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8-K - FORM 8-K - BBQ HOLDINGS, INC. | c56798e8vk.htm |
EX-10.1 - EX-10.1 - BBQ HOLDINGS, INC. | c56798exv10w1.htm |
EX-10.2 - EX-10.2 - BBQ HOLDINGS, INC. | c56798exv10w2.htm |
Exhibit 99.1
Contact: | Diana G. Purcel Chief Financial Officer 952-294-1300 |
Famous Daves Reports Fourth Quarter Results of $0.08 per share; Full year
Results of $0.62 per share
Results of $0.62 per share
MINNEAPOLIS, March 3, 2010 Famous Daves of America, Inc. (NASDAQ: DAVE) today announced
revenue of $32.6 million and net income of $774,000, or $0.08 per diluted share, for its fiscal
fourth quarter ended January 3, 2010. These results compare to revenue of $32.8 million and a net
loss of $2.0 million, or ($0.22) per diluted share for the comparable period in the prior year. For
the full year ended January 3, 2010, the company reported net income of $5.7 million, or $0.62 per
diluted share, on total revenue of approximately $136.0 million, as compared with net income of
$389,000, or $0.04 per diluted share, on total revenue of approximately $140.4 million for fiscal
2008.
Fiscal 2009s fourth quarter and full year results include an approximate $0.05 per diluted share
impact resulting from a 53rd fiscal week, compared to 52 weeks in the prior fiscal year.
The fiscal 2009 full year results also reflect approximately $0.05 of net charges for asset
impairments, lease terminations, other closing costs, and early debt retirement. Fiscal 2008s
fourth quarter and full year results include an approximate $0.23 and $0.49 per diluted share,
respectively, in net charges for asset impairments, lease terminations, and other closing costs.
We were pleased with the response to our targeted promotional efforts during the fourth quarter,
which helped boost sales and traffic for dine-in, to-go and catering, said Christopher ODonnell,
president and chief executive of Famous Daves. Additionally, our operations team did a famous
job of executing and maintaining a high level of guest satisfaction during the quarter, and despite
the challenging sales environment of 2009, the company delivered solid financial results.
Fourth quarter same store sales for company-owned restaurants open for 24 months or more declined
3.4 percent year-over-year, while same store sales for its franchise-operated restaurants declined
8.5 percent. Full year same store sales for company-owned restaurants decreased 6.3 percent, while
its franchise-operated restaurants declined 8.5 percent.
Sales results for company-owned restaurants reflect general declines in consumer spending, which
impacted the dine-in, to-go and catering business segments. Sales declines were slightly offset by
the impact of weighted average price increases of approximately 2.3 percent since December 2008 and
sales building promotional activity. Off-premise sales for fiscal 2009 totaled 31.1 percent of
sales compared to 32.4 percent for fiscal 2008.
Franchise royalty revenue for the quarter totaled $4.1 million, up 6.0 percent from the comparable
period in 2008. Franchise royalty revenue for the full year totaled $16.9 million, a slight
decrease from 2008s royalty revenue. The full year decrease in franchise royalty revenue reflects
the decline in comparable sales for franchise-operated restaurants, partially offset by the
annualization of a net nine additional franchise-operated restaurants open since the fourth quarter
of 2008.
Fiscal 2009 results reflect net charges of approximately $0.05 per diluted share. A loss on the
early extinguishment of debt of $0.04 per diluted share, lease termination charges of $0.02 per
diluted share, carrying costs related to closed units of $0.01 per diluted share, and software
impairments of $0.01 per diluted share, were partially offset by a gain of $0.03 per diluted share
on lease terminations for two
previously closed restaurants.
Stock-Based Compensation
Earnings results for the fourth quarter of 2009 included approximately $221,000, or $0.02 per
diluted share, in compensation expense related to the companys stock-based incentive programs, as
compared to a credit of approximately $4,000, for the prior year comparable period. Stock-based
compensation expense for the full year ended January 3, 2010 was approximately $832,000 compared to
approximately $694,000 for the prior year comparable period.
Common Share Repurchases
During the quarter, the company repurchased 31,600 shares of common stock under its current
authorization, at an average price of $5.95 per share, excluding commissions, for a total of
approximately $188,000.
Marketing and Development
Marketing and Development highlights during the quarter included a Limited Time Offer featuring a
Smokin hot meatloaf and potatoes entrée and a 12 ounce smoked rib-eye steak with Daves special
barbeque butter. Additionally, sales stimulation tactics were used to promote dine-in and catering
occasions.
During the fourth quarter of fiscal 2009, three franchise-operated restaurants opened in Lake
Delton, Wisconsin, Topeka, Kansas and Ft. Collins, Colorado. Two franchise-operated restaurants
closed in Augusta, Georgia and Grand Rapids, Michigan. One company-owned location closed in
Naperville, Illinois. Famous Daves ended the quarter with 177 restaurants, including 45
company-owned restaurants and 132 franchise-operated restaurants, located in 37 states.
Additionally, during the fourth quarter, the company entered into an Area Development Agreement for
four restaurants in Nevada and Northern California. Subsequent to the quarter, two
franchise-operated restaurants closed in West Virginia.
Acquisition of Seven Franchise Restaurants
As previously announced, on March 2, 2010, the Company was approved as the winning bidder for seven
franchise restaurants based in New Jersey and New York. The Company utilized its line of credit,
and paid approximately $6.8 million for the assets. This amount will be converted to a long-term
loan provided by Wells Fargo Bank, N.A. This loan will have a seven year term, bears interest at
LIBOR plus 225 basis points and has no prepayment penalties associated with it. In connection with
this term loan, the Company is amending its existing Credit Agreement to address future covenant
requirements to ensure compliance as a result of the additional indebtedness.
The acquisition of these seven restaurants is expected to add approximately $14.5 million in
revenue, net of lost royalty fees, for the remainder of fiscal 2010. Due to acquisition costs,
anticipated repairs and maintenance, and increased operational expense, associated with the
acquisition, these restaurants are not expected to contribute to earnings during fiscal 2010. The
Company will, however, record a one-time non-cash gain in the first quarter of 2010, equal to the
difference between the purchase price and the fair market value of the assets acquired. The seven
restaurants are expected to be additive to earnings in subsequent years.
Outlook
For 2010, Famous Daves expects to open one new company-owned restaurant and anticipates the
addition of approximately eight franchise-operated restaurants. The company plans to spend
approximately $5.5 million on capital expenditures in 2010 for one new company-owned restaurant,
several remodels of existing company-owned restaurants, maintenance for existing restaurants and
anticipated capital expenditures for the newly acquired restaurants, and various infrastructure
projects.
We remain optimistic about the coming year, and plan to build on the recent momentum weve
experienced over the last couple of months, ODonnell said. During 2009, we improved our bottom
line, generated strong cash flow and strengthened our balance sheet; positioning Famous Daves well
to meet the challenges and opportunities of 2010.
Conference Call
The company will host a conference call tomorrow, March 4, 2010, at 10:00 a.m. Central Time to
discuss its fourth quarter and full-year 2009 financial results. A live webcast of the discussion
will be available through the Investor Relations section of Famous Daves web site at
www.famousdaves.com.
About Famous Daves
Famous Daves of America, Inc. develops, owns, operates and franchises barbeque restaurants. As of
today, the company owns 52 locations and franchises 124 additional locations in 36 states. Its menu
features award-winning barbequed and grilled meats, an ample selection of salads, side items,
sandwiches, and unique desserts.
FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)
Three Months Ended | Twelve Months Ended | |||||||||||||||
January 3, | December 28, | January 3, | December 28, | |||||||||||||
2010 | 2008 | 2010 | 2008 | |||||||||||||
Revenue: |
||||||||||||||||
Restaurant sales, net |
$ | 28,334 | $ | 28,797 | $ | 117,934 | $ | 122,016 | ||||||||
Franchise royalty revenue |
4,061 | 3,832 | 16,912 | 17,026 | ||||||||||||
Franchise fee revenue |
45 | 35 | 200 | 492 | ||||||||||||
Licensing and other revenue |
161 | 141 | 972 | 848 | ||||||||||||
Total revenue |
32,601 | 32,805 | 136,018 | 140,382 | ||||||||||||
Costs and expenses: |
||||||||||||||||
Food and beverage costs |
8,443 | 8,827 | 35,489 | 37,581 | ||||||||||||
Labor and benefits costs |
9,159 | 9,459 | 37,016 | 38,185 | ||||||||||||
Operating expenses |
7,995 | 8,348 | 31,487 | 32,510 | ||||||||||||
Depreciation and amortization |
1,357 | 1,396 | 5,191 | 5,522 | ||||||||||||
Asset impairment and estimated
lease termination and other
closing costs |
90 | 3,033 | 209 | 6,912 | ||||||||||||
General and administrative
expenses |
4,103 | 4,151 | 16,079 | 16,521 | ||||||||||||
Pre-opening expenses |
| 467 | | 1,103 | ||||||||||||
Net loss on disposal of property |
20 | 2 | 33 | 18 | ||||||||||||
Total costs and expenses |
31,167 | 35,683 | 125,504 | 138,352 | ||||||||||||
Income (loss) from operations |
1,434 | (2,878 | ) | 10,514 | 2,030 | |||||||||||
Other expense: |
||||||||||||||||
Loss on early extinguishment of
debt |
(20 | ) | | (509 | ) | | ||||||||||
Interest expense |
(266 | ) | (499 | ) | (1,443 | ) | (1,977 | ) | ||||||||
Interest income |
36 | 74 | 129 | 246 | ||||||||||||
Other income (expense), net |
| 4 | (1 | ) | (29 | ) | ||||||||||
Total other expense |
(250 | ) | (421 | ) | (1,824 | ) | (1,760 | ) | ||||||||
Income (loss) before income
taxes |
1,184 | (3,299 | ) | 8,690 | 270 | |||||||||||
Income tax (expense) benefit |
(410 | ) | 1,344 | (2,989 | ) | 119 | ||||||||||
Net income (loss) |
$ | 774 | $ | (1,955 | ) | $ | 5,701 | $ | 389 | |||||||
Basic net income (loss) per
common share |
$ | 0.08 | $ | (0.22 | ) | $ | 0.63 | $ | 0.04 | |||||||
Diluted net income (loss) per
common share |
$ | 0.08 | $ | (0.22 | ) | $ | 0.62 | $ | 0.04 | |||||||
Weighted average common shares
outstanding basic |
9,143,000 | 9,075,000 | 9,114,000 | 9,406,000 | ||||||||||||
Weighted average common shares
outstanding diluted |
9,292,000 | 9,075,000 | 9,211,000 | 9,542,000 | ||||||||||||
FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
OPERATING RESULTS
(unaudited)
OPERATING RESULTS
(unaudited)
Three Months Ended | Twelve Months Ended | |||||||||||||||
January 3, | December 28, | January 3, | December 28, | |||||||||||||
2010 | 2008 | 2010 | 2008 | |||||||||||||
Food and beverage costs (1) |
29.8 | % | 30.7 | % | 30.1 | % | 30.8 | % | ||||||||
Labor and benefits (1) |
32.3 | % | 32.8 | % | 31.4 | % | 31.3 | % | ||||||||
Operating expenses (1) |
28.2 | % | 29.0 | % | 26.7 | % | 26.6 | % | ||||||||
Depreciation & amortization
(restaurant level) (1) |
4.2 | % | 4.3 | % | 3.9 | % | 4.1 | % | ||||||||
Depreciation & amortization
(corporate level) (2) |
0.5 | % | 0.5 | % | 0.4 | % | 0.4 | % | ||||||||
Asset impairment and lease termination and other
closing costs (1) |
0.3 | % | 10.5 | % | 0.2 | % | 5.7 | % | ||||||||
General and administrative expenses (2) |
12.6 | % | 12.7 | % | 11.8 | % | 11.8 | % | ||||||||
Pre-opening expenses and net
loss on disposal of property (1) |
0.1 | % | 1.6 | % | 0.0 | % | 0.9 | % | ||||||||
Total costs and expenses (2) |
95.6 | % | 108.8 | % | 92.3 | % | 98.6 | % | ||||||||
Income (loss) from operations (2) |
4.4 | % | (8.8 | %) | 7.7 | % | 1.4 | % |
(1) | As a percentage of restaurant sales, net | |
(2) | As a percentage of total revenue |
FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
January 3, | December 28, | |||||||
2010 | 2008 | |||||||
ASSETS |
||||||||
Cash and cash equivalents |
$ | 2,996 | $ | 1,687 | ||||
Other current assets |
9,486 | 11,604 | ||||||
Property, equipment and leasehold improvements, net |
54,818 | 58,129 | ||||||
Other assets |
1,081 | 1,981 | ||||||
Total assets |
$ | 68,381 | $ | 73,401 | ||||
LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||
Current liabilities |
$ | 12,464 | $ | 12,060 | ||||
Line of credit |
13,500 | 18,000 | ||||||
Other long-term obligations |
9,423 | 17,157 | ||||||
Shareholders equity |
32,994 | 26,184 | ||||||
Total liabilities and shareholders equity |
$ | 68,381 | $ | 73,401 | ||||
FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Twelve Months Ended | ||||||||
January 3, | December 28, | |||||||
2010 | 2008 | |||||||
Cash flows provided by operating activities |
$ | 14,521 | $ | 11,157 | ||||
Cash flows used for investing activities |
(1,930 | ) | (10,466 | ) | ||||
Cash flows used for financing activities |
(11,282 | ) | (542 | ) | ||||
Increase in cash and cash equivalents |
$ | 1,309 | $ | 149 | ||||
SUPPLEMENTAL SALES INFORMATION
(unaudited)
(unaudited)
Three Months Ended | Twelve Months Ended | |||||||||||||||
January 3, | December 28, | January 3, | December 28, | |||||||||||||
2010 | 2008 | 2010 | 2008 | |||||||||||||
Restaurant sales (in thousands): |
||||||||||||||||
Company-Owned |
$ | 28,334 | $ | 28,797 | $ | 117,934 | $ | 122,016 | ||||||||
Franchise-Operated |
$ | 87,703 | $ | 79,892 | $ | 358,696 | $ | 355,946 | ||||||||
Total number of restaurants: |
||||||||||||||||
Company-Owned |
45 | 47 | 45 | 47 | ||||||||||||
Franchise-Operated |
132 | 123 | 132 | 123 | ||||||||||||
Total |
177 | 170 | 177 | 170 | ||||||||||||
Total weighted average weekly net sales (AWS): |
||||||||||||||||
Company-Owned |
$ | 44,692 | $ | 45,929 | $ | 48,197 | $ | 50,685 | ||||||||
Franchise-Operated |
$ | 48,001 | $ | 50,790 | $ | 53,016 | $ | 56,535 | ||||||||
AWS 2005 and Post 2005: (1) |
||||||||||||||||
Company-Owned |
$ | 51,784 | $ | 60,582 | $ | 57,027 | $ | 65,684 | ||||||||
Franchise-Operated |
$ | 51,943 | $ | 56,474 | $ | 57,890 | $ | 63,315 | ||||||||
AWS Pre 2005: (1) |
||||||||||||||||
Company-Owned |
$ | 42,135 | $ | 41,281 | $ | 45,085 | $ | 46,776 | ||||||||
Franchise-Operated |
$ | 41,687 | $ | 43,363 | $ | 45,885 | $ | 48,279 | ||||||||
Operating Weeks: |
||||||||||||||||
Company-Owned |
634 | 627 | 2,441 | 2,399 | ||||||||||||
Franchise-Operated |
1,824 | 1,573 | 6,758 | 6,296 | ||||||||||||
Comparable net sales: (2) |
||||||||||||||||
Company-Owned |
(3.4 | %) | (8.3 | %) | (6.3 | %) | (2.0 | %) | ||||||||
Franchise-Operated |
(8.5 | %) | (7.4 | %) | (8.5 | %) | (3.6 | %) | ||||||||
Total number of comparable restaurants: |
||||||||||||||||
Company-Owned |
38 | 38 | 37 | 35 | ||||||||||||
Franchise-Operated |
100 | 89 | 90 | 74 |
(1) | Provides further delineation of AWS for restaurants opened during the pre-fiscal 2005, and restaurants opened during the post-fiscal 2005, timeframes. | |
(2) | Comparable data based on a 52 week comparison from the prior year as of 12/27/2009. |
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 companys actual results to differ materially from expected results. Although
Famous Daves 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 Daves
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 companys SEC reports.