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Famous Dave's Reports Second Quarter Net Income of $0.17 Per Share

August 3, 2005 at 4:24 PM EDT

MINNEAPOLIS, Aug 03, 2005 (BUSINESS WIRE) -- FAMOUS DAVE'S OF AMERICA, INC. (NASDAQ:DAVE) today announced financial results for the second quarter ended July 3, 2005.

Highlights for the second quarter of 2005, relative to the same quarter last year, were as follows:

-- Total revenue of $28.1 million increased 10.5% over the prior year.

-- Comparable sales for company-owned restaurants increased 5.0% over the prior year.

-- Earnings were $0.17 per diluted share.

Commenting on the second quarter performance, David Goronkin, President and Chief Executive Officer, said, "We are very pleased with the results achieved in the second quarter. We remain committed to demonstrating strong, sustainable profitability over time, and this is yet another quarter where our results are reflective of our efforts."

"Our primary focus in the second quarter was on growing the brand and on growing the system," Goronkin continued. "We successfully opened nine new restaurants during the quarter, and year to date we have opened 14 restaurants, bringing our total restaurants to 118. In the process, we have entered into five additional states, with new restaurants in Massachusetts, New York, Pennsylvania, Texas and Washington State. We are right on track for our restaurant growth expectations for 2005."

Net income for the second quarter ending July 3, 2005 was approximately $1.9 million, or $0.17 per diluted share, on total revenue of approximately $28.1 million. In comparison, for the second quarter of 2004, net income was approximately $996,000 or $0.08 per diluted share, on total revenue of approximately $25.4 million. For the second quarter of 2005, net sales for company-owned restaurants, open year-round for 18 months or more, increased approximately 5.0%, as compared to a decrease of 2.4% for the second quarter of 2004. Total revenues for the second quarter of 2005 increased approximately 10.5% over the 2004 comparable period, reflecting the comparable sales increase as well as strong growth in franchise royalties.

For the six months ended July 3, 2005, the company reported net income of $2.4 million, or $0.21 per diluted share, on total revenue of approximately $51.6 million, compared with net income of $1.5 million, or $0.12 per diluted share, on total revenue of $48.1 million for the first six months of 2004. For the first half of 2005, net sales for company-owned restaurants, open year-round for 18 months or more, increased 3.2% compared with a decline of 2.4% for the first half of 2004.

Goronkin added that the earnings results for the second quarter of 2005 reflected approximately $17,000 for compensation expense related to the company's stock-based incentive programs. The six month period ended July 3, 2005 included compensation expense of approximately $209,000, or $0.01 per diluted share, related to the company's stock-based incentive programs.

In addition to the nine franchise-operated restaurant openings in the second quarter of 2005, the company also entered into area development agreements for 16 new restaurants in Connecticut (other than Fairfield County), central portions of Indiana, Maine, Western Massachusetts, Rhode Island, and Vermont. Famous Dave's ended the quarter with 118 restaurants, including 38 company-owned restaurants and 80 franchise-operated restaurants in 29 states.

During the 2005 second quarter, the company repurchased approximately 592,300 of its common shares at an average price of $11.04 per share, excluding commissions. This completed the one million share program, approved by the board of directors in November 2004, at an average price of $11.93 per share, excluding commissions.

The company is hosting a conference call tomorrow, August 4, 2005, at 10:00 a.m. Central Time to discuss its second quarter 2005 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 7636603. 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 August 3, 2005, the company owned 38 locations and franchised 79 additional units in 29 states and had signed development agreements for an additional 179 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 - Vice President and 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 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
               ($'s in thousands, except per share data)
                              (unaudited)


                         Three Months Ended       Six Months Ended
                       ----------------------- -----------------------
                         July 3,    June 27,     July 3,    June 27,
                          2005        2004        2005        2004
                       ----------- ----------- ----------- -----------
Revenue:
 Restaurant sales, net    $24,468     $23,033     $45,211     $43,606
 Franchise royalty
  revenue                   2,769       1,755       4,912       3,339
 Franchise fee revenue        380         530         775         968
 Licensing and other
  revenue                     449          86         664         138
                       ----------- ----------- ----------- -----------
Total revenue              28,066      25,404      51,562      48,051
                       ----------- ----------- ----------- -----------

Costs and expenses:
 Food and beverage
  costs                     7,510       7,303      13,859      13,710
 Labor and benefits         6,792       6,479      13,085      12,815
 Operating expenses         5,859       5,830      10,925      10,834
 Total depreciation and
  amortization              1,091       1,096       2,214       2,214
 General and
  administrative            3,470       2,584       6,843       5,082
                       ----------- ----------- ----------- -----------
Total costs and
 expenses                  24,722      23,292      46,926      44,655
                       ----------- ----------- ----------- -----------

Income from operations      3,344       2,112       4,636       3,396
                       ----------- ----------- ----------- -----------

Other income (expense):
 Interest expense            (376)       (468)       (856)       (949)
 Interest income               57          79         151         154
 Other income
  (expense), net               44         (97)         (3)       (108)
                       ----------- ----------- ----------- -----------
Total other expense          (275)       (486)       (708)       (903)
                       ----------- ----------- ----------- -----------

Income before income
 taxes                      3,069       1,626       3,928       2,493

Income tax expense         (1,164)       (630)     (1,490)       (970)
                       ----------- ----------- ----------- -----------

Net income                 $1,905        $996      $2,438      $1,523
                       =========== =========== =========== ===========

Basic net income per
 common share               $0.18       $0.08       $0.22       $0.12
                       =========== =========== =========== ===========
Diluted net income per
 common share               $0.17       $0.08       $0.21       $0.12
                       =========== =========== =========== ===========

Weighted average common
 shares outstanding -
 basic                 10,831,000  12,234,000  11,080,000  12,257,000
                       =========== =========== =========== ===========
Weighted average common
 shares outstanding -
 diluted               11,163,000  12,582,000  11,444,000  12,598,000
                       =========== =========== =========== ===========



            FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
      RESTAURANT OPERATING RESULTS AS A % OF NET RESTAURANT SALES
                              (unaudited)
                                  ------------------------------------
                                  Three Months Ended Six Months Ended
                                  ------------------ -----------------
                                   July 3,  June 27,  July 3, June 27,
                                    2005      2004     2005     2004
                                  --------- -------- -------- --------
Food and beverage costs               30.7%    31.7%    30.7%    31.4%
Labor and benefits                    27.8%    28.1%    28.9%    29.4%
Operating expenses                    23.9%    25.3%    24.2%    24.9%
Depreciation & amortization
 (restaurant level)                    4.0%     4.4%     4.4%     4.7%
                                  --------- -------- -------- --------
 Total costs and expenses             86.4%    89.5%    88.2%    90.4%
 Income from restaurant operations    13.6%    10.5%    11.8%     9.6%



            FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
                      CONSOLIDATED BALANCE SHEETS
                   JULY 3, 2005 AND JANUARY 2, 2005
                              (unaudited)
                                                ----------------------
(in thousands)                                    July 3,   January 2,
                                                   2005        2005
                                                ----------- ----------
ASSETS
 Current assets                                    $11,240    $19,768
 Property, equipment and leasehold improvements,
  net                                               44,088     44,664
 Other assets                                        7,411      7,481
                                                ----------- ----------
 Total assets                                      $62,739    $71,913
                                                =========== ==========

LIABILITIES AND SHAREHOLDERS' EQUITY
 Current liabilities                                $8,460     $9,011
 Long-term obligations                              19,553     19,559
 Shareholders' equity                               34,726     43,343
                                                ----------- ----------
 Total liabilities and shareholders' equity        $62,739    $71,913
                                                =========== ==========


                    SUPPLEMENTAL SALES INFORMATION
                              (unaudited)
                                  ------------------------------------
                                  Three Months Ended Six Months Ended
                                  ------------------ -----------------
                                   July 3,  June 27,  July 3, June 27,
                                    2005      2004     2005     2004
                                  --------- -------- -------- --------
Weighted average weekly net sales:
  Company-Owned                    $49,338  $46,437  $45,649  $44,041
  Franchise-Operated               $59,744  $53,391  $56,014  $51,550
Comparable net sales:
  Company-Owned                        5.0%   (2.4)%     3.2%   (2.4)%
  Franchise-Operated                   0.7%   (2.8)%    (0.6)%  (2.7)%
Total number of restaurants:
  Company-Owned                         38       38       38       38
  Franchise-Operated                    80       57       80       57
                                  --------- -------- -------- --------
      Total                            118       95      118       95

SOURCE: Famous Dave's of America, Inc.

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