##### 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 October 1, 2006
 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
    
    41-1782300(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 12701 Whitewater Drive, Suite 200
Minnetonka, MN 55343
 (952) 294-1300
 þ o
  o þ o
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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC.
TABLE OF CONTENTS
 PagePART I
    
    FINANCIAL INFORMATIONItem 1
    
    Consolidated Financial StatementsConsolidated Balance Sheets
As of October 1, 2006 and January 1, 2006
    
    
    3Consolidated Statements of Income
For the three and nine months ended October 1, 2006 and
October 2, 2005
    
    
    4Consolidated Statements of Cash Flows
For the nine months ended October 1, 2006 and October 2,
2005
    
    
    5Notes to Consolidated Financial Statements
    
    
    6Item 2
    
    Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    17Item 3
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    29Item 4
    
    Controls and Procedures
    
    
    30PART II
    
    OTHER INFORMATIONItem 1
    
    Legal Proceedings
    
    
    30Item 2
    
    Purchases of Equity Securities by the Issuer
    
    
    30Item 5
    
    Other Information
    
    
    31Item 6
    
    Exhibits
    
    
    31SIGNATURESEXHIBIT INDEXCERTIFICATIONSAmendment to Employee Stock Option and Compensation PlanCertificationCertificationCertification
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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
OCTOBER 1, 2006 AND JANUARY 1, 2006  (in thousands, except share and per-share data)
 October 1,
    
    
    January 1,2006
    
    
    2006(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    3,878
    
    
    $
    4,410Restricted cash
    
    
    614
    
    
    
    1,221Accounts receivable, net
    
    
    2,601
    
    
    
    2,843Inventories
    
    
    1,692
    
    
    
    1,588Deferred tax asset
    
    
    1,619
    
    
    
    3,120Prepaid expenses and other current assets
    
    
    1,366
    
    
    
    2,312Total current assets
    
    
    11,770
    
    
    
    15,494Property, equipment and leasehold improvements, net
    
    
    49,088
    
    
    
    46,872Other assets:Notes receivable, less current portion
    
    
    1,621
    
    
    
    1,719Deferred tax asset, less current portion
    
    
    2,632
    
    
    
    2,632Other assets
    
    
    693
    
    
    
    881$
    65,804
    
    
    $
    67,598LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Line of credit
    
    $
    
    
    
    $
    Current portion of long-term debt and capital leases
    
    
    298
    
    
    
    438Accounts payable
    
    
    4,166
    
    
    
    3,811Accrued compensation and benefits
    
    
    3,245
    
    
    
    2,203Other current liabilities
    
    
    2,997
    
    
    
    3,410Total current liabilities
    
    
    10,706
    
    
    
    9,862Long-term liabilities:Long-term debt, less current portion
    
    
    8,189
    
    
    
    11,430Financing leases
    
    
    4,500
    
    
    
    4,500Other liabilities
    
    
    4,199
    
    
    
    3,918Total liabilities
    
    
    27,594
    
    
    
    29,710Shareholders equity:Common stock, $.01 par value, 100,000,000 shares authorized,
10,343,000 and 10,599,000 shares issued and outstanding at
October 1, 2006 and January 1, 2006, respectively
    
    
    103
    
    
    
    106Additional paid-in capital
    
    
    36,297
    
    
    
    39,835Retained earnings (accumulated deficit)
    
    
    1,810
    
    
    
    (2,053
    )Total shareholders equity
    
    
    38,210
    
    
    
    37,888$
    65,804
    
    
    $
    67,598
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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
OCTOBER 1, 2006 AND OCTOBER 2, 2005  (in thousands, except share and per share data)
(Unaudited)
 Three Months Ended
    
    
    Nine Months EndedOctober 1,
    
    
    October 2,
    
    
    October 1,
    
    
    October 2,2006
    
    
    2005
    
    
    2006
    
    
    2005Revenue:Restaurant sales, net
    
    $
    26,476
    
    
    $
    22,941
    
    
    $
    76,164
    
    
    $
    68,152Franchise royalty revenue
    
    
    3,613
    
    
    
    2,770
    
    
    
    10,323
    
    
    
    7,682Franchise fee revenue
    
    
    524
    
    
    
    360
    
    
    
    1,490
    
    
    
    1,135Licensing and other revenue
    
    
    199
    
    
    
    197
    
    
    
    663
    
    
    
    861Total revenue
    
    
    30,812
    
    
    
    26,268
    
    
    
    88,640
    
    
    
    77,830Costs and expenses:Food and beverage costs
    
    
    8,034
    
    
    
    7,029
    
    
    
    23,070
    
    
    
    20,888Labor and benefits
    
    
    8,003
    
    
    
    6,758
    
    
    
    22,567
    
    
    
    19,843Operating expenses
    
    
    6,382
    
    
    
    5,540
    
    
    
    19,011
    
    
    
    16,465Depreciation and amortization
    
    
    1,099
    
    
    
    1,055
    
    
    
    3,289
    
    
    
    3,269General and administrative
    
    
    3,967
    
    
    
    3,405
    
    
    
    11,662
    
    
    
    10,248Asset impairment and estimated
lease termination and other
closing costs
    
    
    332
    
    
    
    
    
    
    
    1,116
    
    
    
    Pre-opening expenses
    
    
    49
    
    
    
    
    
    
    
    448
    
    
    
    Loss on disposal
    
    
    50
    
    
    
    23
    
    
    
    64
    
    
    
    29Total costs and expenses
    
    
    27,916
    
    
    
    23,810
    
    
    
    81,227
    
    
    
    70,742Income from operations
    
    
    2,896
    
    
    
    2,458
    
    
    
    7,413
    
    
    
    7,088Other income (expense):Loss on early extinguishment
of debt
    
    
    
    
    
    
    
    
    
    
    (148
    )
    
    
    Interest expense
    
    
    (417
    )
    
    
    (462
    )
    
    
    (1,349
    )
    
    
    (1,415
    )Interest income
    
    
    83
    
    
    
    54
    
    
    
    278
    
    
    
    205Other income (expense), net
    
    
    5
    
    
    
    (62
    )
    
    
    (41
    )
    
    
    (59
    )Total other expense
    
    
    (329
    )
    
    
    (470
    )
    
    
    (1,260
    )
    
    
    (1,269
    )Income before income taxes
    
    
    2,567
    
    
    
    1,988
    
    
    
    6,153
    
    
    
    5,819Income tax expense
    
    
    (970
    )
    
    
    (760
    )
    
    
    (2,290
    )
    
    
    (2,213
    )Net income
    
    $
    1,597
    
    
    $
    1,228
    
    
    $
    3,863
    
    
    $
    3,606Basic net income per
common share
    
    $
    0.15
    
    
    $
    0.12
    
    
    $
    0.37
    
    
    $
    0.33Diluted net income per
common share
    
    $
    0.15
    
    
    $
    0.11
    
    
    $
    0.35
    
    
    $
    0.32Weighted average common shares
outstanding  basic
    
    
    10,438,000
    
    
    
    10,554,000
    
    
    
    10,539,000
    
    
    
    10,905,000Weighted average common shares
outstanding  diluted
    
    
    10,778,000
    
    
    
    10,879,000
    
    
    
    10,888,000
    
    
    
    11,254,000
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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
OCTOBER 1, 2006 AND OCTOBER 2, 2005  (in thousands)
(Unaudited)
 Nine Months EndedOctober 1,
    
    
    October 2,2006
    
    
    2005Cash flows from operating activities:Net income
    
    $
    3,863
    
    
    $
    3,606Adjustments to reconcile net income to cash flows provided by operations:Depreciation and amortization
    
    
    3,289
    
    
    
    3,269Amortization of deferred financing costs
    
    
    43
    
    
    
    47Loss on early extinguishment of debt
    
    
    148
    
    
    
    Loss on disposal of property
    
    
    64
    
    
    
    29Asset impairment and estimated lease termination and other closing costs
    
    
    1,116
    
    
    
    Deferred income taxes
    
    
    1,501
    
    
    
    1,993Deferred rent
    
    
    388
    
    
    
    690Stock-based compensation
    
    
    1,096
    
    
    
    453Changes in operating assets and liabilities:Restricted cash
    
    
    607
    
    
    
    (1,079
    )Accounts receivable, net
    
    
    64
    
    
    
    (581
    )Inventories
    
    
    (104
    )
    
    
    (21
    )Prepaid expenses and other current assets
    
    
    126
    
    
    
    285Accounts payable
    
    
    (58
    )
    
    
    (909
    )Accrued compensation and benefits
    
    
    1,017
    
    
    
    157Other current liabilities
    
    
    (28
    )
    
    
    378Cash flows provided by operations
    
    
    13,132
    
    
    
    8,317Cash flows from investing activities:Purchases of property, equipment and leasehold improvements
    
    
    (5,808
    )
    
    
    (5,092
    )Proceeds from sale of land and building
    
    
    
    
    
    
    525Payments received on notes receivable
    
    
    171
    
    
    
    405Cash flows used for investing activities
    
    
    (5,637
    )
    
    
    (4,162
    )Cash flows from financing activities:Payments for debt issuance costs
    
    
    (34
    )
    
    
    (85
    )Payments on long-term debt and capital lease obligations
    
    
    (3,381
    )
    
    
    (363
    )Proceeds from exercise of stock options
    
    
    653
    
    
    
    830Repurchase of common stock
    
    
    (5,265
    )
    
    
    (11,529
    )Cash flows used for financing activities
    
    
    (8,027
    )
    
    
    (11,147
    )Decrease in cash and cash equivalents
    
    
    (532
    )
    
    
    (6,992
    )Cash and cash equivalents, beginning of period
    
    
    4,410
    
    
    
    11,170Cash and cash equivalents, end of period
    
    $
    3,878
    
    
    $
    4,178
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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 (1)
    
    Basis of Presentation
  Form
10-K
 Share-Based Payment, an amendment of SFAS No. 123 and 95 Accounting for Stock Issued to
Employees
  (2)
    
    Net Income Per Common Share
  -6-




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (2)
    
    Net Income Per Common Share (continued)
  Three Months Ended
    
    
    Nine Months EndedOctober 1,
    
    
    October 2,
    
    
    October 1,
    
    
    October 2,(in thousands, except per-share data)
    
    2006
    
    
    2005
    
    
    2006
    
    
    2005Net income per common share  basic:Net income
    
    $
    1,597
    
    
    $
    1,228
    
    
    $
    3,863
    
    
    $
    3,606Weighted average shares outstanding
    
    
    10,438
    
    
    
    10,554
    
    
    
    10,539
    
    
    
    10,905Net income per common share  basic
    
    $
    0.15
    
    
    $
    0.12
    
    
    $
    0.37
    
    
    $
    0.33Net income per common share  diluted:Net income
    
    $
    1,597
    
    
    $
    1,228
    
    
    $
    3,863
    
    
    $
    3,606Weighted average shares outstanding
    
    
    10,438
    
    
    
    10,554
    
    
    
    10,539
    
    
    
    10,905Dilutive impact of common stock
equivalents outstanding
    
    
    340
    
    
    
    325
    
    
    
    349
    
    
    
    349Adjusted weighted average shares outstanding
    
    
    10,778
    
    
    
    10,879
    
    
    
    10,888
    
    
    
    11,254Net income per common share  diluted
    
    $
    0.15
    
    
    $
    0.11
    
    
    $
    0.35
    
    
    $
    0.32
  (3)
    
    Public Relations and Marketing Development Fund and Restricted Cash
   -7-




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (4)
    
    Credit Facility
 Amended and Restated Credit Agreement
      (5)
    
    Stock-Based Compensation
 SFAS No. 123R Impact
  -8-




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (5)
    
    Stock-Based Compensation (continued)
      -9-




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (5)
    
    Stock-Based Compensation (continued)
  Weighted Average(number of options in thousands)
    
    Number of Options
    
    
    Exercise PriceOutstanding at January 1, 2006
    
    
    900
    
    
    $
    5.14Granted
    
    
    
    
    
    
    Exercised
    
    
    (10
    )
    
    
    4.07Canceled or expired
    
    
    (23
    )
    
    
    7.37Outstanding at April 2, 2006
    
    
    867
    
    
    $
    5.10Granted
    
    
    
    
    
    $
    Exercised
    
    
    (15
    )
    
    
    3.32Canceled or expired
    
    
    (20
    )
    
    
    4.65Outstanding at July 2, 2006
    
    
    832
    
    
    $
    5.14Granted
    
    
    
    
    
    $
    Exercised
    
    
    (62
    )
    
    
    4.91Canceled or expired
    
    
    
    
    
    
    Outstanding at October 1, 2006
    
    
    770
    
    
    $
    5.16Options Exercisable at October 1, 2006
    
    
    605
    
    
    $
    4.96
  (number outstanding and number exercisable in thousands)
 OptionsTotal outstanding
    
    
    ExercisableWeighted-average
    
    
    
    
    
    
    
    
    
    
    Weighted-Exercise
    
    Number
    
    
    remaining
    
    
    Weighted-average
    
    
    Number
    
    
    averageprices
    
    outstanding
    
    
    contractual life
    
    
    exercise price
    
    
    exercisable
    
    
    exercise price$2.00  $2.38
    
    
    41
    
    
    2.47 years
    
    $
    2.17
    
    
    
    41
    
    
    $
    2.17$3.09  $4.18
    
    
    319
    
    
    5.95 years
    
    $
    3.97
    
    
    
    319
    
    
    $
    3.97$4.82  $6.72
    
    
    364
    
    
    7.14 years
    
    $
    5.96
    
    
    
    199
    
    
    $
    6.03$8.06  $10.98
    
    
    46
    
    
    6.08 years
    
    $
    9.66
    
    
    
    46
    
    
    $
    9.66$2.00  $10.98
    
    
    770
    
    
    6.33 years
    
    $
    5.16
    
    
    
    605
    
    
    $
    4.96
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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (5)
    
    Stock-Based Compensation (continued)
  Three Months
    
    
    Nine MonthsEnded
    
    
    Ended(in thousands, except per share data)
    
    October 2, 2005
    
    
    October 2, 2005Net income as reported
    
    $
    1,228
    
    
    $
    3,606Less: Compensation expense determined
under the fair value method, net of tax
    
    
    (101
    )
    
    
    (323
    )Pro forma net income
    
    $
    1,127
    
    
    $
    3,283Net income per common share:Basic EPS as reported
    
    $
    0.12
    
    
    $
    0.33Basic EPS pro forma
    
    $
    0.11
    
    
    $
    0.30Diluted EPS as reported
    
    $
    0.11
    
    
    $
    0.32Diluted EPS pro forma
    
    $
    0.10
    
    
    $
    0.29
  Performance Shares
    -11-




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (5) Stock-Based Compensation (continued)
     Deferred Stock Unit Plan
   -12-




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (5) Stock-Based Compensation (continued)
 Board of Directors Compensation
  (6) Retirement Savings Plans
 401(k) Plan
  Non-Qualified Deferred Compensation Plan
    -13-




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (6) Retirement Savings Plans (continued)
  (7) Common Share Repurchases
   (8) Acquisition of Florence, Kentucky Restaurant
  (9) Repayment of Notes Payable
  -14-




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (10) Asset Impairment and Estimated Lease Termination and Other Closing Costs
   (11) Supplemental Cash Flow Information
 Nine Months Ended(in thousands)
    
    October 1, 2006
    
    October 2, 2005Cash paid for interest
    
    $
    1,229
    
    
    $
    1,286Cash paid for taxes
    
    $
    704
    
    
    $
    406Non-cash investing and financing activities:Reclassification of other current assets to
assets held for sale
    
    $
    776
    
    
    $
    Reclassification of accounts receivable to
assets held for sale
    
    $
    178
    
    
    $
    508Reclassification of other current
liabilities to assets held for sale
    
    $
    13
    
    
    $
    Accrue property and equipment purchases
    
    $
    398
    
    
    $
    Deferred tax asset related to tax benefit
of stock options exercised
    
    $
    258
    
    
    $
    220Issuance of common stock to independent
board members
    
    $
    303
    
    
    $
    
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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (12) Recent Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes an Interpretation of FASB Statement No. 109. Accounting for Income
Taxes.
 Considering
the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial
Statements.
   -16-




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##### Table of Contents



FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
 Item 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 OVERVIEW
  Fiscal Year
 st
 Revenue
  Costs and Expenses
  -17-




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 General and Administrative Expenses
  (3)
 Three Months Ended
    
    Nine Months EndedOctober 1,
    
    October 2,
    
    October 1,
    
    October 2,2006
    
    2005
    
    2006
    
    2005Food and beverage costs (1)
    
    
    30.3
    %
    
    
    30.6
    %
    
    
    30.3
    %
    
    
    30.7
    %Labor and benefits (1)
    
    
    30.2
    %
    
    
    29.5
    %
    
    
    29.6
    %
    
    
    29.1
    %Operating expenses (1)
    
    
    24.1
    %
    
    
    24.2
    %
    
    
    25.0
    %
    
    
    24.2
    %Depreciation & amortization (restaurant level) (1)
    
    
    3.7
    %
    
    
    4.2
    %
    
    
    3.8
    %
    
    
    4.4
    %Depreciation & amortization (corporate level) (2)
    
    
    0.4
    %
    
    
    0.4
    %
    
    
    0.4
    %
    
    
    0.4
    %General and administrative (2)
    
    
    12.9
    %
    
    
    13.0
    %
    
    
    13.2
    %
    
    
    13.2
    %Asset impairment and estimated lease termination
and other closing costs(1)
    
    1.3
    %
    
    
    
    
    
    
    1.5
    %
    
    
    Pre-opening expenses & loss on disposal (1)
    
    
    0.4
    %
    
    
    
    
    
    
    0.7
    %
    
    
    Total costs and expenses (2)
    
    
    90.0
    %
    
    
    88.5
    %
    
    
    90.9
    %
    
    
    88.3
    %Income from operations (2)
    
    
    9.4
    %
    
    
    9.4
    %
    
    
    8.4
    %
    
    
    9.1
    %
 
 (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 to income of $25,000 and a loss of
$13,000 for the three months ended October 1, 2006 and October 2, 2005, respectively. The Rib Team
netted to income of $2,000 and a loss of $28,000 for the nine months ended October 1, 2006 and
October 2, 2005, respectively. Our Rib Team travels around the country introducing people to our
brand of barbeque and builds in brand awareness.  Total Revenue
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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Restaurant Sales, net
  Franchise-Related Revenue
  Licensing and Other Revenue
  Same Store Net Sales
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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
   Average Weekly Net Sales and Operating Weeks
  Three Months Ended
    
    Nine Months EndedOctober 1,
    
    October 2,
   
    October 1,
   
    October 2,2006
    
    2005
    
2006
    
    2005Company-Owned Average WeeklyNet
Sales
    
    $
    50,285
    
    
    $
    46,385
    
    
    $
    48,625
    
    
    $
    45,894Full-Service
    
    $
    51,743
    
    
    $
    47,058
    
    
    $
    43,566
    
    
    $
    46,925Counter-Service
    
    $
    41,972
    
    
    $
    43,338
    
    
    $
    49,698
    
    
    $
    41,293Franchise-Operated Average WeeklyNet Sales
    
    $
    59,502
    
    
    $
    55,648
    
    
    $
    59,694
    
    
    $
    55,899Company-Owned Operating Weeks
    
    
    523
    
    
    
    492
    
    
    
    1,560
    
    
    
    1,480Franchise-Operated Operating Weeks
    
    
    1,240
    
    
    
    1,005
    
    
    
    3,535
    
    
    
    2,809
 Food and Beverage Costs
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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Labor and Benefits
  Operating Expenses
  Depreciation and Amortization
  General and Administrative Expenses
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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Asset Impairment and Estimated Lease Termination and Other Closing Costs
  Pre-opening Expenses
  Loss on Early Extinguishment of Debt
  Interest Expense
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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Interest Income
  Other Income (Expense), net
  Income Tax Provision
  Basic and Diluted Net Income Per Common Share
   Financial Condition, Liquidity and Capital Resources
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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
       Off-Balance Sheet Arrangements
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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Critical Accounting Policies
  Recent Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes  an Interpretation of FASB Statement No. 109. Accounting for Income
Taxes.
 Considering
the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial
Statements.
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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Forward-Looking Information
    Additional Information on Famous Daves
 http://www.sec.gov
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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 www.famousdaves.com
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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 
 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 
 Item 4. CONTROLS AND PROCEDURES
   
 PART II. OTHER INFORMATION
 
 Item 1. LEGAL PROCEEDINGS
  
 Item 2. PURCHASES OF EQUITY SECURITIES BY THE ISSUER
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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 Item 2. PURCHASES OF EQUITY SECURITIES BY THE ISSUER (continued)
  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 #7
(July 3, 2006  July 30, 2006)
    
    
    
    $  N/A
    
    
    
    841,400Month #8
(July 31, 2006  August 27, 2006)
    
    80,430
    
    $13.44
    
    239,030
    
    760,970Month #9
(August 28, 2006  October 1, 2006)
    
    123,300
    
    $14.79
    
    362,330
    
    637,670
 
 (1)
    
    Excluding Commissions 
 Item 5. OTHER INFORMATION
  
 Item 6. EXHIBITS
 10.1
    
    Amended and Restated Credit Agreement by and between Wells Fargo Bank,
National Association and Famous Daves of America, Inc., dated July 31, 2006,
incorporated by reference to Exhibit 10.1 to Form 8-K filed
August 2, 2006.10.2
    
    Amendment to 1995 Employee Stock Option and Compensation Plan.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.
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SIGNATURES
  FAMOUS DAVES OF AMERICA, INC.(Registrant)Dated:  November 9, 2006
    By:
    /s/ David GoronkinDavid GoronkinChief Executive Officer and President
(Principal Executive Officer)Dated:  November 9, 2006
    
    /s/ Diana Garvis PurcelDiana Garvis PurcelChief Financial Officer and Secretary
(Principal Financial and Accounting Officer)




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EXHIBIT INDEX
 Exhibit No.
    
    Description of Exhibit10.2
    
    
    Amendment to 1995 Employee Stock Option and Compensation Plan31.1
    
    
    Certification of Chief Executive Officer31.2
    
    
    Certification of Chief Financial Officer32.1
    
    
    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