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8-K - 8-K - BUFFALO WILD WINGS INCa11-10958_18k.htm

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

 

Investor Relations Contact:
Mary Twinem
952.253.0731

Mary Twinem — CFO

 

Buffalo Wild Wings, Inc. Announces
First Quarter Earnings per Share of $0.81 and
Quarterly Net Earnings Growth of Over 40%

 

Minneapolis, Minnesota, April 26, 2011 — Buffalo Wild Wings, Inc. (NASDAQ: BWLD), announced today financial results for the first quarter ended March 27, 2011. Highlights for the first quarter versus the same period a year ago were:

 

·                  Total revenue increased 19.6% to $182.2 million

·                  Company-owned restaurant sales grew 20.0% to $165.5 million

·                  Same-store sales increased 3.9% at company-owned restaurants and 1.6% at franchised restaurants

·                  Net earnings increased 40.7% to $14.9 million from $10.6 million, and earnings per diluted share increased 39.7% to $0.81 from $0.58

 

Sally Smith, President and Chief Executive Officer, commented, “We are very pleased with another successful quarter for Buffalo Wild Wings. Our fast-paced unit growth continued across the country and our same-store sales were strong throughout the first quarter, with increases of 3.9% at company-owned restaurants and 1.6% at franchised locations. Revenue growth of 19.6% and impressive restaurant-level performance, which benefited from lower costs for traditional wings and expense leveraging, fueled our net earnings growth of over 40% for the first quarter, providing our shareholders with earnings per diluted share of $0.81.”

 

Total revenue increased 19.6% to $182.2 million in the first quarter compared to $152.3 million in the first quarter of 2010. Company-owned restaurant sales for the quarter increased 20.0% over the same period in 2010, to $165.5 million, driven by a company-owned same-store sales increase of 3.9% and 28 additional company-owned restaurants at the end of first quarter 2011 relative to the same period in 2010. Franchise royalties and fees increased 16.2% to $16.6

 



 

million versus $14.3 million in the first quarter of 2010. This increase is attributed to a franchise same-store sales increase of 1.6% and 58 additional franchised restaurants at the end of the period versus a year ago.

 

Average weekly sales for company-owned restaurants were $48,845 for the first quarter of 2011 compared to $45,327 for the same quarter last year, a 7.8% increase. Franchised restaurants averaged $52,744 for the period versus $51,532 in the first quarter a year ago, a 2.4% increase.

 

For the first quarter, net earnings increased 40.7% to $14.9 million versus $10.6 million in the first quarter of 2010. Earnings per diluted share were $0.81, as compared to first quarter 2010 earnings per diluted share of $0.58.

 

2011 Outlook

 

Ms. Smith remarked, “2011 is off to a strong start. Our dedication to a great guest experience and operational excellence during all dayparts is providing sales momentum as we roll into the summer months. In April, our same-store sales increased 5.3% at company-owned restaurants and 1.6% at franchised locations. We are confident we’ll achieve our annual unit goal of 13% growth, with 16 new company-owned and 9 new franchised locations planned to open in the second quarter, and over 100 total new restaurants expected to open in the year.”

 

Ms. Smith concluded, “As we look to the remainder of the year, we are moving forward with exciting marketing plans and promotions for the upcoming football season. A disruption to the regular NFL season has the potential to present a temporary challenge for our business and many others. Assuming continued strong same-store sales and low wing costs, we believe we can achieve our annual net earnings goal of more than 18% growth even if there is an abbreviated NFL season.”

 

Buffalo Wild Wings will be hosting a conference call today, April 26, 2011 at 4:00 p.m. Central Daylight Time to discuss these results. There will be a simultaneous webcast conducted at our website www.buffalowildwings.com.

 

A replay of the call will be available until May 3, 2011. To access this replay, please dial 1.858.384.5517 password 4432157.

 

About the Company

 

Buffalo Wild Wings, Inc., founded in 1982 and headquartered in Minneapolis, Minnesota, is a growing owner, operator and franchisor of Buffalo Wild Wings Grill & Bar restaurants featuring a variety of boldly-flavored, made-to-order menu items including its namesake Buffalo, New York-style chicken wings. The Buffalo Wild Wings’ menu specializes in eighteen mouth-watering signature sauces and seasonings with flavor sensations ranging from Sweet BBQ to Blazin’®. Guests enjoy a welcoming neighborhood atmosphere that includes an extensive multi-media system for watching their favorite sporting events. Buffalo Wild Wings is the recipient of hundreds of “Best Wings” and “Best Sports Bar” awards from across the country. There are currently 753 Buffalo Wild Wings locations across 45 states.

 



 

Forward-looking Statements

 

Various remarks we make about future expectations, plans, and prospects for the company constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. These statements relate to our future financial and store performance measures and growth goals for 2011 and beyond, including but not limited to those relating to our second quarter sales trends and projected unit, revenue and net earnings growth rates for 2011 and beyond. All statements other than statements of historical fact are statements that could be deemed forward-looking statements and are based upon the current beliefs and expectations of our management. We have attempted to identify forward-looking statements by terminology, including “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “should” or “will” or the negative of these terms or other comparable terminology. Actual results may vary materially from those contained in forward-looking statements based on a number of factors, including, but not limited to, our ability to achieve and manage our planned expansion, the ability of our franchisees to open and manage new restaurants, market acceptance in the new geographic regions we enter (particularly non-U.S. locations), unforeseen obstacles in developing nontraditional sites or non-U.S. locations, our ability to obtain and maintain licenses and permits necessary to operate our existing and new restaurants, our franchisees’ adherence to our practices, policies and procedures, the cost of commodities such as traditional chicken wings, the success of our key initiatives and our advertising and marketing campaigns, our ability to control restaurant labor and other restaurant operating costs, the continued service of key management personnel, our ability to protect our name and logo and other proprietary information, economic conditions (including changes in consumer preferences or consumer discretionary spending), the impact of federal, state or local government regulations relating to our employees, the sale of food and alcoholic beverages, disruption to the NFL season, the effect of competition in the restaurant industry, and other factors disclosed from time to time in our filings with the U.S. Securities and Exchange Commission, including the factors described under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 26, 2010, as updated in subsequent reports filed with the SEC. Investors should take such risks into account when making investment decisions. Shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update any forward-looking statements.

 

# # #

 



 

BUFFALO WILD WINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

(Dollar and share amounts in thousands except per share data)

(unaudited)

 

 

 

Three months ended

 

 

 

March 27,
2011

 

March 28,
2010

 

Revenue:

 

 

 

 

 

Restaurant sales

 

$

165,527

 

137,962

 

Franchise royalties and fees

 

16,623

 

14,309

 

 

 

 

 

 

 

Total revenue

 

182,150

 

152,271

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

Restaurant operating costs:

 

 

 

 

 

Cost of sales

 

46,264

 

42,224

 

Labor

 

48,878

 

40,685

 

Operating

 

24,549

 

21,455

 

Occupancy

 

10,227

 

8,910

 

Depreciation and amortization

 

11,022

 

9,550

 

General and administrative (1)

 

16,292

 

12,026

 

Preopening

 

2,387

 

1,115

 

Loss on asset disposals and store closures

 

411

 

411

 

 

 

 

 

 

 

Total costs and expenses

 

160,030

 

136,376

 

 

 

 

 

 

 

Income from operations

 

22,120

 

15,895

 

Investment income

 

356

 

185

 

 

 

 

 

 

 

Earnings before income taxes

 

22,476

 

16,080

 

Income tax expense

 

7,615

 

5,519

 

 

 

 

 

 

 

Net earnings

 

$

14,861

 

10,561

 

 

 

 

 

 

 

Earnings per common share — basic

 

$

0.81

 

0.58

 

Earnings per common share — diluted

 

0.81

 

0.58

 

Weighted average shares outstanding — basic

 

18,306

 

18,147

 

Weighted average shares outstanding — diluted

 

18,375

 

18,229

 

 


(1) Includes stock-based compensation of $2,553 and $1,225, respectively

 



 

The following table expresses results of operations as a percentage of total revenue for the periods presented, except for restaurant operating costs which are expressed as a percentage of restaurant sales:

 

 

 

Three months ended

 

 

 

March 27,
2011

 

March 28,
2010

 

Revenue:

 

 

 

 

 

Restaurant sales

 

90.9

%

90.6

%

Franchising royalties and fees

 

9.1

 

9.4

 

 

 

 

 

 

 

Total revenue

 

100.0

 

100.0

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

Restaurant operating costs:

 

 

 

 

 

Cost of sales

 

27.9

 

30.6

 

Labor

 

29.5

 

29.5

 

Operating

 

14.8

 

15.6

 

Occupancy

 

6.2

 

6.5

 

Depreciation and amortization

 

6.1

 

6.3

 

General and administrative

 

8.9

 

7.9

 

Preopening

 

1.3

 

0.7

 

Loss on asset disposals and store closures

 

0.2

 

0.3

 

 

 

 

 

 

 

Total costs and expenses

 

87.9

 

89.6

 

 

 

 

 

 

 

Income from operations

 

12.1

 

10.4

 

Investment income

 

0.2

 

0.1

 

 

 

 

 

 

 

Earnings before income taxes

 

12.3

 

10.6

 

Income tax expense

 

4.2

 

3.6

 

 

 

 

 

 

 

Net earnings

 

8.2

%

6.9

%

 



 

BUFFALO WILD WINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollar amounts in thousands)

(unaudited)

 

 

 

March 27,
2011

 

December 26,
2010

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

30,411

 

15,309

 

Marketable securities

 

60,901

 

56,827

 

Accounts receivable — franchisees, net of allowance of $25

 

1,288

 

1,086

 

Accounts receivable — other

 

10,294

 

7,947

 

Inventory

 

4,119

 

4,158

 

Prepaid expenses

 

3,081

 

3,505

 

Refundable income taxes

 

2,729

 

6,366

 

Deferred income taxes

 

6,686

 

6,069

 

Restricted assets

 

33,785

 

32,937

 

 

 

 

 

 

 

Total current assets

 

153,294

 

134,204

 

 

 

 

 

 

 

Property and equipment, net

 

237,522

 

224,970

 

Other assets

 

10,253

 

9,937

 

Goodwill

 

11,246

 

11,246

 

 

 

 

 

 

 

Total assets

 

$

412,315

 

380,357

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Unearned franchise fees

 

$

2,114

 

2,109

 

Accounts payable

 

24,909

 

17,632

 

Accrued compensation and benefits

 

22,198

 

19,324

 

Accrued expenses

 

6,498

 

5,696

 

Current portion of deferred lease credits

 

81

 

293

 

System-wide payables

 

33,985

 

34,062

 

 

 

 

 

 

 

Total current liabilities

 

89,785

 

79,116

 

 

 

 

 

 

 

Long-term liabilities:

 

 

 

 

 

Other liabilities

 

1,752

 

1,574

 

Deferred income taxes

 

27,980

 

24,557

 

Deferred lease credits, net of current portion

 

18,964

 

18,289

 

 

 

 

 

 

 

Total liabilities

 

138,481

 

123,536

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Undesignated stock, 1,000,000 shares authorized

 

 

 

Common stock, no par value. Authorized 44,000,000 shares; issued and outstanding 18,321,353 and 18,214,065 respectively

 

104,644

 

102,484

 

Retained earnings

 

169,207

 

154,346

 

Accumulated other comprehensive loss

 

(17

)

(9

)

 

 

 

 

 

 

Total stockholders’ equity

 

273,834

 

256,821

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

412,315

 

380,357

 

 



 

BUFFALO WILD WINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollar amounts in thousands)

(unaudited)

 

 

 

Three months ended

 

 

 

March 27,
2011

 

March 28,
2010

 

Cash flows from operating activities:

 

 

 

 

 

Net earnings

 

$

14,861

 

10,561

 

Adjustments to reconcile net earnings to cash provided by operations:

 

 

 

 

 

Depreciation

 

10,871

 

9,396

 

Amortization

 

151

 

154

 

Loss on asset disposals and store closures

 

411

 

410

 

Deferred lease credits

 

802

 

537

 

Deferred income taxes

 

2,806

 

(1,136

)

Stock-based compensation

 

2,553

 

1,225

 

Excess tax benefit from the exercise of stock options

 

(140

)

(74

)

Change in operating assets and liabilities:

 

 

 

 

 

Trading securities

 

(289

)

(205

)

Accounts receivable

 

(2,796

)

(953

)

Inventory

 

39

 

42

 

Prepaid expenses

 

425

 

71

 

Other assets

 

(468

)

(46

)

Unearned franchise fees

 

5

 

(115

)

Accounts payable

 

2,236

 

866

 

Income taxes

 

3,777

 

6,101

 

Accrued expenses

 

4,565

 

(2,099

)

 

 

 

 

 

 

Net cash provided by operating activities

 

39,809

 

24,735

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Acquisition of property and equipment

 

(18,746

)

(9,908

)

Purchase of marketable securities

 

(27,185

)

(17,960

)

Proceeds of marketable securities

 

23,401

 

9,854

 

 

 

 

 

 

 

Net cash used in investing activities

 

(22,530

)

(18,014

)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Issuance of common stock

 

168

 

123

 

Excess tax benefit from the exercise of stock options

 

140

 

74

 

Tax payments for restricted stock

 

(2,481

)

(1,625

)

 

 

 

 

 

 

Net cash used in financing activities

 

(2,173

)

(1,428

)

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

(4

)

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

15,102

 

5,293

 

Cash and cash equivalents at beginning of period

 

15,309

 

9,580

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

 

$

30,411

 

14,873

 

 



 

BUFFALO WILD WINGS, INC. AND SUBSIDIARIES

Supplemental Information

 

Restaurant Count

 

Company-owned Restaurants:

 

 

 

Q1

 

Q2

 

Q3

 

Q4

 

 

 

2011

 

263

 

 

 

 

 

 

 

 

 

2010

 

235

 

234

 

244

 

259

 

 

 

2009

 

206

 

215

 

220

 

232

 

 

 

2008

 

165

 

169

 

187

 

197

 

 

 

2007

 

140

 

145

 

148

 

161

 

 

 

 

Franchised Restaurants:

 

 

 

Q1

 

Q2

 

Q3

 

Q4

 

 

 

2011

 

488

 

 

 

 

 

 

 

 

 

2010

 

430

 

447

 

457

 

473

 

 

 

2009

 

373

 

383

 

400

 

420

 

 

 

2008

 

340

 

346

 

348

 

363

 

 

 

2007

 

299

 

301

 

313

 

332

 

 

 

 

Same-Store Sales

 

Company-owned Restaurants:

 

 

 

Q1

 

Q2

 

Q3

 

Q4

 

Year

 

2011

 

3.9

%

 

 

 

 

 

 

 

 

2010

 

0.1

%

(0.1

)%

2.6

%

(0.3

)%

0.6

%

2009

 

6.4

%

2.8

%

0.8

%

2.6

%

3.1

%

2008

 

4.1

%

8.3

%

6.8

%

4.5

%

5.9

%

2007

 

8.7

%

8.1

%

8.3

%

3.4

%

6.9

%

 

Franchised Restaurants:

 

 

 

Q1

 

Q2

 

Q3

 

Q4

 

Year

 

2011

 

1.6

%

 

 

 

 

 

 

 

 

2010

 

0.7

%

(0.7

)%

0.3

%

(1.1

)%

(0.2

)%

2009

 

6.0

%

3.7

%

1.9

%

2.0

%

3.4

%

2008

 

2.1

%

4.5

%

2.1

%

2.5

%

2.8

%

2007

 

3.3

%

4.0

%

5.9

%

2.3

%

3.9

%

 



 

Average Weekly Sales Volumes

 

Company-owned Restaurants:

 

 

 

Q1

 

Q2

 

Q3

 

Q4

 

Year

 

2011

 

$

48,845

 

 

 

 

 

 

 

 

 

2010

 

45,327

 

43,021

 

44,394

 

45,595

 

44,601

 

2009

 

45,593

 

42,938

 

42,602

 

44,583

 

43,912

 

2008

 

41,438

 

40,572

 

42,400

 

43,864

 

42,141

 

2007

 

39,254

 

36,655

 

38,498

 

40,485

 

38,757

 

 

Franchised Restaurants:

 

 

 

Q1

 

Q2

 

Q3

 

Q4

 

Year

 

2011

 

$

52,744

 

 

 

 

 

 

 

 

 

2010

 

51,532

 

49,051

 

49,005

 

49,837

 

49,835

 

2009

 

50,729

 

48,619

 

48,458

 

50,115

 

49,479

 

2008

 

47,812

 

46,390

 

46,889

 

48,424

 

47,382

 

2007

 

46,439

 

43,998

 

45,879

 

47,293

 

45,901