Famous Dave’s Reports First Quarter Earnings of $0.30 Per Share

Includes non-cash gains of $0.15 per share

“I was pleased with our execution during the first quarter of 2010.”

First quarter results include one-time non-cash gains of approximately $2.1 million or $0.15 per diluted share related to the acquisition of seven restaurants in New York and New Jersey and the termination of a Marietta, Georgia lease.

“I was pleased with our execution during the first quarter of 2010.” said Christopher O’Donnell, President and CEO of Famous Dave’s of America. “We turned in a solid quarter of profitable financial performance in a business environment that remains challenging, and during a time when we were also acquiring, and integrating, seven new company-owned restaurants.”

Same store sales for company-owned restaurants open for 24 months or more decreased 3.5 percent during the quarter. Severe weather-related closures, affecting 16 east coast restaurants for 28 operating days, negatively impacted comparable sales for the quarter by approximately 110 basis points. Additionally, the shift of Easter from the second quarter of 2009 to the first quarter of 2010 had a 50 basis point unfavorable impact on the quarter. The comparable sales decline was net of weighted average price increases of approximately 1.0 percent.

Franchise royalty revenue for the first quarter of 2010 totaled $4.0 million, down 4.6 percent from the comparable period in 2009. The decrease in franchise royalty revenue primarily reflects a 3.4% decline in comparable sales. Additionally, the decline reflects the loss of royalties for seven New York and New Jersey locations purchased by the company, and the closure of one of the New Jersey locations, in early March.

Acquisition of Seven Franchise Restaurants

Earnings for the first quarter include a non-cash gain of approximately $0.15 per diluted share from the acquisition of seven restaurants in New York and New Jersey, equal to the difference between the fair market value of the assets acquired of approximately $9.8 million, and the purchase price of approximately $7.4 million. In addition, acquisition-related costs of approximately $307,000 have been netted against the gain. The Company purchased these seven restaurants in early March for cash consideration of approximately $6.8 million.

Lease Termination for Previously Closed Restaurant

During the first quarter, the company terminated the last of its Atlanta, Georgia leases, resulting in the recapture of the lease termination reserve of approximately $84,000, which is reported in asset impairment and estimated lease termination and other closing costs in the Consolidated Statement of Operations.

Stock-based Compensation and Common Share Repurchase

Earnings results for the first quarter of 2010 included approximately $355,000 or $0.03 per diluted share, in compensation expense related to the company’s stock-based incentive programs, as compared to approximately $138,000 or $0.01 per diluted share, for the prior year comparable period. The increase is primarily due to a shift in the timing of board of director’s stock-based compensation to align with the timing of their board service in 2009 from a previous fiscal year method as well as an increase in the Company’s stock price over the prior year.

The company repurchased approximately 430,000 shares of common stock during the fiscal first quarter at an average price of $6.92 per share, excluding commissions, for a total of approximately $3.0 million. The Company has repurchased approximately 537,000 shares under its current 1,000,000 share authorization.

Marketing and Development

Development and marketing highlights during the quarter included a successful "limited time offer" of Cajun style seafood featuring Blackened BBQ Catfish, New Orleans BBQ Shrimp, BBQ or Buffalo Shrimp Appetizers, “add a skewer” BBQ Shrimp and a Mardi Gras inspired beverage, The Big Easy.

The current limited time offering, “80 Proof BBQ,” features Jack Daniels Tennessee Whiskey