features award-winning barbequed and grilled meats, an ample selection of salads, side items, sandwiches and unique desserts.

Statements in this press release that are not strictly historical, including but not limited to statements regarding the timing of our restaurant openings and the timing or success of our expansion 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 Famous Dave's of America, Inc. believes the expectation 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 SEC reports.

            FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF OPERATIONS
                 (in thousands, except per share data)
                              (unaudited)

                         Three Months Ended      Twelve Months Ended
                       ----------------------- -----------------------
                       January 2, December 28, January 2, December 28,
                          2005        2003        2005        2003
                       (14 weeks)  (13 weeks)  (53 weeks)  (52 weeks)
                       ---------- ------------ ---------- ------------
Revenue:
 Restaurant sales, net   $22,120      $20,734    $89,176      $91,500
 Franchise royalty
  revenue                  2,089        1,332      7,353        4,567
 Franchise fee revenue       629          384      1,977        1,139
 Licensing and other
  revenue                    469          372        819          534
                       ---------- ------------ ---------- ------------
Total revenue             25,307       22,822     99,325       97,740
                       ---------- ------------ ---------- ------------

Costs and expenses:
 Food and beverage
  costs                    7,003        6,607     27,995       28,014
 Labor and benefits        6,868        6,571     26,472       27,586
 Operating expenses        5,668        5,885     22,005       23,376
 Total depreciation and
  amortization             1,243        1,156      4,549        4,840
 Asset impairment and
  restructuring charges      ---          764        ---        4,238
 Pre-opening expenses        ---          ---        ---          543
 General and
  administrative           3,138        2,551     10,939        9,336
                       ---------- ------------ ---------- ------------
Total costs and
 expenses                 23,920       23,534     91,960       97,933
                       ---------- ------------ ---------- ------------

Income (loss) from
 operations                1,387         (712)     7,365         (193)
                       ---------- ------------ ---------- ------------

Other income (expense):
 Interest (expense)         (440)        (508)    (1,901)      (1,876)
 Interest income             100           52        326          215
 Other expense, net         (232)         (32)      (392)        (667)
 Equity in loss of
  unconsolidated
  affiliate                  ---          ---        ---       (2,155)
                       ---------- ------------ ---------- ------------
Total other income
 (expense)                  (572)        (488)    (1,967)      (4,483)
                       ---------- ------------ ---------- ------------

Income (loss) before
 income taxes                815       (1,200)     5,398       (4,676)

Income tax (expense)
 benefit                    (110)         423     (1,900)       1,778
                       ---------- ------------ ---------- ------------

Net income (loss)           $705        $(777)    $3,498      $(2,898)
                       ========== ============ ========== ============

Basic and diluted net
 income (loss) per
 common share              $0.06       $(0.06)     $0.29       $(0.25)
                       ========== ============ ========== ============

Weighted average common
 shares outstanding -
 basic                    11,344       12,137     11,858       11,772
                       ========== ============ ========== ============
Weighted average common
 shares outstanding -
 diluted                  11,722       12,137     12,222       11,772
                       ========== ============ ========== ============




            FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
      RESTAURANT OPERATING RESULTS AS A % OF NET RESTAURANT SALES
                              (unaudited)
                       -----------------------------------------------
                         Three Months Ended      Twelve Months Ended
                       ----------------------- -----------------------
                       January 2, December 28, January 2, December 28,
                          2005        2003        2005        2003
                       (14 weeks)  (13 weeks)  (53 weeks)  (52 weeks)
                       ---------- ------------ ---------- ------------
Food and beverage costs     31.7%        31.9%      31.4%        30.6%
Labor and benefits          31.0%        31.7%      29.7%        30.1%
Operating expenses          25.6%        28.3%      24.7%        25.6%
Depreciation &
 amortization                5.1%         5.2%       4.7%         5.0%
Asset impairment and
 restructuring charges       ---          3.7%       ---          4.6%
Pre-Opening expenses         ---          ---        ---          0.6%
                       ---------- ------------ ---------- ------------
 Total costs and
  expenses                  93.4%      100.8 %      90.5%        96.5%
 Income from restaurant
  operations                 6.6%       (0.8)%       9.5%         3.5%




            FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
                      CONSOLIDATED BALANCE SHEETS
                 JANUARY 2, 2005 AND DECEMBER 28, 2003
                            (in thousands)
                              (unaudited)
                                               -----------------------
                                               January 2, December 28,
                                                  2005        2003
                                               ---------- ------------
ASSETS
 Current assets                                  $19,798      $16,350
 Property, equipment and leasehold
  improvements, net                               44,664       47,147
 Other assets                                      7,481       10,270
                                               ---------- ------------
 Total assets                                    $71,943      $73,767
                                               ========== ============

LIABILITIES AND SHAREHOLDERS' EQUITY
 Current liabilities                              $9,041       $7,309
 Long-term obligations                            19,559       19,586
 Shareholders' equity                             43,343       46,872
                                               ---------- ------------
 Total liabilities and shareholders' equity      $71,943      $73,767
                                               ========== ============



                    SUPPLEMENTAL SALES INFORMATION
                             (unaudited)
                      ------------------------------------------------
                        Three Months Ended      Twelve Months Ended
                      ----------------------- ------------------------
                      January 2, December 28, January 2,  December 28,
                         2005        2003        2005         2003
                      (14 weeks)  (13 weeks)  (53 weeks)   (52 weeks)
                      ---------- ------------ ----------- ------------
Weighted average
 weekly net sales:
  Company-Owned         $41,595      $39,121     $44,164      $42,491
  Franchise-Owned       $49,949      $45,744     $51,538      $47,400
Comparable net sales:
  Company-Owned            4.0 %       (4.0)%       1.1 %       (3.0)%
  Franchise-Owned         (0.9)%       (5.0)%      (1.9)%       (6.3)%
Total number of
 restaurants:
  Company-Owned              38           38          38           38
  Franchise-Owned            66           54          66           54
                      ---------- ------------ ----------- ------------
      Total                 104           92         104           92

    CONTACT: Famous Dave's of America, Inc., Minneapolis
             Diana G. Purcel, 952-294-1300
             diana.purcel@famousdaves.com

    SOURCE: Famous Dave's of America, Inc.