Dave (NASDAQ:DAVE)
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From Jun 2019 to Jun 2024
Famous Dave's of America, Inc. (NASDAQ: DAVE) today announced that it
would close one of its 48 company-owned restaurants, in Chicago, and
would incur non-cash charges associated with that closure. The company
also announced that it would record non-cash impairment charges on two
other locations, one in Chicago and one in Minneapolis, write off assets
related to the recent acquisition of the Atlanta market from a
franchisee and record remaining lease obligations on a location
previously closed.
The company expects that its actions could result in related non-cash
charges and reserves of approximately $4.1 million, or $0.28 per diluted
share on a year-to-date basis. This sum may be reduced by as much as
$600,000, pending the outcome of negotiations for lease terminations due
to the bankruptcy filing of a landlord on the location to close and on a
location previously closed.
“Anyone watching the headlines concerning our
industry, food costs and other economic factors recognizes that this
remains a very difficult operating environment,”
said Christopher O’Donnell, Famous Dave’s
president and chief executive officer. “We
believe that it’s important to recognize these
realities while at the same time positioning the company to deliver
strong financial results when conditions improve.”
The restaurant expected to close in Chicago, Illinois in mid-September,
is the result of the company opening a new prototype restaurant within
four miles of the existing restaurant, supporting the company’s
strategy to reposition legacy restaurants within a market when
opportunities arise. Famous Dave’s will
recognize a net impact of approximately $557,000 representing the
disposal of assets and the recording of a reserve for remaining lease
obligations, if negotiations for a lease termination are not successful.
All managers will be relocated to the new restaurant, and many
associates are being offered the opportunity to work at the new location
or to relocate to another Famous Dave’s
restaurant within the market.
The company will additionally record net impairment charges related to
two locations, one in Chicago and one in Minneapolis, both of which are
expected to remain operational through the end of their original lease
terms, of approximately $1.6 million, and will record remaining lease
obligations of approximately $217,000 on a location previously closed in
2006, if negotiations for a lease termination are not successful.
Subsequent to the end of the second quarter, Famous Dave’s
acquired three franchise restaurants in Atlanta from a franchisee in
exchange for amounts owed and deemed uncollectible. Based on the company’s
assessment of expected cash flows from those locations, a net impairment
charge will be recorded for approximately $1.7 million related to assets
acquired. Over the next quarter, the company will continue to assess the
long-term viability of these restaurants remaining operational and could
engage in conversations with respective landlords regarding the
potential buyout of remaining lease obligations.
Outlook
Famous Dave's is updating its guidance regarding system growth and
anticipates opening approximately 18 restaurants in 2008, including four
company-owned locations.
About Famous Dave’s
Famous Dave’s of America, Inc. develops,
owns, operates and franchises barbeque restaurants. As of today, the
company owns 48 locations and franchises 123 additional units in 36
states. Its menu features award-winning barbequed and grilled meats, an
ample selection of salads, side items and sandwiches, and unique
desserts.
Statements in this press release that are not strictly historical,
including but not limited to statements regarding the timing of our
restaurant openings and the timing or success of our expansion plans,
are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements involve known and unknown risks, which may cause the company’s
actual results to differ materially from expected results. Although
Famous Dave's of America, Inc. believes the expectations reflected in
any forward-looking statements are based on reasonable assumptions, it
can give no assurance that its expectation will be attained. Factors
that could cause actual results to differ materially from Famous Dave's
expectation include financial performance, restaurant industry
conditions, execution of restaurant development and construction
programs, franchisee performance, changes in local or national economic
conditions, availability of financing, governmental approvals and other
risks detailed from time to time in the company's SEC reports.