##### 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 March 30, 2008
 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
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company) o þ




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##### 



FAMOUS DAVES OF AMERICA, INC.
TABLE OF CONTENTS
 PagePART I FINANCIAL INFORMATIONItem 1 Consolidated Financial StatementsConsolidated Balance Sheets As of March 30, 2008 and December 30, 2007
    
    
    3Consolidated Statements of Operations For the three months ended March 30, 2008 and April 1, 2007
    
    
    4Consolidated Statements of Cash Flows For the three months ended March 30, 2008 and April 1, 2007
    
    
    5Notes to Consolidated Financial Statements
    
    
    6Item 2 Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 3 Quantitative and Qualitative Disclosures About Market Risk
    
    
    24Item 4 Controls and Procedures
    
    
    25PART II OTHER INFORMATIONItem 1 Legal Proceedings
    
    
    26Item 2 Purchases of Equity Securities by the Issuer
    
    
    26Item 6 Exhibits
    
    
    27SIGNATURESCERTIFICATIONSEmployee Stock Purchase PlanCertification of Chief Executive Officer pursuant to Section 302Certification of Chief Financial Officer pursuant to Section 302Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 MARCH 30, 2008 AND DECEMBER 30, 2007
 (in thousands, except share and per-share data)
 March 30,
    
    
    December 30,2008
    
    
    2007(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    2,034
    
    
    $
    1,538Restricted cash
    
    
    1,216
    
    
    
    2,420Accounts receivable, net
    
    
    4,233
    
    
    
    5,098Inventories
    
    
    2,019
    
    
    
    1,987Deferred tax asset
    
    
    1,643
    
    
    
    1,643Prepaid expenses and other current assets
    
    
    1,190
    
    
    
    1,477Notes receivable
    
    
    75
    
    
    
    92Total current assets
    
    
    12,410
    
    
    
    14,255Property, equipment and leasehold improvements, net
    
    
    57,521
    
    
    
    57,243Other assets:Notes receivable, less current portion
    
    
    1,146
    
    
    
    1,165Deferred tax asset, less current portion
    
    
    511
    
    
    
    511Other assets
    
    
    784
    
    
    
    768$
    72,372
    
    
    $
    73,942LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Line of credit
    
    $
    12,500
    
    
    
    13,000Current portion of long-term debt
    
    
    278
    
    
    
    270Accounts payable
    
    
    5,591
    
    
    
    6,647Accrued compensation and benefits
    
    
    3,085
    
    
    
    3,011Other current liabilities
    
    
    4,251
    
    
    
    5,157Total current liabilities
    
    
    25,705
    
    
    
    28,085Long-term liabilities:Long-term debt, less current portion
    
    
    6,826
    
    
    
    6,899Financing leases
    
    
    4,791
    
    
    
    4,794Other liabilities
    
    
    3,867
    
    
    
    3,764Total liabilities
    
    
    41,189
    
    
    
    43,542Shareholders equity:Common stock, $.01 par value, 100,000,000 shares authorized 9,650,000 and 9,606,000 shares
issued and outstanding at
March 30, 2008 and December 30, 2007, respectively
    
    
    96
    
    
    
    96Additional paid-in capital
    
    
    20,976
    
    
    
    21,028Retained earnings
    
    
    10,111
    
    
    
    9,276Total shareholders equity
    
    
    31,183
    
    
    
    30,400$
    72,372
    
    
    $
    73,942
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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 MARCH 30, 2008 AND APRIL 1, 2007
 (in thousands, except share and per share data)
 (Unaudited)
 Three Months EndedMarch 30,
    
    
    April 1,2008
    
    
    2007Revenue:Restaurant sales, net
    
    $
    29,247
    
    
    $
    24,941Franchise royalty revenue
    
    
    4,167
    
    
    
    3,649Franchise fee revenue
    
    
    115
    
    
    
    315Licensing and other revenue
    
    
    186
    
    
    
    98Total revenue
    
    
    33,715
    
    
    
    29,003Costs and expenses:Food and beverage costs
    
    
    8,939
    
    
    
    7,611Labor and benefits
    
    
    9,182
    
    
    
    7,480Operating expenses
    
    
    7,493
    
    
    
    6,193Depreciation and amortization
    
    
    1,461
    
    
    
    1,155General and administrative
    
    
    4,653
    
    
    
    4,123Pre-opening expenses
    
    
    254
    
    
    
    6(Gain) loss on disposal of property
    
    
    (6
    )
    
    
    18Total costs and expenses
    
    
    31,976
    
    
    
    26,586Income from operations
    
    
    1,739
    
    
    
    2,417Other expense:Loss on early extinguishment of debt
    
    
    
    
    
    
    (12
    )Interest expense
    
    
    (511
    )
    
    
    (363
    )Interest income
    
    
    58
    
    
    
    76Other (expense) income, net
    
    
    (1
    )
    
    
    4Total other expense
    
    
    (454
    )
    
    
    (295
    )Income before income taxes
    
    
    1,285
    
    
    
    2,122Income tax expense
    
    
    (450
    )
    
    
    (720
    )Net income
    
    $
    835
    
    
    $
    1,402Basic net income per common share
    
    $
    0.09
    
    
    $
    0.14Diluted net income per common share
    
    $
    0.09
    
    
    $
    0.13Weighted average common shares outstanding  basic
    
    
    9,611,000
    
    
    
    10,130,000Weighted average common shares outstanding  diluted
    
    
    9,773,000
    
    
    
    10,492,000
  - 4 -




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 MARCH 30, 2008 and APRIL 1, 2007
 (in thousands)
 (Unaudited)
 Three Months EndedMarch 30,
    
    
    April 1,2008
    
    
    2007Cash flows from operating activitiesNet income
    
    $
    835
    
    
    $
    1,402Adjustments to reconcile net income to cash flows provided by
operations:Depreciation and amortization
    
    
    1,461
    
    
    
    1,155Amortization of deferred financing costs
    
    
    14
    
    
    
    14Gain (loss) on disposal of property
    
    
    (6
    )
    
    
    18Loss on early extinguishment of debt
    
    
    
    
    
    
    12Deferred income taxes
    
    
    
    
    
    
    565Deferred rent
    
    
    120
    
    
    
    64Stock-based compensation
    
    
    281
    
    
    
    540Changes in operating assets and liabilities:Restricted cash
    
    
    1,204
    
    
    
    (619
    )Accounts receivable, net
    
    
    865
    
    
    
    328Inventories
    
    
    (32
    )
    
    
    49Prepaid expenses and other current assets
    
    
    287
    
    
    
    264Deposits
    
    
    (15
    )
    
    
    14Accounts payable
    
    
    (1,056
    )
    
    
    902Accrued compensation and benefits
    
    
    (103
    )
    
    
    (610
    )Other current liabilities
    
    
    (246
    )
    
    
    (38
    )Long-term deferred compensation
    
    
    (17
    )
    
    
    102Cash flows provided by operations
    
    
    3,592
    
    
    
    4,162Cash flows from investing activities:Purchases of property, equipment and leasehold improvements
    
    
    (2,368
    )
    
    
    (1,354
    )Payments received on notes receivable
    
    
    36
    
    
    
    51Cash flows used for investing activities
    
    
    (2,332
    )
    
    
    (1,303
    )Cash flows from financing activities:Payments for debt issuance costs
    
    
    (15
    )
    
    
    Proceeds from draws on line of credit
    
    
    5,500
    
    
    
    3,500Payments on line of credit
    
    
    (6,000
    )
    
    
    (2,500
    )Payments on long-term debt
    
    
    (93
    )
    
    
    (1,092
    )Proceeds from exercise of stock options
    
    
    
    
    
    
    102Tax benefit of stock-options exercised
    
    
    
    
    
    
    59Repurchase of common stock
    
    
    (156
    )
    
    
    (1,183
    )Cash flows used for financing activities
    
    
    (764
    )
    
    
    (1,114
    )Increase in cash and cash equivalents
    
    
    496
    
    
    
    1,745Cash and cash equivalents, beginning of period
    
    
    1,538
    
    
    
    1,455Cash and cash equivalents, end of period
    
    $
    2,034
    
    
    $
    3,200
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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (1) Basis of Presentation
    (2) Net Income Per Common Share
   (in thousands, except per share data)
    
    Three Months EndedMarch 30,
    
    
    April 1,2008
    
    
    2007Net income per common share  basic:Net income
    
    $
    835
    
    
    $
    1,402Weighted average shares outstanding
    
    
    9,611
    
    
    
    10,130Net income per common share  basic
    
    $
    0.09
    
    
    $
    0.14Net income per common share  diluted:Net income
    
    $
    835
    
    
    $
    1,402Weighted average shares outstanding
    
    
    9,611
    
    
    
    10,130Dilutive impact of common stock equivalents outstanding
    
    
    162
    
    
    
    362Adjusted weighted average shares outstanding
    
    
    9,773
    
    
    
    10,492Net income per common share  diluted
    
    $
    0.09
    
    
    $
    0.13
  - 6 -




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (3) Allowance for Doubtful Accounts
  (4) Public Relations and Marketing Development Fund and Restricted Cash
  (5) Credit Facility
     - 7 -




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (5) Credit Facility (continued)
   (6) Stock Options, Performance Shares, Other Forms of Compensation, and Common Share
Repurchases
 Stock-based Compensation
  (in thousands)
    
    Three Months EndedMarch 30,
    
    
    April 1,2008
    
    
    2007Performance Share Programs:Fiscal 2005 - 2007 (1)
    
    $
    
    
    
    $
    101Fiscal 2006 - 2008 (1)
    
    
    36
    
    
    
    68Fiscal 2007 - 2009 (1)
    
    
    87
    
    
    
    150Fiscal 2008 - 2010
    
    
    52
    
    
    
    Performance Shares
    
    $
    175
    
    
    $
    319Director Shares
    
    
    66
    
    
    
    119Stock Options (1)
    
    
    40
    
    
    
    102Deferred Stock Units
    
    
    
    
    
    
    (2
    )$
    281
    
    
    $
    538
 
 (1)
    
    In December 2007, our Chief Executive Officer ceased employment with the
Company. As a result, we adjusted our performance share expense under these programs and
stock option expense in the fourth quarter of fiscal 2007 to reflect the cancellation of
these unearned grants. We hired a new Chief Executive Officer and his employment
commenced on April 21, 2008, and at which time, performance share grants and a restricted
stock unit grant was made. See footnote (10) Subsequent Events.  - 8 -




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 (6) Stock Options, Performance Shares, Other Forms of Compensation, and Common Share
Repurchases (continued)
 Stock Options
  (number of options in thousands)
    
    Number of
    
    
    Weighted AverageOptions
    
    
    Exercise PriceOutstanding at December 30, 2007
    
    
    399
    
    
    $
    5.57Granted
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Canceled or expired
    
    
    
    
    
    
    Outstanding at March 30, 2008
    
    
    399
    
    
    $
    5.57Options Exercisable at March 30, 2008
    
    
    374
    
    
    $
    5.55
 Performance Shares
    - 9 -




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 (6) Stock Options, Performance Shares, Other Forms of Compensation, and Common Share
Repurchases (continued)
 Performance Shares
    
    Performance SharesPerformance
    
    Performance Shares
    
    (Outstanding assuming
    
    (Outstanding assumingAward Date
    
    Share Program
    
    (Originally Granted at 100%)
    
    100% Payout Achieved)(1)(2)
    
    200% Payout Achieved)(3)12/29/2005
    
    2006  2008
    
    
    83,200
    
    
    
    38,400
    
    
    
    76,8002/21/2007
    
    2007  2009
    
    
    96,100
    
    
    
    55,800
    
    
    
    111,60012/31/2007
    
    2008  2010
    
    
    45,700
    
    
    
    45,700
    
    
    
    91,400
 
 (1)
    
    Net of forfeitures due to employee departures(2)
    
    Based on 100% EPS goal achieved(3)
    
    Based on 150% EPS goal achieved  Deferred Stock Unit Plan
    - 10 -




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 (6) Stock Options, Performance Shares, Other Forms of Compensation, and Common Share
Repurchases (continued)
  Board of Directors Compensation
   Common Share Repurchases
   - 11 -




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 (7) Retirement Savings Plans
 401(k) Plan
  Non-Qualified Deferred Compensation Plan
     - 12 -




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 (8) Supplemental Cash Flow Information
 (in thousands)
    
    Three Months EndedMarch 30,
    
    
    April 1,2008
    
    
    2007Cash paid for interest
    
    $
    483
    
    
    $
    364Cash paid for taxes
    
    $
    8
    
    
    $
    140Non-cash investing and financing activities:Reclassification of other current liabilities to assets held for sale
    
    $
    
    
    
    $
    5Accrue property and equipment purchases
    
    $
    634
    
    
    $
    505Reclassification of additional-paid-in-capital to payroll taxes
payable for performance shares issued
    
    $
    177
    
    
    $
    153Deferred tax asset related to tax benefit of stock options exercised
    
    $
    
    
    
    $
    (59
    )Issuance of common stock to independent board members
    
    $
    266
    
    
    $
    478
 (9) Recent Accounting Pronouncements
 Business Combinations Noncontrolling Interest in Consolidated Financial Statements,
an amendment of ARB
 The Fair Value Option for
Financial Assets and Financial Liabilities  Including an Amendment of FASB Statement No. 115 (SFAS
159).
 Fair Value Measurements
 - 13 -




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 (10) Subsequent Events
 Amended Credit Agreement
    New President and CEO Equity Compensation
   - 14 -




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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
  - 15 -




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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 EndedMarch 20,
    
    
    April 1,2008
    
    
    2007Food and beverage costs (1)
    
    
    30.6
    %
    
    
    30.5
    %Labor and benefits (1)
    
    
    31.4
    %
    
    
    30.0
    %Operating expenses (1)
    
    
    25.6
    %
    
    
    24.8
    %Depreciation & amortization (restaurant level)(1)
    
    
    4.6
    %
    
    
    4.1
    %Depreciation & amortization (corporate level) (2)
    
    
    0.3
    %
    
    
    0.4
    %General and administrative (2)
    
    
    13.8
    %
    
    
    14.2
    %Pre-opening expenses & net (gain) loss
on disposal of property (1)
    
    
    0.9
    %
    
    
    0.1
    %Total costs and expenses (2)
    
    
    94.8
    %
    
    
    91.6
    %Income from operations (2)
    
    
    5.2
    %
    
    
    8.3
    %
 
 (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 $18,000 and $12,000 for the first quarter of fiscal 2008 and fiscal 2007,
respectively. Our Rib Team travels around the country introducing people to our brand of
barbeque, building brand awareness.  Total Revenue
  - 16 -




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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
    - 17 -




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
   Average Weekly Net Sales and Operating Weeks
  Three Months EndedMarch 30,
    
    
    April 1,2008
    
    
    2007Average Weekly Net Sales (AWS):Company-Owned
    
    $
    50,512
    
    
    $
    46,794Full-Service
    
    $
    52,844
    
    
    $
    48,879Counter-Service
    
    $
    35,534
    
    
    $
    34,632Franchise-Operated
    
    $
    55,684
    
    
    $
    56,018AWS 2005 and Post 2005:Company-Owned
    
    $
    68,065
    
    
    $
    69,192Franchise-Operated
    
    $
    63,297
    
    
    $
    66,315AWS Pre-2005: (1)Company-Owned
    
    $
    46,349
    
    
    $
    44,373Franchise-Operated
    
    $
    47,012
    
    
    $
    47,847
 
 (1)
    
    Provides further
delineation of AWS for restaurants
opened during the pre-fiscal 2005, and
restaurants opened during the
post-fiscal 2005, timeframes. Operating Weeks:Company-Owned
    
    
    579
    
    
    
    533Franchise-Operated
    
    
    1,538
    
    
    
    1,326
  Food and Beverage Costs
  - 18 -




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
  Labor and Benefits Costs
  Operating Expenses
  Depreciation and Amortization
  Pre-opening Expenses
  - 19 -




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
  General and Administrative Expenses
  Performance
    
    Restricted
    
    Board of Directors
    
    Unvested StockShares
    
    Stock Units
    
    Shares
    
    Options
    
    Total$800
    
    $
    130
    
    
    $
    265
    
    
    $
    85
    
    
    $
    1,280
  Loss on Early Extinguishment of Debt
  Interest Expense
  Interest Income
  Provision for Income Taxes
  - 20 -




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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
       - 21 -




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
        - 22 -




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 Off-Balance Sheet Arrangements
  Contractual Obligations
   Critical Accounting Policies
  Forward-Looking Information
    - 23 -




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 Additional Information on Famous Daves
 http://www.sec.gov
  www.famousdaves.com
 
 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    - 24 -




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
   
 Item 4. CONTROLS AND PROCEDURES
   - 25 -




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 
 PART II. OTHER INFORMATION
 
 Item 1. LEGAL PROCEEDINGS
  
 Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 Purchases of Equity Securities by the Issuer
    Total Number of Maximum NumberShares
    
    
    (or Approximate DollarTotal
    
    
    
    
    
    
    (or Units)
    
    
    Value) of SharesNumber of
    
    
    Average
    
    
    Purchased as Part
    
    
    (or Units)Shares
    
    
    Price Paid
    
    
    of Publicly
    
    
    that May Yet be(or Units)
    
    
    per Share(1)
    
    
    Announced Plans
    
    
    Purchased Under thePeriod
    
    Purchased
    
    
    (or Unit)
    
    
    or Programs
    
    
    Plans or ProgramsMonth #1
(December 31, 2007  January 27, 2008)
    
    
    -0-
    
    
    $
    
    
    
    
    -0-
    
    
    
    517,544Month #2
(January 28, 2008  February 24, 2008)
    
    
    -0-
    
    
    $
    
    
    
    
    -0-
    
    
    
    517,544Month #3
(February 25, 2008  March 30, 2008)
    
    
    16,000
    
    
    $
    9.73
    
    
    
    498,456
    
    
    
    501,544
 
 (1)
    
    Excluding Commissions - 26 -




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 
 Item 6. EXHIBITS
 10.1
    
    Employee Stock Purchase Plan Dated January 1, 200831.1
    
    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.
 - 27 -




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FAMOUS DAVES OF AMERICA, INC. AND SUBSIDIARIES
 
 SIGNATURES
  FAMOUS DAVES OF AMERICA, INC.
                 (Registrant)Dated:  May 9, 2008
    By:
    /s/ Wilson L. CraftWilson L. CraftPresident and Chief Executive Officer

(Principal Executive Officer)Dated:  May 9, 2008    
    /s/ Diana Garvis PurcelDiana Garvis PurcelChief Financial Officer and Secretary
(Principal Financial and Accounting Officer)