Famous Dave's of America, Inc. (NASDAQ: DAVE) today reported
revenue of $33.3 million and net income of $1.2 million, or $0.13
per diluted share, for its fiscal third quarter ended September 27,
2009. Total revenue for the quarter decreased 5.1 percent from the
comparable period in 2008. For the nine months ended September 27,
2009, the company reported revenue of $103.4 million and net income
of $4.9 million, or $0.54 per diluted share.
Same store sales for company-owned restaurants open for 24
months or more declined 6.8 percent during the quarter, reflecting
declines in dine-in, To-Go and catering, while same store sales for
its franchise-operated restaurants declined 9.5 percent. Franchise
royalty revenue for the quarter totaled $4.2 million, a decrease of
2.8 percent from the comparable period in 2008. Same store sales
for company-owned restaurants declined 7.3 percent on a
year-to-date basis, while same store sales for franchise-operated
restaurants declined 8.8 percent. Franchise royalty revenue for the
year-to-date timeframe totaled $12.9 million.
“The sales environment for the entire casual dining sector
remains challenging, but I remain excited about the energy we’ve
created with our marketing efforts,” said Christopher O’Donnell,
chief executive officer of Famous Dave’s. “We’ve continued to make
progress in our efforts to control costs and have worked hard to
strengthen our balance sheet.”
Sales results for the third quarter for company-owned
restaurants reflect general declines in consumer spending slightly
offset by the impact of weighted average price increases of
approximately 2.0 percent, which were taken prior to 2009.
The company’s 2009 third quarter also reflected the
following:
During the third quarter of fiscal 2009, the company repaid $2.6
million in long-term high fixed-rate debt. As previously announced,
on October 1, 2009, the company has since repaid the last of five
outstanding term notes, bringing the amount of debt the company has
repaid to date in 2009 to approximately $10.0 million. The total
pay down of long-term debt in fiscal 2009 should result in
approximately $610,000 of scheduled interest savings for fiscal
2010. The company continues to maintain its revolving line of
credit, which had a balance of $14.0 million at the end of the
third quarter.
- Impairment and Lease
Termination Charges
During the quarter, asset impairment and lease termination
charges totaled $446,000. Included in this total are charges
related to a final agreement to buy out the lease of a previously
closed restaurant, a lease termination settlement for a restaurant
site where construction never commenced, and a software product
that was replaced with an alternative solution prior to
implementation.
Earnings results for the third quarter of 2009 included
approximately $236,000, or $0.02 per diluted share, in compensation
expense related to the company’s stock-based incentive programs, as
compared to approximately $100,000, or $0.01 per diluted share, for
the prior year comparable period. Stock-based compensation expense
for the nine months ended September 27, 2009 was approximately
$610,000, or $0.04 per diluted share, compared to approximately
$698,000 or $0.05 per diluted share for the prior year comparable
period.
Marketing and
Development
Marketing and Development highlights during the quarter included
a 15 year anniversary celebration featuring the return of the
“Buck-A-Bone” promotion, $1.15 draft beers and a special “Dave’s
Day” event. This fall, the company’s Limited Time Offer is a
“Smokin’ hot meatloaf and potatoes” entrée and a 12 ounce smoked
rib-eye steak with Dave’s special barbeque butter, roasted baby red
potatoes with baby bella mushrooms and a choice of side dish. This
promotion is available through November.
“We’ve responded to the current business climate with promotions
geared towards driving traffic through a balance of value-oriented
and premium items, as well as promotions that enhance our already
strong brand,” O’Donnell said. “Our 15-year anniversary celebration
was an example of this, which included our ‘Dave’s Day’
celebration, an event that we could ‘own’ and that drove traffic
and delivered sales that rivaled our largest day, Fathers Day.”
During the third quarter of fiscal 2009, two franchise-operated
restaurants opened in Thousand Oaks, California and Amarillo, Texas
and one franchise-operated restaurant closed in Omaha, Nebraska.
Famous Dave's ended the quarter with 177 restaurants, including 46
company-owned restaurants and 131 franchise-operated restaurants,
located in 38 states.
Outlook
Subsequent to quarter-end, three franchise-operated restaurants
opened in Lake Delton, Wisconsin, Ft. Collins, Colorado, and
Topeka, Kansas, bringing the total number of franchise-operated
restaurant openings in 2009 to 13. Additionally, the company closed
a company-owned restaurant in Naperville, Illinois at the end of
its lease term and a franchise-operated restaurant closed in
Augusta, Georgia. The company expects to open a minimum of 8
franchise-operated units in 2010. Company-owned unit growth for
2010 is still being evaluated.
The company has taken no price increases to date in 2009, but
expects to take a 1.0% price increase in December 2009.
Conference Call
The company will host a conference call tomorrow, October 29,
2009, 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 45
locations and franchises 133 additional units in 37 states. Its
menu features award-winning barbequed and grilled meats, an ample
selection of salads, side items and sandwiches, and unique
desserts.
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
September 27, September 28, September
27, September 28, 2009 2008
2009 2008 Revenue: Restaurant sales, net $
28,763 $ 30,407 $ 89,600 $ 93,219 Franchise royalty revenue 4,242
4,366 12,851 13,194 Franchise fee revenue 80 110 155 457 Licensing
and other revenue 220 205 811
707
Total revenue 33,305
35,088 103,417 107,577
Costs and expenses: Food and beverage costs 8,762
9,523 27,046 28,754 Labor and benefits costs 9,174 9,816 27,857
28,726 Operating expenses 7,760 7,497 23,492 24,162 Depreciation
and amortization 1,253 1,397 3,834 4,126 Asset impairment and
estimated lease termination and other closing costs 446 3,879 119
3,879
General and administrative
Expenses
3,701 3,337 11,976 12,370 Pre-opening expenses --- 333 --- 636 Net
loss on disposal of property 7 10
13 16
Total costs and expenses
31,103 35,792 94,337
102,669
Income (loss) from operations
2,202 (704 ) 9,080 4,908
Other expense: Loss on early extinguishment of
debt (40 ) --- (489 ) --- Interest expense (277 ) (504 ) (1,177 )
(1,478 ) Interest income 26 73 93 172 Other income (expense), net
7 (3 ) (1 ) (33 )
Total other
expense (284 ) (434 ) (1,574 )
(1,339 )
Income (loss) before income
taxes
1,918
(1,138
)
7,506
3,569
Income tax (expense) benefit (679 ) 375
(2,579 ) (1,225 )
Net income
(loss) $ 1,239 $ (763 ) $ 4,927 $ 2,344
Basic net income (loss) per
common share
$ 0.14 $ (0.08 ) $ 0.54 $ 0.25
Diluted net income (loss) per
common share
$ 0.13 $ (0.08 ) $ 0.54 $ 0.24
Weighted average common shares
outstanding – basic
9,124,000 9,304,000 9,104,000
9,516,000
Weighted average common shares
outstanding – diluted 9,254,000 9,304,000
9,184,000 9,671,000
FAMOUS DAVE’S OF AMERICA, INC. AND SUBSIDIARIES OPERATING
RESULTS (unaudited) Three Months
Ended Nine Months Ended September 27,
September 28, September 27, September
28, 2009 2008 2009 2008 Food and
beverage costs (1) 30.5 % 31.3 % 30.2 % 30.8 % Labor and benefits
costs (1) 31.9 % 32.3 % 31.1 % 30.8 % Operating expenses (1) 27.0 %
24.7 % 26.2 % 25.9 % Depreciation & amortization
(restaurant level) (1)
3.9 % 4.2 % 3.8 % 4.0 % Depreciation & amortization
(corporate level) (2)
0.4 % 0.4 % 0.4 % 0.3 % Asset impairment and lease termination
and other closing costs (1)
1.6 % 12.8 % 0.1 % 4.2 % General and administrative expenses (2)
11.1 % 9.5 % 11.6 % 11.5 % Pre-opening expenses and net
loss on disposal of property
(1)
0.0 % 1.1 % 0.0 % 0.7 % Total costs and expenses (2) 93.4 %
102.0 % 91.2 % 95.4 % Income (loss) from operations (2) 6.6 % (2.0
%) 8.8 % 4.6 %
(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) September 27, December
28, 2009 2008 ASSETS Cash and cash
equivalents $ 1,629 $ 1,687 Other current assets 10,801 11,604
Property, equipment and leasehold improvements, net 55,047 58,129
Other assets 1,878 1,981
Total assets $ 69,355
$ 73,401
LIABILITIES AND SHAREHOLDERS’ EQUITY Line of
credit $ 13,000 $ 18,000 Other current liabilities 14,107 12,060
Long-term obligations 10,436 17,157 Shareholders’ equity
31,812 26,184
Total liabilities and shareholders’
equity $ 69,355 $ 73,401
FAMOUS DAVE’S OF AMERICA,
INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (unaudited) (in thousands)
Nine Months Ended September 27, September
28, 2009 2008 Cash flows provided by
operating activities $ 11,684 $ 10,352 Cash flows used for
investing activities (1,039 ) (8,046 ) Cash flows used for
financing activities (10,703 ) (2,353 ) Decrease in
cash and cash equivalents $ (58 ) $ (47 )
SUPPLEMENTAL
SALES INFORMATION (unaudited) Three
Months Ended Nine Months Ended September
27, September 28, September 27,
September 28, 2009 2008 2009
2008 Total weighted average weekly net sales (AWS):
Company-Owned $ 47,706 $ 49,429 $ 49,427 $ 52,368
Franchise-Operated $ 53,524 $ 58,276 $ 54,870 $ 58,449 AWS
2005 and Post 2005: (1) Company-Owned $ 55,340 $ 62,578 $ 58,909 $
67,918 Franchise-Operated $ 57,683 $ 64,600 $ 60,201 $ 65,691
AWS Pre 2005: (1) Company-Owned $ 45,011 $ 46,295 $ 46,112 $
48,608 Franchise-Operated $ 47,472 $ 50,355 $ 47,326 $ 49,834
Operating Weeks: Company-Owned 598 608 1,807 1,772
Franchise-Operated 1,684 1,597 4,934 4,723 Total number of
restaurants: Company-Owned 46 47 46 47 Franchise-Operated
131 123 131 123
Total 177 170 177 170 Comparable net sales (24 month):
Company-Owned (6.8 %) (4.7 %) (7.3 %) 0.1 % Franchise-Operated (9.5
%) (4.6 %) (8.8 %) (2.8 %) Total number of comparable
restaurants: Company-Owned 38 38 38 35 Franchise-Operated 100 86 92
75
(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.
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