Famous Dave's Reports First Quarter Earnings of $0.15 Per Share

Same store sales for company-owned restaurants open for 24 months or more decreased 5.5 percent during the quarter, while same store sales for its franchise-operated restaurants declined 6.2 percent. Franchise royalty revenue for the quarter totaled $4.2 million, essentially flat to the comparable period in 2008.

Sales for company-owned restaurants in the first quarter reflects the comparable sales decline, partially offset by three new restaurants that have opened since the first quarter of 2008, and weighted average price increases of approximately 3.6 percent.

'Our operations team has been extremely focused and energized in response to the tough economic times our industry faces, and they performed well during first quarter,' said Christopher O'Donnell, President and Chief Executive Officer. 'Our diligence in managing costs was also very important to the results for this quarter. As we progress through the second quarter, we are working more aggressively than ever to drive up our sales numbers and reduce our costs. The economic landscape obviously continues to be difficult, and we are committed to improving our results despite that backdrop,' O'Donnell said.

Earnings for the first quarter increased on a year-over-year basis, reflecting reductions in food and beverage costs, as well as other year-over-year cost reductions. The decrease in food and beverage costs is largely attributable to capturing opportunity in the market by utilizing shorter term contracts.

The company's 2009 first quarter also reflected the following:

* An increase in labor and benefits expense year-over-year reflecting a higher level of medical claims for the current year. Additionally, the prior year benefitted from an adjustment that reduced insurance reserves that was not repeated in the current year. The net impact of these items was approximately $228,000, or $0.02 per diluted share.

* Lower depreciation expense due to impairments recorded in 2008 for several company-owned locations.

* A decrease of almost 8% in general and administrative costs resulting from an intensified focus on these costs, including lower salaries and benefits as well as travel and entertainment costs. Additionally, there were cost savings due to lower stock-based compensation of approximately $140,000, or $0.01 per diluted share, the non-recurrence of prior year executive search fees, and lower professional fees.

* No pre-opening expenses in the first quarter of 2009 compared to pre-opening expenses of approximately $250,000 in the first quarter of 2008.

* Costs associated with closed restaurants, such as utilities, of approximately $106,000 related to the Atlanta restaurants that were closed in November 2008 as we continue to pursue lease termination discussions. This amount also includes closure costs for a location in W. Saint Paul, Minnesota that closed on March 29, 2009, at the end of its original lease term. These costs are reflected in the asset impairment and estimated lease termination and other closing costs section of the statement of operations.

* Cash generated by operations of $3.8 million for the first quarter of 2009, was primarily used to pay-down $3.0 million, or 17% of our line of credit balance and for capital expenditures for our existing company-owned restaurants.

Stock-based Compensation

Earnings results for the first quarter of 2009 included approximately $140,000 or $0.01 per diluted share, in compensation expense as related to the company's stock-based incentive programs, as compared to approximately $280,000 or $0.02 per diluted share, for the prior year comparable period.

Marketing and Development

Development and marketing highlights during the quarter included a successful "limited time offer" of BBQ shrimp, as well as the promotion of value-driven menu items in order to increase guest visits.

Famous Dave's opened five new franchise-operated restaurants during the first quarter, in Everett, WA, Scarborough, ME, North Las Vegas, NV, Wilmington, DE, and Springfield, MA. One franchise-operated location closed during the quarter in Braintree, MA. Subsequent to quarter end, we opened a franchise location in New York City (Times Square) and closed a company-owned location in Minnesota. Famous Dave's ended the quarter with 174 restaurants, including 47 company-owned restaurants and 127 franchise-operated restaurants, located in 37 states.

Outlook

Famous Dave's reiterates its guidance on restaurant development issued in its fourth quarter earnings release, and anticipates opening a total of eight to ten franchise-operated restaurants in 2009.

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