MINNEAPOLIS, Feb. 19, 2015 (GLOBE NEWSWIRE) -- Famous Dave's of America, Inc. (Nasdaq:DAVE) today reported financial results for the fourth quarter and fiscal year ending December 28, 2014.
Highlights for the fourth quarter of 2014 as compared to the fourth quarter of 2013: -- Revenue decreased to $34.1 million from $35.7 million, primarily reflecting a comparable sales decrease;
-- Comparable sales for Company-owned restaurants open 24 months or more decreased 4.0%, compared to a decrease of 2.6% for the comparable quarter in the prior year;
-- Franchise royalty revenue of $4.0 million declined slightly from the prior year primarily reflecting a comparable sales decrease of 2.4%;
-- Restaurant level cash flow margins declined by 650 basis points primarily as a result of an increase in operating expenses. These expenses increased as a result of the timing of media spend, strategic one-time investments in the restaurants, and sales deleverage due to a year over year a decline in restaurant sales;
-- General and administrative expenses increased by approximately $1.0 million to $3.9 million for the fourth quarter of 2014 and were 11.4% of revenue compared to $2.9 million and 8.0% of revenue for the fourth quarter of 2013. The fourth quarter of 2013 benefited from a $1.4 million recapture of corporate bonus that had been accrued throughout the year;
-- Net loss was $2.5 million, including a $3.9 million impairment charge for six company-owned restaurants. This compared to net income of $1.9 million for the fourth quarter of 2013;
-- Basic net loss per share was $0.35 compared to net income per diluted share of $0.25 in the fourth quarter of 2013;
-- Basic adjusted net loss per share was $0.00 compared to diluted net income per share of $0.25 for the fourth quarter of 2013;
-- Adjusted EBITDA for the fourth quarter of 2014 was $1.7 million compared to $4.6 million for the fourth quarter of 2013;
Highlights for fiscal 2014 as compared to fiscal 2013: -- Revenue of $149.4 million decreased approximately $6.0 million, reflecting a decrease in restaurant sales and other revenue;
-- Comparable sales for Company-owned restaurants open 24 months or more decreased by 4.9% compared to an increase of 0.2% in 2013;
-- Franchise royalty revenue was $17.2 million, compared to $17.1 million, reflecting the contribution from five franchise-operated new restaurant openings, the full year impact of franchise-operated restaurants opened in fiscal 2013, partially offset by the closures of six lower sales volume restaurants and a comparable sales decrease of 2.5%;
-- Net income was $2.9 million compared to $4.8 million, reflecting the impact of a $4.5 million in impairment charges plus a $430,000 loss on the sale of décor inventory, partially offset by lower G&A expenses;
-- Diluted net income per share was $0.40 compared to $0.62, for 2013;
-- Diluted adjusted net income per share was $0.85 compared to $0.79 for fiscal 2013;
-- Adjusted EBITDA was approximately $15.4 million for fiscal 2014, compared to approximately $15.2 million for fiscal 2013;
Ed Rensi, CEO of Famous Dave's commented, "The Company's top line sales performed in line with our expectations for both the fourth quarter and fiscal 2014. We expect to continue to face top line sales headwinds until the middle of the second quarter of 2015. We confidently believe that our decision to eliminate the heavy discounting strategy that was in place for 2013 and early 2014 was, and is, the right one. During the fourth quarter we made important strategic investments and made some tough portfolio rationalization decisions that mask the underlying progress that we are making. We will continue to focus on driving sales without the use of heavy discounting while prudently managing our expenses and actively manage our refranchising strategy. Capital allocation remains front of mind as we look to create meaningful increases in shareholder value. We are confident that the path we are on is the right one."
Development
Famous Dave's opened one franchise-operated restaurant in Largo, Maryland during the fourth quarter and closed three company-owned restaurants as well as four franchise-operated restaurants. Famous Dave's ended the quarter with 189 restaurants, including 50 company-owned restaurants and 139 franchise-operated restaurants, located in 34 states, the Commonwealth of Puerto Rico, and Canada.
Conference Call
The company will host a conference call, February 19, 2015, at 7:30 a.m. Central Time to discuss its fourth 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 50 locations and franchises 137 additional units in 34 states, the Commonwealth of Puerto Rico, and Canada. Its menu features award-winning barbequed and grilled meats, an ample selection of salads, side items and sandwiches, and unique made-from-scratch desserts.
Use of Non-GAAP Financial Measures
To supplement its financial statements, Famous Dave's of America, Inc. also provides investors with Adjusted net income per share and Adjusted EBITDA which are non-GAAP financial measures. The Company believes that these non-GAAP measures provide useful information to management and investors regarding certain financial and business trends relating to its financial condition and results of operations. Famous Dave's management uses these non-GAAP measures to compare the Company's performance to that of prior periods for trend analysis and planning purposes.
Adjusted net income per share consists of net income plus non-cash items, such as, asset impairment and estimated lease termination and other closing costs and net loss on disposal of equipment divided by the weighted average number of shares of common stock outstanding during each period presented. Famous Dave's of America, Inc. believes adjusted net income per share is useful to an investor because it is widely used to measure a company's operating performance.
EBITDA consists of income from operations plus depreciation and amortization. Adjusted EBITDA consists of EBITDA plus non-cash items, such as, asset impairment and estimated lease termination and other closing costs and net loss on disposal of equipment. Famous Dave's uses Adjusted EBITDA as a measure of operating performance because it assists the Company in comparing performance on a consistent basis, as it removes from operating results the impact of non-cash events. The Company believes Adjusted EBITDA is useful to an investor in evaluating the company's operating performance because it is widely used to measure a Company's operating performance without the impact of items such as depreciation and amortization, which can vary depending upon accounting methods and the book value of assets, and to present a meaningful measure of corporate performance exclusive of the impact of non-cash events and the method by which assets were acquired.
These non-GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with generally accepted accounting principles in the United States. These non-GAAP financial measures exclude significant expenses and income that are required by GAAP to be recorded in the company's financial statements and are subject to inherent limitations. Famous Dave's of America, Inc. urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures that are included in this press release. The tables appearing at the end of this release provide reconciliations of net income to Adjusted net income per share and Adjusted EBITDA.
FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS DECEMBER 28, 2014 AND DECEMBER 29, 2013 (in thousands, except share and per share data) (unaudited)
Three Months Ended Twelve Months Ended -------------------------- -------------------------- December 28, December 29, December 28, December 29, 2014 2013 2014 2013 ------------ ------------ ------------ ------------ Revenue: Restaurant sales, net $29,808 $31,424 $131,015 $136,930 Franchise royalty revenue 4,002 4,042 17,196 17,104 Franchise fee revenue 50 23 190 282 Licensing and other revenue 220 232 954 1,116 ------------ ------------ ------------ ------------ Total revenue 34,080 35,721 149,355 155,432 ------------ ------------ ------------ ------------
Costs and expenses: Food and beverage costs 9,112 9,421 38,666 41,431 Labor and benefits costs 10,210 10,685 42,591 44,335 Operating expenses 9,170 7,908 36,093 34,995 Depreciation and amortization 1,576 1,581 6,081 6,160 General and administrative expenses 3,888 2,862 16,078 18,903 Asset impairment and
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