Barbeque restaurant-chain Famous Dave’s of America has reported record sales and earnings for its fiscal year ended 30 December 2001.
Net income was US$8.1m, or US$0.75 per share, up from US$2.1m, US$0.22 per share, in 2000. Total revenues were US$87.7m compared to US$70.2m in 2000, representing a 25% increase. The company also reported its 11th consecutive quarter of increases in comparable sales and achieved 2.9% comparable sales growth for the year.
Fiscal 2001 earnings include adjustments to the company’s deferred tax asset. The result is that Famous Dave’s is now reporting earnings on a fully taxed basis, even though its loss carry-forward offsets taxable income. Excluding these adjustments, and treating the current and prior year as if they had both been fully taxed, the company would have reported earnings per share equivalent to US$0.23 in 2001 versus US$0.13 in the prior year.
Six new company operated restaurants were opened during the year along with nine new franchise restaurants. As was previously announced, Famous Dave’s entered into agreements to sell four company restaurants to franchisees. The Rochester, Minnesota restaurant was sold in December and the three Wisconsin restaurants in January, 2002. Year end restaurant count was 37 company restaurants and 19 franchise restaurants. Additional commitments for 61 franchise restaurants are in place through signed area development agreements.
Also included in the company’s results is a US$1,029,000 loss from its investment in an unconsolidated subsidiary. The subsidiary owns and operates two entertainment clubs, one each in Chicago and Memphis, under the brand “Isaac Hayes Food Music Passion”. Famous Dave’s had converted its blues club in Chicago into the venture, which subsequently opened the new club in Memphis. The loss represents the company’s proportionate share, or 40% of the entity’s losses, plus funding to cover cash operating losses. According to agreements previously disclosed, Famous Dave’s is obligated to fund, with certain limitations, cash operating losses for this subsidiary.
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By GlobalDataFor the Q4 of 2001, the company reported revenues of US$21.2m, an increase of 20% year on year. Net income, excluding adjustments to the deferred tax asset, totaled US$603,000, or US$.05 per share. Adjusting last year’s reported earnings for taxes, this would have represented a 300% increase in net income for the quarter.
Martin O’Dowd, President and CEO, commented: “Famous Dave’s continued to experience profitable growth in our core business.
“In addition to another year of solid gains in same store sales growth, we also achieved a 200 basis point improvement in restaurant-level profitability. Revenues from the franchise side of the business increased over 200% as our franchisees experienced great success in several new markets around the country.”
Looking forward, Famous Dave’s anticipates that it will open eight to ten new company operated restaurants during 2002. The first two will open during the Q2, one in Gaithersburg, Maryland and the second in Richmond, Virginia. In addition, 12-15 new franchise restaurants are expected to open before the end of the year. The first, in Omaha, Nebraska, opened on 11 February.
Famous Dave’s expects to achieve revenues between US$97m and US$102m for fiscal 2002 with earnings per share from US$0.27 to US$0.30 per share. For the Q1, the company expects revenues of US$21m to US$22m and earnings per share of US$0.02 to US$0.03.
