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Famous Dave's Reports First Quarter Net Income of $0.07 Per Share

April 26, 2006 at 4:08 PM EDT

MINNEAPOLIS--(BUSINESS WIRE)--April 26, 2006--FAMOUS DAVE'S OF AMERICA, INC. (NASDAQ:DAVE) today announced financial results for the first quarter ended April 2, 2006.

    Highlights for the first quarter of 2006 were as follows:

    --  Total revenue of $27.1 million increased 15.3% over the prior
        year.

    --  Comparable sales for company-owned restaurants increased 5.6%
        over the prior year.

    --  Franchise royalty revenue of $3.1 million increased 46.5% over
        the prior year.

    --  Earnings were $0.07 per diluted share, including $0.02 of
        after-tax expense related to stock-based compensation.

Net income for the first quarter ended April 2, 2006 was approximately $742,000, or $0.07 per diluted share, on total revenue of approximately $27.1 million. In comparison, for the first quarter of 2005, net income was approximately $533,000 or $0.05 per diluted share, on total revenue of approximately $23.5 million. Total revenue for the first quarter of 2006 increased 15.3% over the 2005 comparable period, reflecting an 11.9% increase in net restaurant sales and a 46.5% increase in franchise royalties. For the first quarter of 2006, net sales for company-owned restaurants, open year-round for 18 months or more, increased 5.6%, as compared to an increase of 1.1% for the first quarter of 2005. Contributing factors to this increase in comparable sales year over year include the shift of Easter from the 1st quarter of 2005 to the 2nd quarter of 2006, weighted average price increases of approximately 1.5%, and increased advertising in the first quarter of 2006 compared to 2005.

"The strategic path that we set out on two years ago has us moving in the right direction, and that is demonstrated by our first quarter results," said David Goronkin, President and Chief Executive Officer of Famous Dave's. "During the quarter, we opened our first two California restaurants and opened our first new company-owned restaurant in three years. We are leveraging the groundwork that we've laid, executing our plans, and continue to take a long-term approach to Famous Dave's success."

Goronkin added that the earnings results for the first quarter of 2006 included approximately $371,000, or $0.02 per diluted share, in compensation expense related to the company's stock-based incentive programs (including approximately $152,000 or $0.01 per diluted share of stock option expense as a result of the implementation of SFAS No. 123R in the first quarter of 2006), as compared to approximately $206,000, or $0.01 per diluted share, for the prior year comparable period.

During the first quarter of 2006, Famous Dave's opened six franchise-operated restaurants, and one company-owned restaurant. The company also entered into an area development agreement for seven new restaurants in Orange County, California. Famous Dave's ended the quarter with 131 restaurants, including 40 company-owned restaurants and 91 franchise-operated restaurants in 33 states, and had signed area development agreements for an additional 197 franchised locations.

The company is hosting a conference call tomorrow, April 27, 2006, at 10:00 a.m. Central Time to discuss its first quarter 2006 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, conference ID 7258328. A replay will be available for one week following the call by dialing 800-642-1687, conference ID 7258328. 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.

About Famous Dave's. Famous Dave's of America, Inc. (NASDAQ:DAVE) develops, owns, operates and franchises barbeque restaurants. As of April 26, 2006, the company owned 40 locations and franchised 92 additional units in 33 states and had signed development agreements for an additional 196 franchised locations. Its menu features award-winning barbequed and grilled meats, an ample selection of salads, side items and sandwiches, and unique desserts. For more information, contact Diana G. Purcel - Chief Financial Officer, at (952) 294-1300.

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 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 SEC reports.


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

                                                Three Months Ended
                                             -------------------------
                                               April 2,     April 3,
                                                 2006         2005
                                             ------------ ------------
Revenue:
 Restaurant sales, net                       $    23,216  $    20,743
 Franchise royalty revenue                         3,140        2,143
 Franchise fee revenue                               562          395
 Licensing and other revenue                         170          215
                                             ------------ ------------
Total revenue                                     27,088       23,496
                                             ------------ ------------

Costs and expenses:
 Food and beverage costs                           7,005        6,349
 Labor and benefits                                7,187        6,293
 Operating expenses                                6,032        5,066
 Depreciation and amortization                     1,127        1,123
 General and administrative                        4,007        3,373
 Pre-opening expenses                                140          ---
 Loss on disposal                                      9            4
                                             ------------ ------------
Total costs and expenses                          25,507       22,208
                                             ------------ ------------

Income from operations                             1,581        1,288
                                             ------------ ------------

Other income (expense):
 Interest expense                                   (471)        (480)
 Interest income                                     105           94
 Other expense, net                                  (38)         (43)
                                             ------------ ------------
Total other expense                                 (404)        (429)
                                             ------------ ------------

Income before income taxes                         1,177          859

Income tax expense                                   435          326
                                             ------------ ------------

Net income                                   $       742  $       533
                                             ============ ============

Basic and diluted net income per common
 share                                       $      0.07  $      0.05
                                             ============ ============

Weighted average common shares outstanding -
 basic                                        10,606,000   11,329,000
                                             ============ ============

Weighted average common shares outstanding -
 diluted                                      10,949,000   11,720,000
                                             ============ ============



           FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
                          OPERATING RESULTS
                             (unaudited)
                                                    ------------------
                                                    Three Months Ended
                                                    ------------------
                                                    April 2,  April 3,
                                                      2006      2005
                                                    --------- --------
Food and beverage costs (1)                             30.2%    30.6%
Labor and benefits (1)                                  31.0%    30.3%
Operating expenses (1)                                  26.0%    24.4%
Depreciation & amortization (restaurant level) (1)       4.4%     5.0%
Depreciation & amortization (corporate level) (2)        0.4%     0.4%
General and Administrative (2)                          14.8%    14.4%
Pre-opening expenses & loss on disposal (1)              0.6%     ---

  Total costs and expenses (2)                          94.2%    94.5%
  Income from operations (2)                             5.8%     5.5%

--------------------------------------------
(1) As a percentage of restaurant sales, net

(2) As a percentage of total revenue


           FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED BALANCE SHEETS
                            (in thousands)
                             (unaudited)
                                               -----------------------
                                                April 2,    January 1,
                                                  2006         2006
                                               -----------  ----------
ASSETS
 Current assets                                $   16,877   $  15,494
 Property, equipment and leasehold
  improvements, net                                48,217      46,872
 Other assets                                       5,188       5,232
                                               -----------  ----------
 Total assets                                  $   70,282   $  67,598
                                               ===========  ==========

LIABILITIES AND SHAREHOLDERS' EQUITY
 Current liabilities                           $   11,370   $   9,862
 Long-term obligations                             19,872      19,848
 Shareholders' equity                              39,040      37,888
                                               -----------  ----------
 Total liabilities and shareholders' equity    $   70,282   $  67,598
                                               ===========  ==========


                    SUPPLEMENTAL SALES INFORMATION
                             (unaudited)
                                                    ------------------
                                                    Three Months Ended
                                                    ------------------
                                                    April 2,  April 3,
                                                      2006      2005
                                                    --------- --------
Weighted average weekly net sales:
  Company-Owned                                     $ 44,953  $41,960
  Franchise-Operated                                $ 57,781  $51,929
Comparable net sales:
  Company-Owned                                         5.6 %     1.1%
  Franchise-Operated                                   (1.6)%   (1.9)%
Total number of restaurants:
  Company-Owned                                           40       38
  Franchise-Operated                                      91       71
                                                    --------- --------
      Total                                              131      109

    CONTACT: Famous Dave's of America, Inc., Minneapolis
             Diana G. Purcel, 952-294-1300

    SOURCE: Famous Dave's of America, Inc.