Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - BBQ HOLDINGS, INC. | d8k.htm |
Exhibit 99.1
| Contact: | Diana G. Purcel – Chief Financial Officer | |
| 952-294-1300 |
Famous Dave’s Reports Second Quarter Earnings
of $0.29 per share
MINNEAPOLIS, July 27, 2011 – Famous Dave’s of America, Inc. (NASDAQ: DAVE) today announced revenue and net income of $41.3 million and $2.4 million, respectively, or $0.29 per diluted share, for the second quarter ended July 3, 2011. This compares to revenue and net income of $40.7 million and $2.5 million, respectively, or $0.29 per diluted share, for the comparable period in 2010.
For the first six months of 2011, the Company had revenue and net income of $78.4 million and $3.6 million, respectively, or $0.43 per diluted share. For the 2010 comparable period, the Company had revenue and net income of $73.3 million and $5.2 million, respectively, or $0.58 per diluted share. Year to date results for 2011 include a non-cash impairment charge taken in the first quarter of approximately $148,000 or $0.01 per diluted share, primarily related to non-recoverable assets for a company-owned restaurant that will be relocated within its existing market in early 2013. Year to date results for 2010 included a $0.15 gain from the acquisition of seven New York and New Jersey franchise restaurants in March 2010.
Same store sales for company-owned restaurants open for 24 months or more decreased 1.2 percent during the quarter, compared to an increase of 0.6 percent for the second quarter of 2010. Comparable sales reflected a negative impact equal to approximately 90 basis points primarily from the year over year shift in the Easter holiday, from first quarter 2010 to second quarter 2011, and a one day shift of the 4th of July holiday from second quarter in 2010 to third quarter in 2011. Comparable sales results also included a weighted average price increase of approximately 2.0 percent. Comparable sales for company-owned restaurants increased 0.9% during the first half of 2011, compared to a decrease of 1.4% for the first half of 2010.
“We were pleased with our operational execution, our guest feedback ratings and our new product innovation during the quarter,” said Christopher O’Donnell, Famous Dave’s president and chief executive. “Despite the impact from the shift in the calendar during the second quarter, we remain encouraged that our year to date comparable sales were positive.” O’Donnell continued, “Our operations team did a good job managing food and labor costs during the quarter, particularly in this environment. Additionally, while our off-premise sales results were encouraging, they weren’t enough to offset the weakness in our dine-in business, which still reflects the general softening of consumer confidence.”
Franchise royalty revenue for the second quarter of 2011 totaled $4.4 million, an increase of 4.0% from the comparable period in 2010. The increase reflects the opening of nine new restaurants since the second quarter of 2010, partially offset by the five franchise restaurants that closed during this timeframe, and a decrease in comparable sales of 1.4%. Franchise royalty revenue for the first half of 2011 totaled $8.4 million, an increase of 2.6% compared to 2010, reflecting the new openings since the second quarter of 2010, partially offset by the loss of royalties for the two months prior to acquisition for the New York/New Jersey restaurants, and a comparable sales decrease of 0.7% for the first half of 2011.
Stock-based and Board of Directors Cash Compensation and Common Share Repurchase
Earnings results for the second quarter of 2011 included approximately $423,000 or $0.03 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 $340,000 or $0.03 per diluted share, for the prior year comparable period. The increase 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 six months ended July 3, 2011 was approximately $844,000 or $0.07 per diluted share, compared to approximately $696,000 or $0.05 per diluted share for the prior year comparable period.
The company repurchased 13,700 shares of common stock during the fiscal 2011 second quarter at an average price of $9.77 per share, excluding commissions, for a total of approximately $134,000. The company has repurchased
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approximately 260,000 shares of common stock during the first six months of 2011 at an average price of $10.26 per share, excluding commissions, for a total of $2.7 million. The Company has now repurchased approximately 434,000 shares under its current 1.0 million share authorization at an average price of $10.28 per share, excluding commissions, for a total of approximately $4.5 million.
Marketing and Development
Development and marketing highlights during the quarter included a successful “limited time offer” tied into the “Best in Smoke” television series on Food Network®”. The current limited time offering, “U.S. of Barbeque – Hawaii” highlights the return of a successful promotion from last summer with the addition of Huli Buli Chicken and an adult beverage pairing called a “Tiki Twist”. On August 14th, we will again be featuring “Dave’s Day” which honors our founder, Dave Anderson, and provides a free entrée for those named Dave. Additionally, Dave’s Day will be the beginning of the “Hog Days of Summer” promotion, which will run through mid-September. This promotion offers an opportunity for incremental sales, featuring “Buck-a-Bone” and 50 cent chicken wing specials with the purchase of an entrée.
“Despite the continuation of this challenging environment, we remain encouraged,” O’Donnell said. “We will continue to grow our brand through new restaurant market penetration and through our award-winning food, by creating new products and offering promotions that provide excellent quality and value to our guests.”
Famous Dave’s closed a franchise-operated restaurant in Tallahassee, FL during the second quarter. Subsequent to the end of the quarter, Famous Dave’s opened two new franchise-operated restaurants in Erie, PA and Portland, OR . Famous Dave’s ended the quarter with 181 restaurants, including 52 company-owned restaurants and 129 franchise-operated restaurants, located in 37 states.
Outlook
The company is updating its guidance on restaurant development, and anticipates opening two company-owned restaurants and approximately eight franchise-operated restaurants during fiscal 2011.
Conference Call
The company will host a conference call tomorrow, July 28, 2011, at 10:00 a.m. Central Time to discuss its second 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 52 locations and franchises 131 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.
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FAMOUS DAVE’S OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
JULY 3, 2011 AND JULY 4, 2010
(in thousands, except share and per share data)
(Unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| July 3, 2011 |
July 4, 2010 |
July 3, 2011 |
July 4, 2010 |
|||||||||||||
| Revenue: |
||||||||||||||||
| Restaurant sales, net |
$ | 36,504 | $ | 36,213 | $ | 69,245 | $ | 64,606 | ||||||||
| Franchise royalty revenue |
4,381 | 4,214 | 8,410 | 8,196 | ||||||||||||
| Franchise fee revenue |
130 | 50 | 170 | 90 | ||||||||||||
| Licensing and other revenue |
275 | 272 | 555 | 456 | ||||||||||||
| Total revenue |
41,290 | 40,749 | 78,380 | 73,348 | ||||||||||||
| Costs and expenses: |
||||||||||||||||
| Food and beverage costs |
10,632 | 10,617 | 20,285 | 18,944 | ||||||||||||
| Labor and benefits costs |
11,124 | 11,024 | 21,561 | 20,273 | ||||||||||||
| Operating expenses |
9,974 | 9,616 | 19,048 | 17,244 | ||||||||||||
| Depreciation and amortization |
1,375 | 1,377 | 2,750 | 2,669 | ||||||||||||
| General and administrative expenses |
4,198 | 3,914 | 8,522 | 7,726 | ||||||||||||
| Asset impairment and estimated lease termination and other closing costs |
15 | 2 | 186 | (72 | ) | |||||||||||
| Pre-opening expenses |
45 | 54 | 45 | 81 | ||||||||||||
| Gain on acquisition, net of acquisition costs |
— | — | — | (2,036 | ) | |||||||||||
| Net loss on disposal of property |
6 | 8 | 7 | 8 | ||||||||||||
| Total costs and expenses |
37,369 | 36,612 | 72,404 | 64,837 | ||||||||||||
| Income from operations |
3,921 | 4,137 | 5,976 | 8,511 | ||||||||||||
| Other expense: |
||||||||||||||||
| Interest expense |
(281 | ) | (262 | ) | (560 | ) | (562 | ) | ||||||||
| Interest income |
7 | 20 | 13 | 59 | ||||||||||||
| Other expense, net |
(8 | ) | (12 | ) | — | (4 | ) | |||||||||
| Total other expense |
(282 | ) | (254 | ) | (547 | ) | (507 | ) | ||||||||
| Income before income taxes |
3,639 | 3,883 | 5,429 | 8,004 | ||||||||||||
| Income tax expense |
(1,238 | ) | (1,347 | ) | (1,846 | ) | (2,761 | ) | ||||||||
| Net income |
$ | 2,401 | $ | 2,536 | $ | 3,583 | $ | 5,243 | ||||||||
| Basic net income per common share |
$ | 0.30 | $ | 0.29 | $ | 0.44 | $ | 0.59 | ||||||||
| Diluted net income per common share |
$ | 0.29 | $ | 0.29 | $ | 0.43 | $ | 0.58 | ||||||||
| Weighted average common shares outstanding basic |
8,012,000 | 8,649,000 | 8,065,000 | 8,824,000 | ||||||||||||
| Weighted average common shares outstanding diluted |
8,183,000 | 8,810,000 | 8,243,000 | 8,986,000 | ||||||||||||
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FAMOUS DAVE’S OF AMERICA, INC. AND SUBSIDIARIES
OPERATING RESULTS
(unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| July 3, 2011 |
July 4, 2010 |
July 3, 2011 |
July 4, 2010 |
|||||||||||||
| Food and beverage costs (1) |
29.1 | % | 29.3 | % | 29.3 | % | 29.3 | % | ||||||||
| Labor and benefits (1) |
30.5 | % | 30.4 | % | 31.1 | % | 31.4 | % | ||||||||
| Operating expenses (1) |
27.3 | % | 26.6 | % | 27.5 | % | 26.7 | % | ||||||||
| Depreciation & amortization (restaurant level) (1) |
3.4 | % | 3.4 | % | 3.6 | % | 3.7 | % | ||||||||
| Depreciation & amortization (corporate level) (2) |
0.3 | % | 0.4 | % | 0.3 | % | 0.4 | % | ||||||||
| General and administrative (2) |
10.2 | % | 9.6 | % | 10.9 | % | 10.5 | % | ||||||||
| Asset impairment and estimated lease termination and other closing costs (1) |
— | — | 0.3 | % | (0.1 | )% | ||||||||||
| Pre-opening expenses and net loss on disposal of equipment (1) |
0.1 | % | 0.2 | % | 0.1 | % | 0.1 | % | ||||||||
| Gain on acquisition, net of acquisition costs (1) |
— | — | — | (3.2 | )% | |||||||||||
| Total costs and expenses (2) |
90.5 | % | 89.8 | % | 92.4 | % | 88.4 | % | ||||||||
| Income from operations (2) |
9.5 | % | 10.2 | % | 7.6 | % | 11.6 | % | ||||||||
| (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)
| July 3, 2011 |
January 2, 2011 |
|||||||
| ASSETS |
||||||||
| Cash and cash equivalents |
$ | 2,342 | $ | 2,654 | ||||
| Other current assets |
9,443 | 8,593 | ||||||
| Property, equipment and leasehold improvements, net |
60,525 | 61,550 | ||||||
| Other assets |
3,270 | 3,332 | ||||||
| Total assets |
$ | 75,580 | $ | 76,129 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| Current liabilities |
$ | 14,333 | $ | 13,854 | ||||
| Line of credit |
10,400 | 13,000 | ||||||
| Other long-term obligations |
16,231 | 16,371 | ||||||
| Shareholders’ equity |
34,616 | 32,904 | ||||||
| Total liabilities and shareholders’ equity |
$ | 75,580 | $ | 76,129 | ||||
FAMOUS DAVE’S OF AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| Three Months Ended | ||||||||
| July 3, 2011 |
July 4, 2010 |
|||||||
| Cash flows provided by operating activities |
$ | 6,463 | $ | 6,386 | ||||
| Cash flows used for investing activities |
(1,369 | ) | (8,320 | ) | ||||
| Cash flows (used for) provided by financing activities |
(5,406 | ) | 727 | |||||
| Net decrease in cash and cash equivalents |
$ | (312 | ) | $ | (1,207 | ) | ||
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SUPPLEMENTAL SALES INFORMATION
(unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| July 3, 2011 |
July 4, 2010 |
July 3, 2011 |
July 4, 2010 |
|||||||||||||
| Restaurant sales (in thousands): |
||||||||||||||||
| Company-Owned |
$ | 36,504 | $ | 36,213 | $ | 69,245 | $ | 64,606 | ||||||||
| Franchise-Operated |
$ | 94,239 | $ | 90,136 | $ | 180,813 | $ | 175,278 | ||||||||
| Total number of restaurants: |
||||||||||||||||
| Company-Owned |
52 | 52 | 52 | 52 | ||||||||||||
| Franchise-Operated |
129 | 125 | 129 | 125 | ||||||||||||
| Total |
181 | 177 | 181 | 177 | ||||||||||||
| Total weighted average weekly net sales (AWS): |
||||||||||||||||
| Company-Owned |
$ | 53,951 | $ | 53,471 | $ | 51,192 | $ | 49,833 | ||||||||
| Franchise-Operated |
$ | 56,410 | $ | 56,518 | $ | 54,590 | $ | 54,401 | ||||||||
| AWS 2005 and Post 2005:(1) |
||||||||||||||||
| Company-Owned |
$ | 59,106 | $ | 60,107 | $ | 56,075 | $ | 56,712 | ||||||||
| Franchise-Operated |
$ | 58,792 | $ | 60,657 | $ | 57,207 | $ | 58,643 | ||||||||
| AWS Pre-2005:(1) |
||||||||||||||||
| Company-Owned |
$ | 50,730 | $ | 49,650 | $ | 48,140 | $ | 46,377 | ||||||||
| Franchise-Operated |
$ | 50,021 | $ | 49,519 | $ | 48,362 | $ | 47,423 | ||||||||
| Operating weeks: |
||||||||||||||||
| Company-Owned |
676 | 676 | 1,352 | 1,289 | ||||||||||||
| Franchise-Operated |
1,670 | 1,593 | 3,311 | 3,219 | ||||||||||||
| Comparable net sales (24 month): |
||||||||||||||||
| Company-Owned % |
(1.2 | )% | 0.6 | % | 0.9 | % | (1.4 | )% | ||||||||
| Franchise-Operated % |
(1.4 | )% | (0.6 | )% | (0.7 | )% | (1.7 | )% | ||||||||
| Total number of comparable restaurants: |
||||||||||||||||
| Company-Owned |
51 | 42 | 44 | 41 | ||||||||||||
| Franchise-Operated |
107 | 99 | 103 | 96 | ||||||||||||
| (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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