<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the quarterly period ended September 29, 1996
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from to
-------------------- ------------------
Commission file number 333-10675
--------------
FAMOUS DAVE'S OF AMERICA, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
<TABLE>
<S><C>
Minnesota 41-1782300
(State or other Jurisdiction of Incorporation or (I.R.S. Employer Identification No.)
Organization)
12700 Industrial Park Boulevard, Suite #60, Plymouth, MN 55441
(Address of Principal Executive Offices)
(612) 557-5798
(Issuer's Telephone Number, Including Area Code)
(Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report)
</TABLE>
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes No X
--- ---
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: At December 2, 1996 there
were 6,001,250 shares of common stock, $.01 par value, outstanding.
Page 1 of 13
<PAGE> 2
FAMOUS DAVE'S OF AMERICA, INC..
Form 10-QSB Index
September 29, 1996
Page Number
Part I: Financial Information
Item 1. Financial Statements 3
Condensed Consolidated Balance Sheets - 3
September 29, 1996 and December 31, 1995
Condensed Consolidated Statements of Operations - 4
for the thirteen weeks ended September 29, 1996 and
September 30, 1995, and the thirty-nine weeks ended
September 29, 1996 and September 30, 1995
Condensed Consolidated Statements of Cash Flows - 5
for the thirty-nine weeks ended September 29, 1996 and
September 30, 1995
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of 8
Financial Condition and Results of Operations
Part II: Other Information 12
Page 2 of 13
<PAGE> 3
FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 29, DECEMBER 31,
1996 1995
------------- ------------
ASSETS (UNAUDITED)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 2,030,701 $ 100,297
Inventories 149,103 10,921
Prepaids and other current assets 336,719 69,176
------------ ------------
Total current assets 2,516,523 180,394
------------ ------------
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET 3,970,561 1,203,265
------------ ------------
OTHER ASSETS:
Construction in progress 0 73,487
Prepaid equity issuance costs 59,328 0
Pre-opening expenses, net 160,013 0
------------ ------------
Total other assets 219,341 73,487
------------ ------------
$ 6,706,425 $ 1,457,146
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 625,429 $ 109,974
Note payable - stockholder 518,562 276,046
Current portion of capital lease obligation 141,961 0
Mortgage note payable - bank 0 347,823
Accrued rent - S&D Land Holdings, Inc. (related party) 37,035 0
Accrued interest - stockholder 5,334 0
Accrued payroll and related withholdings 48,583 13,412
Other current liabilities 133,472 16,081
------------ ------------
Total current liabilities 1,510,376 763,336
CAPITAL LEASE OBLIGATION, NET OF CURRENT PORTION 785,162 0
------------ ------------
Total liabilities 2,295,538 763,336
------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value, 100,000,000 shares authorized,
3,356,250 and 2,000,000 shares issued and outstanding 33,563 20,000
Additional paid-in capital 5,125,546 980,000
Accumulated deficit (748,222) (306,190)
------------ ------------
Total stockholders' equity 4,410,887 693,810
------------ ------------
$ 6,706,425 $ 1,457,146
============ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
Page 3 of 13
<PAGE> 4
FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
----------------------------- -------------------------------
SEPTEMBER 29, SEPTEMBER 30, SEPTEMBER 29, SEPTEMBER 30,
1996 1995 1996 1995
------------- ------------- ------------- -------------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
NET SALES $1,684,127 $252,104 $2,685,182 $275,705
---------- ---------- ----------- ----------
COSTS AND EXPENSES:
Food and beverage costs - restaurant 607,877 84,257 934,328 97,535
Restaurant operating expenses 707,478 137,359 1,100,106 183,350
Depreciation and amortization 64,765 5,800 92,052 7,800
---------- ---------- ----------- ----------
Total costs and expenses 1,380,120 227,416 2,126,486 288,685
---------- ---------- ----------- ----------
RESTAURANT OPERATING INCOME (LOSS) 304,007 24,688 558,696 (12,980)
---------- ---------- ----------- ----------
Other income (expense):
General, administrative and development (367,119) (33,123) (1,004,535) (90,163)
Royalty income - related party 23,895 25,235 40,910 25,235
Interest expense, net (14,612) 0 (37,103) 0
---------- ---------- ----------- ----------
Total other (expense) (357,836) (7,888) (1,000,728) (64,928)
---------- ---------- ----------- ----------
NET INCOME (LOSS) ($53,829) $16,800 ($442,032) ($77,908)
========== ========== =========== ==========
NET INCOME (LOSS) PER SHARE $ (0.02) $ 0.01 $ (0.18) $ (0.04)
========== ========== =========== ==========
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 3,136,673 2,135,417 2,510,712 2,135,417
========== ========== =========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
Page 4 of 13
<PAGE> 5
FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THIRTY-NINE WEEKS ENDED
SEPTEMBER 29, SEPTEMBER 30,
1996 1995
------------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (442,032) $ (77,908)
Adjustments to reconcile net loss to
cash flows from operating activities:
Depreciation and amortization 110,009 7,814
Changes in working capital items -
Inventories (138,182) (12,128)
Prepaids and other current assets (267,543) (43,554)
Accounts payable 515,455 17,001
Accrued rent - S&D Land Holdings, Inc. 37,035 0
Accrued interest - stockholder 5,334 0
Accrued payroll and related withholdings 35,171 1,824
Other current liabilities 117,391 12,120
----------- ---------
Cash flows from operating activities (27,362) (94,831)
----------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, equipment
and leasehold improvements (2,614,025) (778,407)
Payment of pre-opening expenses (182,144) 0
----------- ---------
Cash flows from investing activities (2,796,169) (778,407)
----------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds received on equity issuances 4,746,875 509,964
Advances on note payable, net - stockholder 675,716 0
Payments on capital lease financing (21,562) 0
Proceeds from mortgage note payable - bank 0 375,000
Prepaid equity issuance costs paid (647,094) 0
----------- ---------
Cash flows from financing activities 4,753,935 884,964
----------- ---------
INCREASE IN CASH AND CASH EQUIVALENTS 1,930,404 11,726
CASH AND CASH EQUIVALENTS, BEGINNING 100,297 10,623
----------- ---------
CASH AND CASH EQUIVALENTS, ENDING $ 2,030,701 $ 22,349
=========== =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
Page 5 of 13
<PAGE> 6
FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 29, 1996
(UNAUDITED)
(1) GENERAL
The primary business of Famous Dave's of America, Inc. (the "Company") is to
develop, own and operate American roadhouse-style barbeque restaurants under
the name "Famous Dave's BBQ Shack." The Company presently owns and operates
three restaurants, one located in the Linden Hills neighborhood of Minneapolis
(the "Linden Hills Unit"), one in Roseville, Minnesota (the "Roseville Unit")
and the third in Calhoun Square in Minneapolis (the "Calhoun Blues Joint" and,
collectively with the Linden Hills and Roseville Units, the "Existing Units").
The Calhoun Blues Joint opened in early September 1996 and features live blues
music during certain evenings and an authentic Chicago blues decor.
(2) BASIS OF FINANCIAL STATEMENT PRESENTATION
The accompanying unaudited condensed financial statements have been prepared
by the Company pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. Although management believes that the disclosures are adequate to
make the information presented not misleading, it is suggested that these
interim condensed financial statements be read in conjunction with the
Company's most recent audited financial statements and notes thereto. In the
opinion of management, all adjustments (which include only normal recurring
adjustments) necessary for a fair presentation of the financial position,
results of operations and cash flows for the interim periods presented have
been made. Operating results for the thirteen and thirty-nine weeks ended
September 29, 1996 are not necessarily indicative of the results that may be
expected for the fiscal year ending December 29, 1996.
Certain amounts in the fiscal 1995 financial statement have been
reclassified to conform to the fiscal 1996 presentation with no impact on
previously reported net loss or stockholders' equity.
(3) COMPLETED INITIAL PUBLIC STOCK OFFERING
In October 1996, the Company completed an initial public offering of
2,645,000 Units at an offering price of $6.50 per Unit, including 345,000 Units
from the exercise of the Underwriters' overallotment option which occurred in
November 1996. Each Unit consists of one share of Common Stock and one
Redeemable Class A Warrant. The Company received net proceeds of approximately
$15,250,000 after the payment of approximately $1,942,500 in related
underwriting discount and offering costs.
(4) PRIVATE PLACEMENT OF COMMON STOCK
In July 1996, the Company sold 1,356,250 shares of its common stock in a
private placement for $3.50 per share, and received net proceeds of
approximately $4,200,000. The Company has used and plans to use the net
proceeds from this private placement of common stock to complete the
development of its Units and for working capital.
Page 6 of 13
<PAGE> 7
FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 29, 1996
(UNAUDITED)
(5) INCOME (LOSS) PER COMMON SHARE
Income (loss) per common share is usually based on the weighted average
number of common shares outstanding during each period. However, pursuant to
certain rules of the Securities and Exchange Commission, the calculation also
includes equity securities, including options and warrants, issued within one
year of an initial public offering with an issue price less than the initial
public offering price, even if the effect is anti-dilutive. The treasury stock
approach was used in determining the dilutive effect of such issuances. Common
stock equivalents (other than those issued within one year of an initial public
offering with an issue price less than the initial public offering price)
including options and warrants are assumed to be exercised or converted into
common shares at the beginning of each period unless the aggregate effect of
such inclusion is anti-dilutive. Primary and fully diluted income (loss) per
share are the same.
(6) RELATED PARTY TRANSACTIONS AND SHAREHOLDER NOTES
S&D LAND HOLDINGS, INC. - On January 1, 1996, the Company transferred the
real estate, excluding improvements, of its Linden Hills Unit and the site of a
proposed Unit in St. Paul, Minnesota to its sole stockholder at the time in
exchange for amounts due to the stockholder and assumption of bank debt
totaling $781,023. The Company believes the exchange prices approximated the
fair market values of the real estate exchanged. The stockholder concurrently
transferred the real estate to S&D Land Holdings, Inc. (S&D), a company wholly
owned by the stockholder, and entered into leases with the Company for the real
estate. At September 29, 1996, the Company owed S&D $37,035 for unpaid rent
through September 29, 1996.
GRAND PINES RESORTS, INC. - Grand Pines Resorts, Inc. (Grand Pines), is a
company wholly owned by Mr. David W. Anderson, the founding stockholder of the
Company. The Company charges Grand Pines a royalty of 4% of its food sales.
The Company also provides certain management services to Grand Pines for 3% (4%
in 1995) of its food sales. Management services income is netted with general,
administrative and development expenses in the Company's consolidated
statements of operations.
NOTE PAYABLE - STOCKHOLDER - The Company has a $2,000,000 revolving note
with its founding stockholder. The note bears interest at 8%, is unsecured and
is due on demand. Outstanding balances on the note were $276,046 and $518,562
at December 31, 1995 and September 29, 1996. This balance was subsequently
paid in full in October 1996.
(7) INCOME TAXES - PROFORMA DATA
The Company was an S Corporation through March 3, 1996. Accordingly, losses
incurred through March 3, 1996 have been recognized by the Company's founding
stockholder, David W. Anderson.
The proforma data in the accompanying condensed consolidated financial
statements accounts for income taxes as if the Company had been subject to
federal and state income taxes at regular marginal corporate tax rates. The
Company generated net losses for both financial reporting and income tax
purposes.
From March 4, 1996 though September 29, 1996, the Company generated a net
operating loss of approximately $250,000, which, if not used, will expire in
2011. Future changes in the ownership of the Company may place limitations on
the use of this net operating loss carryforward. The Company has recorded a
full valuation allowance against its deferred tax asset due to the uncertainty
of realizing the related benefit.
Page 7 of 13
<PAGE> 8
ITEM 2.
FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Famous Dave's of America, Inc. (formerly known as Famous Dave's of
Minneapolis, Inc.) (the Company) was incorporated in the State of Minnesota in
March, 1994 to develop, own and operate American roadhouse-style barbeque
restaurants (Units) under the name "Famous Dave's BBQ Shack". The Company
opened its first Unit in the Linden Hills area of Minneapolis (the Linden Hills
Unit) in June 1995. Prior to opening the Linden Hills Unit, the Company had no
revenues and its activities were devoted solely to development.
The Company opened its second Unit in June 1996 in Roseville, Minnesota, a
Minneapolis/St. Paul suburb and opened the third Unit under the name, "Famous
Dave's BBQ and Blues", (the "Calhoun Blues Joint") in Calhoun Square in
Minneapolis in September 1996. The Calhoun Blues Joint features live blues
music during certain evenings and an authentic Chicago blues decor.
Future revenues and profits will depend upon various factors, including
market acceptance of the Famous Dave's BBQ Shack and BBQ and Blues concepts and
general economic conditions. The Company's present sole source of revenue is
the three Existing Units. There can be no assurances that the Company will
successfully implement its expansion plans, in which case the Company will
continue to be dependent on the revenues from the Existing Units. The Company
also faces all of the risks, expenses and difficulties frequently encountered
in connection with the expansion and development of a new and expanding
business. Furthermore, to the extent that the Company's expansion strategy is
successful, it must manage the transition to multiple site operations, higher
volume operations, the control of overhead expenses and the addition of
necessary personnel.
Beginning January 1, 1996, the Company adopted a 52/53 week accounting
period ending on the Sunday nearest December 31 of each year. Prior periods
using a calendar year end have not been restated for comparative purposes as
the differences are immaterial.
The following discussion and analysis of financial condition and results of
operations should be read in conjunction with the accompanying unaudited
condensed consolidated financial statements and notes thereto and the audited
consolidated financial statements and notes thereto included in the Company's
final prospectus for the initial public offering dated October 21, 1996.
SELECTED CONSOLIDATED FINANCIAL DATA
<TABLE>
<CAPTION>
13 WEEKS ENDED SEPTEMBER 29, 39 WEEKS ENDED SEPTEMBER 29,
---------------------------- ----------------------------
1996 1995 1996 1995
---- ---- ---- ----
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------ ------- ------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales $1,684,127 100.0 $252,104 100.0 $2,685,182 100.0 $275,705 100.0
Food and beverage costs 607,877 36.1 84,257 33.4 934,328 34.8 97,535 35.4
Restaurant operating exp. 707,478 42.0 137,359 54.5 1,100,106 41.0 183,350 66.5
Depreciation and amortization 64,765 3.8 5,800 2.3 92,052 3.4 7,800 2.8
Rest. operating inc. (loss) 304,007 18.1 24,688 9.8 558,696 20.8 (12,980) (4.7)
General, admin & develop. 367,119 21.8 33,123 13.1 1,004,535 37.4 90,163 32.7
Other (income) expense, net (9,283) (.5) (25,235) (10.0) (3,807) (.1) (25,235) (9.1)
Net income (loss) $(53,829) (3.2) $16,800 6.7 $(442,032) (16.5) $(77,908) (28.3)
</TABLE>
Page 8 of 13
<PAGE> 9
FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
SALES
Total sales for the thirteen weeks ended September 29, 1996 were
$1,684,127 compared to $252,104 for the same period in 1995, a 568% increase.
For the thirty nine weeks ended September 29, 1996 and 1995, sales were
$2,685,182 and $275,705, respectively, an 874% increase. The increase in sales
is primarily due to the opening of the Company's second Unit in June 1996 in
Roseville and the third Unit in Calhoun Square in September 1996. The first
Unit opened in June 1995.
FOOD AND BEVERAGE COSTS
Food and beverage costs for the thirteen weeks ended September 29, 1996
were $607,877 or 36.1% of sales, compared to $84,257 or 33.4% of sales for the
same period in 1995. For the thirty nine weeks ended September 29, 1996, food
and beverage costs were $934,328 or 34.8% of sales compared to $97,535 or 35.4%
of sales for the same period in 1995. The increase in food and beverage costs
as a percent of sales for the thirteen weeks ended September 29, 1996 compared
to 1995 was primarily due to increased pork prices, which was primarily
reflected in the third quarter.
RESTAURANT OPERATING EXPENSES
Restaurant operating expenses increased to $707,478 for the thirteen weeks
ending September 29, 1996 compared to $137,359 for the same period in 1995, and
increased to $1,100,106 for the thirty nine weeks ending September 29, 1996
compared to $183,350 for the same period in 1995. This increase in aggregate
expenses is attributable to the opening of two restaurants in 1996, resulting
in higher restaurant sales. As a percent of sales, however, restaurant
operating expenses were 42% and 41% for the thirteen and thirty nine weeks
ending September 29, 1996, compared to 54.5% and 66.5% for the thirteen and
thirty nine weeks ending September 30, 1995. This decrease was due to
efficiencies achieved due to increased sales volume.
GENERAL, ADMINISTRATIVE AND DEVELOPMENT EXPENSES
General, administrative and development expenses increased to $367,119 for
the thirteen weeks ending September 29, 1996 compared to $33,123 for the same
period in 1995. For the thirty nine weeks ending September 29, 1996, general,
administrative and development expenses increased to $1,004,535 compared to
$90,163 for the same period in 1995. The increase was primarily due to the
opening of two additional Units in 1996, coupled with the costs incurred as the
Company continues to build the infrastructure to prepare for expanded growth in
the coming years.
OTHER (INCOME) EXPENSE, NET
Other (income) expense, net decreased to $(9,283) for the thirteen weeks
ending September 29, 1996 from $(25,235) for the same period in 1995, and
decreased to $(3,807) for the thirty nine weeks ending September 29, 1996 from
$(25,235) for the same period in 1995. Other (income) expense, net primarily
represents royalty income received from a related party, offset by interest
expense on capital lease obligations incurred in 1996.
Page 9 of 13
<PAGE> 10
FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Prior to its initial public offering, the Company met its capital
requirements through cash flow generated by operations, the private placement
of common stock and borrowings directly from, or secured by, its principal
shareholder and founder. In July 1996, the Company sold 1,356,250 shares of
its common stock in a private placement for $3.50 per share, and received net
proceeds of approximately $4,200,000.
The Company has a $1,000,000 revolving note due June 26, 1997, accruing
interest at the prime rate (effective rate of 8.25%), and secured by all the
assets of the Company and the personal guaranty of the founding shareholder,
David W. Anderson. The balance outstanding at September 29, 1996 was $0.
The Company has a $2,000,000 revolving note with its founding shareholder,
David W. Anderson. The note bears interest at 8%, is unsecured and is due on
demand. The outstanding balance on the note as of September 29, 1996 was
$518,562 plus accrued interest of $5,334. The note was subsequently paid in
full in October, 1996.
On October 21, 1996, the Company completed an initial public offering of
2,645,000 Units at an offering price of $6.50 per Unit, including 345,000 Units
from the exercise of the Underwriters' overallotment option which occurred on
November 1, 1996. Each Unit consists of one share of Common Stock and one
Redeemable Class A Warrant. The Company received net proceeds of approximately
$15,250,000.
The Company leases certain equipment under a capital lease agreement that
expires in June 2001. Interest is provided for at a rate of approximately 11%
and the obligation is secured by the equipment under the lease. The lease line
available as of September 29, 1996 was $1,100,000, of which the Company has
utilized approximately $927,000. In November 1996, the Company secured a
commitment for an additional $3,500,000 of capital lease financing under
substantially similar terms to finance equipment and some leasehold
improvements, that expires in November 2001.
Since inception, the Company's principal capital requirements have been
the funding of (I) the development of the Company and the Famous Dave's concept
and (ii) the construction of the Existing Units and the acquisition of the
furniture, fixtures and equipment therein. Total capital expenditures for the
Linden Hills, Roseville and Calhoun Square Units were approximately $445,000,
$1,050,000 and $2,300,000, respectively.
The Company leases the real estate for certain of its current or proposed
Units from S&D Land Holdings, Inc., a company wholly-owned by the Company's
founding shareholder. Each lease generally has a ten-year term with two
five-year options to extend and requires the payment of base rent plus the
payment of real estate taxes and operating expenses as follows:
Linden Hills Unit - Base rent of $48,800 per year, adjusted annually for
inflation. Expires in 2005 with two five-year
extensions available.
Roseville Unit - Base rent of $82,200 per year, adjusted annually for
inflation. Expires in 2002 with one one five-year
extension available.
Proposed St. Paul, Minnesota Unit - Base rent of $44,900 per year,
adjusted annually for inflation.
Expires in 2005 with two five-year extensions available
Proposed Minnetonka, Minnesota Unit - Base rent of $124,129 per year,
adjusted annually for inflation. Expires in 2005 with
two five-year extensions available.
The Company is in various stages of development on several Units within the
Minneapolis/St. Paul area which are scheduled to open during the first half of
1997. Relative to these Units, the Company has expended minimal funds as of
September 29, 1996.
Page 10 of 13
<PAGE> 11
FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES, CONTINUED
The Company contemplates that several of the above referenced developments
will include contributions from the landlord toward leasehold improvements.
Such contributions, if received, will be reflected as a reduction of leasehold
improvement costs at the time the development is completed and the Unit opens.
In addition, the Company has capitalized approximately $200,000 of direct
costs relating to the pre-opening of these facilities. It is the Company's
policy to amortize the direct costs of hiring and training the initial work
force and other direct costs associated with opening a new restaurant over a
twelve-month period, beginning when the facility is opened, if the
recoverability of such costs can be reasonably determined.
Additional future development and expansion will be financed through cash
flow from operations and other forms of financing such as the sale of
additional equity and debt securities, capital leases and other credit
facilities. There are no assurances that such financing will be available on
terms acceptable or favorable to the Company.
FORWARD LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward looking statements. Certain information included in this
Form 10-Q and other materials filed or to be filed by the Company with the
Securities and Exchange Commission (as well as information included in oral
statements or other written statements made or to be made by the Company)
contains statements that are forward looking, such as statements relating to
business development activities, capital spending and the effects of regulation
and competition. There are certain important factors that could cause results
to differ materially from those anticipated by such statements. Investors are
cautioned that all forward looking statements involve risks and uncertainty.
The factors, among others, that could cause actual results to differ materially
include: consumer spending and debt levels, interest rates, continuity of
relationships with major vendors, competitive pressures on pricing, and
increases in food and other costs which cannot be recovered through improved
pricing.
Page 11 of 13
<PAGE> 12
PART II
OTHER INFORMATION
Item 1. Legal Proceedings - None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K - None
Page 12 of 13
<PAGE> 13
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has
duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
FAMOUS DAVE'S OF AMERICA, INC.
/s/ DAVID W. ANDERSON
----------------------------------
David W. Anderson
Chairman of the Board and
Chief Executive Officer
/s/ MARK A. PAYNE
----------------------------------
Mark A. Payne
Vice President, Finance and
Chief Financial Officer
(Principal Financial and Accounting Officer)
Date: December 4, 1996
Page 13 of 13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
(A) THE COMPANY'S UNAUDITED FINANCIAL STATEMENTS FOR THE NINE WEEKS ENDED
SEPTEMBER 29, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH (B)
FORM 10QSB FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 29, 1996.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-29-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-29-1996
<CASH> 2,030,701
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 149,103
<CURRENT-ASSETS> 2,516,523
<PP&E> 3,970,561
<DEPRECIATION> 0
<TOTAL-ASSETS> 6,706,425
<CURRENT-LIABILITIES> 1,510,376
<BONDS> 0
0
0
<COMMON> 33,563
<OTHER-SE> 4,377,324
<TOTAL-LIABILITY-AND-EQUITY> 6,706,425
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<TOTAL-REVENUES> 2,685,182
<CGS> 934,328
<TOTAL-COSTS> 934,328
<OTHER-EXPENSES> 2,196,693
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 37,103
<INCOME-PRETAX> (442,032)
<INCOME-TAX> 0
<INCOME-CONTINUING> (442,032)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (442,032)
<EPS-PRIMARY> (.18)
<EPS-DILUTED> (.18)
</TABLE>
