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Famous Dave's Reports Third Quarter Earnings of $0.17 Per Share

October 27, 2010 at 4:57 PM EDT

MINNEAPOLIS, Oct 27, 2010 (GlobeNewswire via COMTEX) --

Famous Dave's of America, Inc. (Nasdaq:DAVE) today announced revenue and net income of $38.7 million and $1.5 million, respectively, or $0.17 per diluted share, for the third quarter ended October 3, 2010. This compares to revenue and net income of $33.3 million and $1.2 million, respectively, or $0.13 per diluted share for the comparable period in 2009. For the nine months ended October 3, 2010, the Company had revenue and net income of $112.1 million and $6.7 million, respectively, or $0.76 per diluted share. For the 2009 comparable period, the Company had revenue and net income of $103.4 million and $4.9 million, respectively, or $0.54 per diluted share.

"During the third quarter, a number of strong promotions, combined with continued discipline on cost control, produced improved same store sales and financial results," said Christopher O'Donnell, president and CEO of Famous Dave's. "We experienced year-over-year improvement in all sales levers of our business, including dine-in, catering and to-go."

Same store sales for company-owned restaurants open for 24 months or more increased 2.4 percent during the quarter, an improvement over a negative 6.8 percent for the third quarter of 2009. The comparable sales increase included a weighted average price increase of approximately 1.0 percent. Comparable sales for company-owned restaurants decreased 0.3 percent on a year-to-date basis, compared to a decrease of 7.3 percent for the comparable period in 2009.

Franchise royalty revenue for the third quarter of 2010 totaled $4.0 million, a decrease of 5.4 percent from the comparable period in 2009. The decrease in royalty revenue primarily reflects the impact of lost royalties from eight New York and New Jersey locations, seven of which were purchased by the company in March of this year, partially offset by an increase in comparable sales of 0.7 percent. Franchise royalty revenue on a year-to-date basis totaled $12.2 million, with the year over year decrease of 5.0 percent again reflecting the impact of lost royalties from the New York and New Jersey restaurants acquisition, as well as a decrease of approximately 0.8 percent in comparable sales.

Stock-based and Board of Directors Cash Compensation and Common Share Repurchase

Earnings results for the third quarter of 2010 included approximately $325,000 or $0.02 per diluted share, in compensation expense related to the company's stock-based incentive programs and board of directors' cash compensation, as compared to approximately $236,000 or $0.02 per diluted share, for the prior year comparable period. The increase in stock-based compensation is primarily due to an increase in the Company's stock price over the prior year. Stock-based compensation expense and board of directors' cash compensation expense for the nine months ended October 3, 2010 was approximately $1.0 million or $0.08 per diluted share, compared to approximately $610,000 or $0.04 per diluted share for the prior year comparable period.

During the fiscal 2010 third quarter, the company completed its share buyback authorization, and repurchased 239,040 shares of common stock, at an average price of $8.42 per share, excluding commissions, for a total of approximately $2.0 million. The company repurchased approximately 893,000 shares of common stock during the year-to-date period of 2010 at an average price of $7.76 per share, excluding commissions, for a total of $6.9 million.

Marketing and Development

Development and marketing highlights during the quarter included a successful "limited time offer" of "Wing Wars" -- an offering of both bone-in and boneless wings featuring two new hot sauces - Pineapple Rage(TM) and Wilbur's Revenge(TM). Also during the quarter, we had a second successful "Dave's Day" which included increased participation from our franchise system. The current limited time offering, "Ribzilla," consists of a beef short rib prepared as an entree or sandwich and also features a bleu cheese wedge salad and cherry cobbler. Included in this offering is a special beer pairing with Samuel Adams(R) Seasonals.

"In early August, we resumed our company-owned growth with the Bel Air restaurant opening," O'Donnell said. "This was a very successful opening where we achieved the highest opening week of sales in our history and further expanded our footprint on the East Coast."

In addition, during the third quarter, Famous Dave's opened one new franchise-operated restaurant in San Jose, CA. Famous Dave's ended the quarter with 179 restaurants, including 53 company-owned restaurants and 126 franchise-operated restaurants, located in 36 states. Subsequent to the quarter end, the company opened a franchise-operated restaurant in Peoria, IL to bring the total current count of restaurants to 180.

Outlook

The company has opened one company-owned location and five franchise-operated locations to date and anticipates opening approximately three to four additional franchise-operated restaurants during the fourth quarter.

Conference Call

The company will host a conference call tomorrow, October 28, 2010, at 10:00 a.m. Central Time to discuss its third quarter financial results. There will be 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. develops, owns, operates and franchises barbeque restaurants. As of today, the company owns 53 locations and franchises 127 additional units in 36 states. Its menu features award-winning barbequed and grilled meats, an ample selection of salads, side items and sandwiches, and unique desserts.

The Famous Dave's of America, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7726


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


                                   Three Months Ended       Nine Months Ended
                                  ---------------------  ----------------------

                                   October    September               September
                                     3,         27,       October 3,     27,
                                     2010        2009        2010        2009
                                  ---------  ----------  -----------  ---------
  Revenue:
   Restaurant sales, net           $ 34,313    $ 28,763   $   98,919   $ 89,600
   Franchise royalty revenue          4,012       4,242       12,208     12,851
   Franchise fee revenue                145          80          235        155

   Licensing and other revenue          233         220          689        811
                                  ---------  ----------  -----------  ---------

     Total revenue                   38,703      33,305      112,051    103,417
                                  ---------  ----------  -----------  ---------

  Costs and expenses:
   Food and beverage costs           10,177       8,762       29,121     27,046
   Labor and benefits costs          10,944       9,174       31,217     27,857
   Operating expenses                 9,475       7,760       26,719     23,492
   Depreciation and amortization      1,401       1,253        4,070      3,834
   General and administrative
    expenses                          4,027       3,701       11,753     11,976
   Asset impairment and
    estimated lease termination
    and other closing costs               4         446         (68)        119
   Pre-opening expenses                 219          --          300         --
   Gain on acquisition, net of
    acquisition costs                    --          --      (2,036)         --
   Net loss on disposal of
    property                             12           7           20         13
                                  ---------  ----------  -----------  ---------

     Total costs and expenses        36,259      31,103      101,096     94,337
                                  ---------  ----------  -----------  ---------


  Income from operations              2,444       2,202       10,955      9,080
                                  ---------  ----------  -----------  ---------

  Other expense:
   Loss on early extinguishment
    of debt                              --        (40)           --      (489)
   Interest expense                   (238)       (277)        (800)    (1,177)
   Interest income                       19          26           78         93

   Other (expense) income, net          (8)           7         (12)        (1)
                                  ---------  ----------  -----------  ---------
     Total other expense              (227)       (284)                 (1,574)

  Income before income taxes          2,217       1,918       10,221      7,506


  Income tax expense                  (759)       (679)      (3,520)    (2,579)
                                  ---------  ----------  -----------  ---------


  Net income                        $ 1,458     $ 1,239      $ 6,701  $   4,927
                                  =========  ==========  ===========  =========

  Basic net income per common
   share                             $ 0.17  $     0.14      $  0.77   $   0.54
                                  =========  ==========  ===========  =========
  Diluted net income per common
   share                             $ 0.17  $     0.13      $  0.76   $   0.54
                                  =========  ==========  ===========  =========
  Weighted average common shares
   outstanding -- basic           8,498,000   9,124,000    8,715,000  9,104,000
                                  =========  ==========  ===========  =========
  Weighted average common shares
   outstanding -- diluted         8,631,000   9,254,000    8,870,000  9,184,000
                                  =========  ==========  ===========  =========



                   FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
                                  OPERATING RESULTS
                                     (unaudited)


                                             Three Months Ended   Nine Months Ended
                                             ------------------  ------------------

                                             October  September  October  September
                                                3,       27,        3,       27,
                                              2010       2009     2010       2009
                                             -------  ---------  -------  ---------
  Food and beverage costs (1)                  29.7%      30.5%    29.4%      30.2%
  Labor and benefits (1)                       31.9%      31.9%    31.6%      31.1%
  Operating expenses (1)                       27.6%      27.0%    27.0%      26.2%
  Depreciation & amortization (restaurant
   level) (1)                                   3.7%       3.9%     3.7%       3.8%
  Depreciation & amortization (corporate
   level) (2)                                   0.4%       0.4%     0.4%       0.4%
  General and administrative (2)               10.4%      11.1%    10.5%      11.6%
  Asset impairment and estimated lease
   termination and other closing costs (1)        --       1.6%   (0.1%)       0.1%
  Pre-opening expenses and net loss on
   disposal of property (1)                     0.6%         --     0.3%         --
  Gain on acquisition, net of acquisition
   costs(1)                                       --         --   (2.1%)         --

     Total costs and expenses (2)              93.7%      93.4%    90.2%      91.2%
     Income from operations (2)                 6.3%       6.6%     9.8%       8.8%


  -----------------------------------------
       (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)


                              October   January
                                3,        3,
                               2010      2010
                             --------  --------
  ASSETS
   Cash and cash
    equivalents               $ 1,712   $ 2,996
   Other current assets         9,495     9,486
   Property, equipment and
    leasehold improvements,
    net                        61,851    54,818

   Other assets                 3,387     1,081
                             --------  --------

   Total assets              $ 76,445  $ 68,381
                             ========  ========

  LIABILITIES AND
   SHAREHOLDERS' EQUITY
   Current liabilities       $ 12,498  $ 12,464
   Line of credit              13,600    13,500
   Other long-term
    obligations                16,462     9,423

   Shareholders' equity        33,885    32,994
                             --------  --------
   Total liabilities and
    shareholders' equity     $ 76,445  $ 68,381
                             ========  ========



            FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (in thousands)
                              (unaudited)


                                                  Nine Months Ended
                                                 --------------------

                                                  October   September
                                                    3,         27,
                                                    2010       2009
                                                 ---------  ---------

  Cash flows provided by operating activities      $ 8,986   $ 11,684
  Cash flows used for investing activities        (10,250)    (1,039)

  Cash flows used for financing activities            (20)   (10,703)
                                                 ---------  ---------

   Decrease in cash and cash equivalents         $ (1,284)     $ (58)
                                                 ---------  ---------



                     SUPPLEMENTAL SALES INFORMATION
                              (unaudited)


                            Three Months Ended    Nine Months Ended
                           --------------------  --------------------

                            October   September   October   September
                              3,        27,         3,         27,
                             2010       2009        2010       2009
                           --------  ----------  ---------  ---------
  Restaurant Sales (in
   thousands)
   Company-Owned           $ 34,313    $ 28,763   $ 98,919   $ 89,600
   Franchised-Operated     $ 85,968  $   90,138  $ 261,245  $ 270,993

  Total number of
   restaurants:
   Company-Owned                 53          46         53         46

   Franchise-Operated           126         131        126        131
                           --------  ----------  ---------  ---------
     Total                      179         177        179        177

  Total weighted average
   weekly net sales
   (AWS):
   Company-Owned           $ 50,106    $ 47,706   $ 49,927   $ 49,427
   Franchise-Operated      $ 53,367    $ 53,524   $ 54,057   $ 54,870

     AWS 2005 and Post
      2005: (1)
       Company-Owned       $ 57,343    $ 55,340   $ 56,946   $ 58,909
       Franchise-Operated  $ 56,740    $ 57,683   $ 58,002   $ 60,201

     AWS Pre 2005: (1)
       Company-Owned       $ 45,791    $ 45,011   $ 46,183   $ 46,112
       Franchise-Operated  $ 47,567    $ 47,472   $ 47,470   $ 47,326

  Operating Weeks:
   Company-Owned                680         598      1,969      1,807
   Franchise-Operated         1,607       1,684      4,826      4,934

  Comparable net sales
   (24 month):
   Company-Owned %             2.4%      (6.8%)     (0.3%)     (7.3%)
   Franchise-Operated %        0.7%      (9.5%)     (0.8%)     (8.8%)

  Total number of
   comparable
   restaurants:
   Company-Owned                 42          38         41         38
   Franchise-Operated           102         100         95         92

  (1) Provides further delineation of AWS for restaurants opened
   during the pre-fiscal 2005, and restaurants opened
   during the post-fiscal 2005, timeframes.

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.

This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: Famous Dave's of America

CONTACT:  Famous Dave's of America
Diana G. Purcel - Chief Financial Officer
952-294-1300