DAVE Dave Inc

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:

• Early Debt Repayment

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.

• Stock-Based Compensation

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.