Famous Dave's of America, Inc. (
Q1 2011 Conference Call
April 28, 2011, 10:00 AM CT
Diana Purcel - CFO
Christopher O’Donnell - President and CEO
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Good morning everyone and thank you for joining us for the Famous Dave’s fiscal 2011 first quarter conference call. I’m Diana Purcel, Chief Financial Officer, and joining me is Christopher O’Donnell, our Chief Executive Officer.
Before we begin, we’d like to remind those listening that certain matters discussed within are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Famous Dave’s believes that the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from Famous Dave’s expectations include financial performance, restaurant industry conditions, execution of our restaurant development and construction programs, franchisee performance, ability of our franchisees to meet their development commitments, changes in local or national economic conditions, availability of financing, and other risks detailed from time to time in the company’s SEC reports.
Our earnings release, which contains the financial and other statistical information being discussed this morning, was issued yesterday afternoon after market close and can be accessed by clicking on the Investor Relations link on our website at www.famousdaves.com.
As a reminder, this call is being recorded and will be available for replay for seven days.
Now, I will turn the call over to Christopher O’Donnell, Famous Dave’s President and CEO. Christopher?
Thank you, Diana.
Good morning everyone, and thank you for joining us.
For the first quarter, we reported $0.14 per share, which included a $0.01 per share non-cash charge, on revenue of $37.1 million. These results compared to 2010’s first quarter earnings of $0.30, or $0.15 per share, adjusted for last year’s gain on the acquisition of restaurants in New York and New Jersey, on revenue of $32.6 million.
Revenue for the quarter reflects a comparable sales increase of 3.0% for our company-owned locations, sales from the new restaurant in Bel Air, MD, as well as the impact from two additional months of sales year over year for our New York and New Jersey restaurants. The New York and New Jersey restaurants will be included in our comparable sales results beginning with the second quarter. They won’t be in our full year comparable results, because they weren’t included in the company-owned restaurant comparable base until April 2011.
While we are encouraged by our comparable sales and revenue performance, we aren’t satisfied with delivering results that are essentially flat year over year, and we know we still have a lot of work to do.
The categories of dine-in, to-go, and catering all increased during the quarter, and we remain pleased with the improvement in off-premise sales over the past several quarters.
Additionally, our franchise restaurants continued to improve during the quarter, as franchise comparable sales were essentially flat.
As we prepare to enter the summer BBQ season, we remain optimistic, yet still somewhat cautious, in our outlook. In the broadest sense, the increase in gas prices, worldwide unrest, the horrific disaster in Japan, and mixed signs of economic growth, have created continued uncertainty in the current business and consumer climate.
While we can’t do anything about the macro-economic factors, what we can do, is keep our heads down, concentrate on running our business, and manage the uncertainty. This means, understanding what we can and cannot control, planning for a variety of scenarios and capitalizing on opportunities.
We continue to evaluate each and every line in our income statement to determine what can be done strategically to take advantage of opportunities, or to create our own, to drive profitable sales and manage costs in a rising price environment.
Diana will cover more details on our financial results for the quarter momentarily.
On the development front, we continue to open new units and close some older, under-performing restaurants, as well. During the first quarter, we opened new franchise locations in Lawrence, Kansas, Reno, Nevada and Henderson, Nevada. Under-performing locations in Omaha, Nebraska, Pensacola, Florida, and Kansas City, Missouri closed. We are currently in discussions with new and existing franchise partners to continue to build our pipeline and still expect to open approximately 12 total restaurants during 2011, including a new company-owned location in Falls Church, Virginia in the third quarter.
Last month, we had our largest, and arguably the most successful, Famous Dave’s Franchise Partner and Operations “Brand” Conference to date. As a reminder, this conference gives us the opportunity to spend quality time with our franchise partners, operators and suppliers over the course of three days.
This year’s conference featured informative sessions on franchise finance, social media marketing, the guest experience, and our operational scorecard, FD Powers. In our estimation, this year’s gathering was successful on all fronts - the content, interaction, sharing of information and communication of our vision. Our relationships with our franchise partners are strong, and we’re working hard to provide them with support and to identify solutions for their business needs. As just one example, we were pleased to introduce our franchise partners to “BoeFly”, an online marketplace that helps match franchisees seeking funding with suitable financing sources.
Last quarter we spoke to you briefly about our Guest Experience initiative, and we are now in the process of rolling out the components of that program.