##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly Period Ended April 1, 2007
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission File No. 0-21625
 FAMOUS DAVES of AMERICA, INC.
  Minnesota
(State or other jurisdiction of 
incorporation or organization)
    
    41-1782300
(I.R.S. Employer
Identification No.)
 12701 Whitewater Drive, Suite 200
Minnetonka, MN 55343
  (952) 294-1300
 þ o
  o þ o
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FAMOUS DAVES OF AMERICA, INC.
TABLE OF CONTENTS
 PagePART I
    
    FINANCIAL INFORMATIONItem 1
    
    Consolidated Financial StatementsConsolidated Balance SheetsAs of April 1, 2007 and December 31, 2006
    
    3Consolidated Statements of OperationsFor the three months ended April 1, 2007 and April 2, 2006
    
    4Consolidated Statements of Cash FlowsFor the three months ended April 1, 2007 and April 2, 2006
    
    5Notes to Consolidated Financial Statements
    
    6Item 2
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    14Item 3
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    23Item 4
    
    Controls and Procedures
    
    24PART II
    
    OTHER INFORMATIONItem 1
    
    Legal Proceedings
    
    25Item 2
    
    Purchases of Equity Securities by the Issuer
    
    25Item 6
    
    Exhibits
    
    26SIGNATURESCERTIFICATIONSCertification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO and CFO Pursuant to Section 906
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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
APRIL 1, 2007 AND DECEMBER 31, 2006  (in thousands, except share and per-share data)
(Unaudited)
 April 1,
    
    
    December 31,2007
    
    
    2006ASSETSCurrent assets:Cash and cash equivalents
    
    $
    2,098
    
    
    $
    1,049Restricted cash
    
    
    2,044
    
    
    
    1,425Accounts receivable, net
    
    
    3,009
    
    
    
    3,337Inventories
    
    
    1,716
    
    
    
    1,765Deferred tax asset
    
    
    2,639
    
    
    
    3,234Prepaid expenses and other current assets
    
    
    1,312
    
    
    
    1,576Notes receivable
    
    
    537
    
    
    
    544Total current assets
    
    
    13,355
    
    
    
    12,930Property, equipment and leasehold improvements, net
    
    
    49,723
    
    
    
    50,037Other assets:Notes receivable, less current portion
    
    
    1,139
    
    
    
    1,183Deferred tax asset, less current portion
    
    
    889
    
    
    
    889Other assets
    
    
    562
    
    
    
    603$
    65,668
    
    
    $
    65,642LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Line of credit
    
    $
    1,000
    
    
    $
    Current portion of long-term debt
    
    
    252
    
    
    
    302Accounts payable
    
    
    5,454
    
    
    
    5,248Accrued compensation and benefits
    
    
    2,941
    
    
    
    3,399Other current liabilities
    
    
    3,300
    
    
    
    3,858Total current liabilities
    
    
    12,947
    
    
    
    12,807Long-term liabilities:Long-term debt, less current portion
    
    
    7,104
    
    
    
    8,119Financing leases
    
    
    4,500
    
    
    
    4,500Other liabilities
    
    
    4,574
    
    
    
    4,381Total liabilities
    
    
    29,125
    
    
    
    29,807Shareholders equity:Common stock, $.01 par value, 100,000,000 shares
authorized 10,121,000 and 10,130,000 shares
issued and outstanding at
April 1, 2007 and December 31, 2006, respectively
    
    
    101
    
    
    
    101Additional paid-in capital
    
    
    32,229
    
    
    
    32,863Retained earnings
    
    
    4,213
    
    
    
    2,871Total shareholders equity
    
    
    36,543
    
    
    
    35,835$
    65,668
    
    
    $
    65,642
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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
APRIL 1, 2007 AND APRIL 2, 2006  (in thousands, except share and per share data)
(Unaudited)
 Three Months EndedApril 1,
    
    
    April 2,2007
    
    
    2006Revenue:Restaurant sales, net
    
    $
    24,941
    
    
    $
    23,216Franchise royalty revenue
    
    
    3,649
    
    
    
    3,140Franchise fee revenue
    
    
    315
    
    
    
    562Licensing and other revenue
    
    
    98
    
    
    
    170Total revenue
    
    
    29,003
    
    
    
    27,088Costs and expenses:Food and beverage costs
    
    
    7,611
    
    
    
    7,005Labor and benefits costs
    
    
    7,480
    
    
    
    7,187Operating expenses
    
    
    6,193
    
    
    
    5,990Depreciation and amortization
    
    
    1,140
    
    
    
    1,127General and administrative expenses
    
    
    4,123
    
    
    
    4,007Pre-opening expenses
    
    
    6
    
    
    
    182Loss on disposal of property
    
    
    18
    
    
    
    9Total costs and expenses
    
    
    26,571
    
    
    
    25,507Income from operations
    
    
    2,432
    
    
    
    1,581Other income (expense):Loss on early extinguishment of debt
    
    
    (12
    )
    
    
    Interest expense
    
    
    (408
    )
    
    
    (471
    )Interest income
    
    
    76
    
    
    
    105Other income (expense), net
    
    
    4
    
    
    
    (38
    )Total other expense
    
    
    (340
    )
    
    
    (404
    )Income before income taxes
    
    
    2,092
    
    
    
    1,177Income tax provision
    
    
    (750
    )
    
    
    (435
    )Net income
    
    $
    1,342
    
    
    $
    742Basic and diluted net income per common share
    
    $
    0.13
    
    
    $
    0.07Weighted average common shares outstanding  basic
    
    
    10,130,000
    
    
    
    10,606,000Weighted average common shares outstanding  diluted
    
    
    10,492,000
    
    
    
    10,949,000
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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
APRIL 1, 2007 and APRIL 2, 2006  (in thousands)
(Unaudited)
 Three Months EndedApril 1,
    
    
    April 2,2007
    
    
    2006Cash flows from operating activitiesNet income
    
    $
    1,342
    
    
    $
    742Adjustments to reconcile net income to cash flows provided by
operations:Depreciation and amortization
    
    
    1,140
    
    
    
    1,127Amortization of deferred financing costs
    
    
    14
    
    
    
    16Loss on disposal of property
    
    
    18
    
    
    
    9Loss on early extinguishment of debt
    
    
    12
    
    
    
    Deferred income taxes
    
    
    595
    
    
    
    421Deferred rent
    
    
    91
    
    
    
    138Stock-based compensation
    
    
    540
    
    
    
    365Changes in operating assets and liabilities:Restricted cash
    
    
    (619
    )
    
    
    (832
    )Accounts receivable, net
    
    
    328
    
    
    
    157Inventories
    
    
    49
    
    
    
    (45
    )Prepaid expenses and other current assets
    
    
    265
    
    
    
    (54
    )Deposits
    
    
    14
    
    
    
    1Accounts payable
    
    
    206
    
    
    
    1,585Accrued compensation and benefits
    
    
    (610
    )
    
    
    433Other current liabilities
    
    
    (48
    )
    
    
    (552
    )Long-term deferred compensation
    
    
    102
    
    
    
    Cash flows provided by operations
    
    
    3,439
    
    
    
    3,511Cash flows from investing activities:Purchases of property, equipment and leasehold improvements
    
    
    (1,354
    )
    
    
    (1,473
    )Payments received on notes receivable
    
    
    51
    
    
    
    53Cash flows used for investing activities
    
    
    (1,303
    )
    
    
    (1,420
    )Cash flows from financing activities:Proceeds from draws on line of credit
    
    
    3,500
    
    
    
    Payments on line of credit
    
    
    (2,500
    )
    
    
    Payments on long-term debt
    
    
    (1,065
    )
    
    
    (120
    )Proceeds from exercise of stock options
    
    
    102
    
    
    
    39Tax benefit of stock-options exercised
    
    
    59
    
    
    
    7Repurchase of common stock
    
    
    (1,183
    )
    
    
    Cash flows used for financing activities
    
    
    (1,087
    )
    
    
    (74
    )Increase in cash and cash equivalents
    
    
    1,049
    
    
    
    2,017Cash and cash equivalents, beginning of period
    
    
    1,049
    
    
    
    4,410Cash and cash equivalents, end of period
    
    $
    2,098
    
    
    $
    6,427
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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 
 (1) Basis of Presentation
    (2) Net Income Per Common Share
   Three Months EndedApril 1,
    
    
    April 2,(in thousands, except per share data)
    
    2007
    
    
    2006Net income per common share  basic:Net income
    
    $
    1,342
    
    
    $
    742Weighted average shares outstanding
    
    
    10,130
    
    
    
    10,606Net income per common share  basic
    
    $
    0.13
    
    
    $
    0.07Net income per common share  diluted:Net income
    
    $
    1,342
    
    
    $
    742Weighted average shares outstanding
    
    
    10,130
    
    
    
    10,606Dilutive impact of common stock equivalents outstanding
    
    
    362
    
    
    
    343Adjusted weighted average shares outstanding
    
    
    10,492
    
    
    
    10,949Net income per common share  diluted
    
    $
    0.13
    
    
    $
    0.07
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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 (3) Public Relations and Marketing Development Fund and Restricted Cash
  (4) Credit Facility
     -7-




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 (5) Stock Options, Performance Shares, Other Forms of Compensation, and Common Share
Repurchases
  Stock Options
  Number of
    
    
    Weighted Average(number of options in thousands)
    
    Options
    
    
    Exercise PriceOutstanding at December 31, 2006
    
    
    728
    
    
    $
    5.24Granted
    
    
    
    
    
    
    Exercised
    
    
    (15
    )
    
    
    6.83Canceled or expired
    
    
    
    
    
    
    Outstanding at April 1, 2007
    
    
    713
    
    
    $
    5.21Options Exercisable at April 1, 2007
    
    
    598
    
    
    $
    5.07
 Performance Shares
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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 (5) Stock Options, Performance Shares, Other Forms of Compensation, and Common Share
Repurchases (continued)
    Three Months EndedApril 1,
    
    April 2,(in thousands)
    
    2007
    
    2006Performance Share Program2004  2006
    
    $
    
    
    
    $
    162005  2007
    
    
    99
    
    
    
    1192006  2008
    
    
    68
    
    
    
    782007  2009
    
    
    150
    
    
    
    
 Deferred Stock Unit Plan
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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 (5)
    
    Stock Options, Performance Shares, Other Forms of Compensation, and Common Share
Repurchases (continued)
    Board of Directors Compensation
   Common Share Repurchases
  -10-




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 (6)
    
    Retirement Savings Plans
 401(k) Plan
  Non-Qualified Deferred Compensation Plan
     -11-




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 (7) Acquisition of Florence, Kentucky Restaurant
  (8) Supplemental Cash Flow Information
 Three Months EndedApril 1,
    
    
    April 2,(in thousands)
    
    2007
    
    
    2006Cash paid for interest
    
    $
    364
    
    
    $
    433Cash paid for taxes
    
    $
    140
    
    
    $
    205Non-cash investing and financing activities:Reclassification of other current assets to assets held for sale
    
    $
    
    
    
    $
    963Reclassification of other current liabilities to assets held
for sale
    
    $
    5
    
    
    $
    Accrue property and equipment purchases
    
    $
    505
    
    
    $
    46Reclassification of additional-paid-in-capital to payroll taxes
payable for performance shares issued
    
    $
    153
    
    
    $
    Deferred tax asset related to tax benefit of stock options
exercised
    
    $
    (59
    )
    
    $
    (7
    )Issuance of common stock to independent board members
    
    $
    478
    
    
    $
    
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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 (9) Income Taxes  Adoption of Financial Interpretation (FIN) No. 48
 Accounting
for Uncertainty in Income Taxes an Interpretation of FASB Statement No. 109. Accounting for Income
Taxes.
 Accounting for
Contingencies
    (10) Recent Accounting Pronoucements
 The Fair Value Option for Financial Assets
and Financial Liabilities  Including an Amendment of SFAS No. 115.
 Fair Value Measurements
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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 
 Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 OVERVIEW
  Fiscal Year
 st
 Revenue
  Costs and Expenses
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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 General and Administrative Expenses
  (3)
 FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
OPERATING RESULTS
 Three Months EndedApril 1,
    
    April 2,2007
    
    2006Food and beverage costs (1)
    
    
    30.5
    %
    
    
    30.2
    %Labor and benefits costs (1)
    
    
    30.0
    %
    
    
    31.0
    %Operating expenses (1)
    
    
    24.8
    %
    
    
    25.8
    %Depreciation & amortization (restaurant level)(1)
    
    
    4.1
    %
    
    
    4.4
    %Depreciation & amortization (corporate level) (2)
    
    
    0.4
    %
    
    
    0.4
    %General and administrative expenses (2)
    
    
    14.2
    %
    
    
    14.8
    %Pre-opening expenses & loss on disposal of property
(1)
    
    
    0.1
    %
    
    
    0.8
    %Total costs and expenses (2)
    
    
    91.6
    %
    
    
    94.2
    %Income from operations (2)
    
    
    8.4
    %
    
    
    5.8
    %
 
 (1)
    
    As a percentage of restaurant sales, net(2)
    
    As a percentage of total revenue(3)
    
    Data regarding our restaurant operations as presented in the table, includes sales,
costs and expenses associated with our Rib Team, which netted a loss of $12,000 and $16,000 for the first quarter of fiscal 2007 and fiscal 2006,
respectively. Our Rib Team travels around the country introducing people to our brand of
barbeque, building brand awareness.  Total Revenue
  -15-




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 Restaurant Sales, net
  Franchise-Related Revenue
  Licensing and Other Revenue
  Same Store Net Sales
   -16-




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 Average Weekly Net Sales and Operating Weeks
  Three Months EndedApril 1,
    
    April 2,2007
    
    2006Average Weekly Net Sales:Company-Owned
    
    $
    46,794
    
    
    $
    44,953Full-Service
    
    $
    48,879
    
    
    $
    46,671Counter-Service
    
    $
    34,632
    
    
    $
    35,323Franchise-Operated
    
    $
    56,118
    
    
    $
    57,781Operating
Weeks:Company-Owned
    
    
    533
    
    
    
    515Franchise-Operated
    
    
    1,326
    
    
    
    1,109
  Food and Beverage Costs
   Labor and Benefits Costs
  Operating Expenses
  -17-




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
  Depreciation and Amortization
  Pre-opening Expenses
  General and Administrative Expenses
  Loss on Early Extinguishment of Debt
  Interest Expense
  Interest Income
  -18-




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
  Other Income (Expense), net
  Income Taxes  Adoption of Financial Interpretation (FIN) No. 48
 Accounting
for Uncertainty in Income Taxes an Interpretation of FASB Statement No. 109. Accounting for Income
Taxes.
 Accounting for
Contingencies
    Provision for Income Taxes
  -19-




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
  Basic and Diluted Net Income Per Common Share
  Financial Condition, Liquidity and Capital Resources
       -20-




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
       Off-Balance Sheet Arrangements
  Contractual Obligations
  -21-




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
  Critical Accounting Policies
  Forward-Looking Information
    Additional Information on Famous Daves
  -22-




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 http://www.sec.gov
  www.famousdaves.com
 
 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    -23-




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 
 Item 4. CONTROLS AND PROCEDURES
   -24-




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 
 PART II. OTHER INFORMATION
 
 Item 1. LEGAL PROCEEDINGS
  
 Item 2. PURCHASES OF EQUITY SECURITIES BY THE ISSUER
    Maximum NumberTotal Number of
    
    (or ApproximateShares
    
    Dollar Value) of(or Units)
    
    SharesAverage Price Paid
    
    Purchased as Part
    
    (or Units)Total Number of
    
    per
    
    of Publicly
    
    that May Yet beShares
    
    Share(1)
    
    Announced Plans or
    
    Purchased Under thePeriod
    
    (or Units) Purchased
    
    (or Unit)
    
    Programs
    
    Plans or ProgramsMonth #1
(January 1, 2007  January 28, 2007)
    
    
    
    
    
    $
    N/A
    
    
    
    611,430
    
    
    
    388,570Month #2
(January 29, 2007  February 25,
2007)
    
    
    
    
    
    $
    N/A
    
    
    
    611,430
    
    
    
    388,570Month #3
(February 26, 2007  April 1, 2007)
    
    
    65,400
    
    
    $
    18.08
    
    
    
    676,830
    
    
    
    323,170
 
 (1)
    
    Excluding Commissions -25-




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 
 Item 6. EXHIBITS
 31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Chief Executive Officer and Chief Financial Officer pursuant
to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
 -26-




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 
 SIGNATURES
  FAMOUS DAVES OF AMERICA, INC.
(Registrant)Dated: May 11, 2007
    By:
    /s/ David GoronkinDavid GoronkinPresident and Chief Executive Officer
(Principal Executive Officer)Dated: May 11, 2007
    
    /s/ Diana Garvis PurcelDiana Garvis PurcelChief Financial Officer and Secretary
(Principal Financial and Accounting Officer) 27