BWLD Buffalo Wild Wings, Inc. (delisted)

Buffalo Wild Wings, Inc. (Nasdaq:BWLD), announced today financial results for the third quarter ended September 24, 2006. Highlights for the third quarter versus the same period a year ago were: Total revenue increased 32.1% to $68.3 million Company-owned restaurant sales grew 32.5% to $60.8 million Same-store sales increased 11.8% at company-owned restaurants and 6.4% at franchised restaurants Earnings per diluted share increased 82% to $0.40 from $0.22 Sally Smith, President and Chief Executive Officer, remarked, �Our top-line performance drove earnings per diluted share of $0.40, an impressive increase over prior year. We are extremely pleased with our strong sales, proving that our new advertising tag line YOU HAVE TO BE HERE� is on the mark. Company-owned restaurants had 11.8% same-store sales and 12.8% average weekly sales volume increases, signs of our growing brand strength. Franchised locations also continued strong same-store sales at 6.4% for the quarter, with average unit volumes on pace to exceed $2.3 million for the year.� Total revenue, which includes company-owned restaurant sales and franchise royalties and fees, increased 32.1% to $68.3 million in the third quarter compared to $51.7 million in the third quarter of 2005. Company-owned restaurant sales for the quarter grew 32.5% to $60.8 million driven by a company-owned same-store sales increase of 11.8% and 18 more company-owned locations in operation at the end of the third quarter 2006 relative to the same period in 2005. Franchise royalties and fees increased 29.2% to $7.5 million versus $5.8 million in the prior year, due to a franchised same-store sales increase of 6.4% and 44 more franchised restaurants at the end of the period versus a year ago. Average weekly sales for company-owned restaurants were $35,380 for the third quarter of 2006 compared to $31,361 for the same quarter last year, a 12.8% increase. Franchised restaurants averaged $42,964 for the period versus $40,149 in the third quarter a year ago, a 7.0% increase. For the third quarter of 2006, earnings per diluted share were $0.40. For the third quarter of 2005, earnings per diluted share were $0.22, which included an impairment charge of $622,000 or $0.04 per share. Future Earnings Guidance Ms. Smith continued, �Buffalo Wild Wings is a growing and dynamic company, with myriad variables such as same-store sales, wing prices, self-insurance costs, and tax rates, making accurate guidance on a quarterly basis challenging. Compounding this challenge is a low share count, which rounds a penny of earnings on $44,000 of net income � less than one-tenth of one percent of this quarter�s revenue. As a result, we will provide annual performance goals consistent with our internal measures of success, but will not provide quarterly ranges for earnings per diluted share. However, during our conference calls, we will share factors that we believe are relevant to our current business trends.� Ms. Smith concluded, �Our annual goals for the next three years are to expand our unit base by over 15%, grow revenues by over 20%, and leverage this growth to increase our bottom line by over 25%. We have delivered increased value to our shareholders in previous years, and we plan to continue increasing value as we build the Buffalo Wild Wings system nationwide.� Buffalo Wild Wings will be hosting a conference call today, October 24, 2006 at 4:00 p.m. Central Daylight Time to discuss these results. There will be a simultaneous webcast conducted at our website http://www.buffalowildwings.com. A replay of the call will be available until October 31, 2006. To access this replay, please dial (719) 457-0820, password 7481806. Included in this release is information regarding restaurant unit counts, same-store sales, and average weekly sales volumes. Our management team believes such information is an important measure of our performance and is useful in assessing consumer acceptance of the Buffalo Wild Wings Grill & Bar concept. Franchise information also provides an understanding of our revenues as franchise royalties and fees are based on the opening of franchised units and their sales. However, these sales measures are not prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP), should not be considered in isolation or as a substitute for other measures of performance prepared in accordance with GAAP, and may not be comparable to sales measures as defined or used by other companies. About the Company Buffalo Wild Wings, Inc., founded in 1982 and headquartered in Minneapolis, Minnesota, is a growing owner, operator and franchisor of restaurants featuring a variety of boldly-flavored, made-to-order menu items including Buffalo-style chicken wings spun in one of 14 signature sauces. Buffalo Wild Wings is an inviting neighborhood destination with widespread appeal and is the recipient of dozens of �Best Wings� and �Best Sports Bar� awards from across the country. There are currently 415 Buffalo Wild Wings locations across 37 states. Forward-looking Statements Certain statements in this release that are not historical facts, including, without limitation, those relating to our projected growth rate and future financial performance, are forward-looking statements that involve risks and uncertainties. Such statements are based upon the current beliefs and expectations of our management. Actual results may vary materially from those contained in forward-looking statements based on a number of factors including, without limitation, the actual number of locations opening in the future, the sales at these and our other company-owned and franchised locations, our ability to successfully operate in new markets, the cost of wings, the success of our marketing initiatives, our ability to control other restaurant operating costs and other factors disclosed from time to time in our filings with the U.S. Securities and Exchange Commission. 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 amounts in thousands except share and per share data) (unaudited) Three months ended Nine months ended September 25,2005 September 24,2006 September 25,2005 September 24,2006 Revenue: Restaurant sales $ 45,892� 60,800� 133,535� 172,928� Franchise royalties and fees 5,840� 7,548� 17,213� 21,941� Total revenue 51,732� 68,348� 150,748� 194,869� � Costs and expenses: Restaurant operating costs: Cost of sales 14,096� 18,557� 42,618� 53,590� Labor 13,743� 18,265� 39,936� 51,422� Operating 7,529� 10,291� 21,052� 28,970� Occupancy 3,616� 4,450� 10,167� 12,808� Depreciation 2,998� 3,649� 8,505� 10,412� General and adminis-trative (1) 5,383� 7,600� 16,643� 22,119� Preopening 818� 755� 1,731� 2,276� Loss on equipment disposal and impairment 849� 102� 871� 356� Total costs and expenses 49,032� 63,669� 141,523� 181,953� Income from operations 2,700� 4,679� 9,225� 12,916� Interest income 349� 556� 958� 1,526� Earnings before income taxes 3,049� 5,235� 10,183� 14,442� Income tax expense 1,174� 1,709� 3,921� 4,968� � Net earnings $ 1,875� 3,526� 6,262� 9,474� Earnings per common share � basic $ 0.22� 0.41� 0.74� 1.11� Earnings per common share � diluted 0.22� 0.40� 0.72� 1.08� Weighted average shares outstanding � basic 8,472,529� 8,597,918� 8,429,352� 8,561,767� Weighted average shares outstanding � diluted 8,678,108� 8,762,079� 8,673,544� 8,751,838� � (1)�Contains stock-based compensation of $193, $669, $1,047, and $2,208, 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 Nine months ended September 25,2005 September 24,2006 September 25,2005 September 24,2006 Revenue: Restaurant sales 88.7% 89.0% 88.6% 88.7% Franchising royalties and fees 11.3� 11.0� 11.4� 11.3� Total revenue 100.0� 100.0� 100.0� 100.0� � Costs and expenses: Restaurant operating costs: Cost of sales 30.7� 30.5� 31.9� 31.0� Labor 29.9� 30.0� 29.9� 29.7� Operating 16.4� 16.9� 15.8� 16.8� Occupancy 7.9� 7.3� 7.6� 7.4� Depreciation 5.8� 5.3� 5.6� 5.3� General and adminis-trative 10.4� 11.1� 11.0� 11.4� Preopening 1.6� 1.1� 1.1� 1.2� Loss on equipment disposal and impairment 1.6� 0.1� 0.6� 0.2� Total costs and expenses 94.8� 93.2� 93.9� 93.4� Income from operations 5.2� 6.8� 6.1� 6.6� Interest income 0.7� 0.8� 0.6� 0.8� Earnings before income taxes 5.9� 7.7� 6.8� 7.4� Income tax expense 2.3� 2.5� 2.6� 2.5� Net earnings 3.6� 5.2� 4.2� 4.9� BUFFALO WILD WINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollar amounts in thousands) (unaudited) December 25,2005 September 24,2006 Assets Current assets: Cash and cash equivalents $ 3,986� 3,457� Marketable securities 48,418� 53,133� Accounts receivable�franchisees, net of allowance of $25 and $65 731� 871� Accounts receivable�other 3,700� 5,187� Inventory 1,502� 1,644� Prepaid expenses 1,972� 1,736� Deferred income taxes 770� 1,871� Total current assets 61,079� 67,899� � Property and equipment, net 68,693� 77,624� Restricted cash 2,115� 4,328� Other assets 867� 892� Goodwill 369� 369� Total assets $ 133,123� 151,112� � Liabilities and Stockholders� Equity Current liabilities: Unearned franchise fees $ 2,194� 2,348� Accounts payable 6,628� 8,953� Accrued income tax payable 102� 351� Accrued compensation and benefits 6,775� 8,061� Accrued expenses 3,900� 4,114� Current portion of deferred lease credits 604� 722� Total current liabilities 20,203� 24,549� � Long-term liabilities: Marketing fund payables 2,115� 4,328� Deferred income taxes 4,755� 3,471� Deferred lease credits, net of current portion 9,202� 9,439� Total liabilities 36,275� 41,787� � Commitments and contingencies Stockholders� equity: Undesignated stock, 5,600,000 shares authorized �� �� Common stock, no par value. Authorized 15,600,000 shares; issued and outstanding 8,616,222 and 8,776,187, respectively 74,503� 74,938� Deferred compensation (2,568 ) �� Retained earnings 24,913� 34,387� Total stockholders� equity 96,848� 109,325� Total liabilities and stockholders� equity $ 133,123� 151,112� BUFFALO WILD WINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollar amounts in thousands) (unaudited) Nine months ended September 25,2005 September 24,2006 Cash flows from operating activities: Net earnings $ 6,262� 9,474� Adjustments to reconcile net earnings to cash provided by operations: Depreciation 8,505� 10,412� Amortization (62) (88) Loss on equipment disposal and impairment 871� 356� Deferred lease credits 554� 185� Deferred income taxes (1,749) (2,385) Stock-based compensation 1,047� 2,208� Excess tax benefit from the exercise of stock options �� (185) Change in operating assets and liabilities: Purchase of marketable securities �� (1,144) Accounts receivable (1,158) (1,457) Inventory (77) (142) Prepaid expenses (285) 236� Other assets 36� (25) Unearned franchise fees (305) 154� Accounts payable 144� (404) Income taxes 2,746� 434� Accrued expenses (626) 2,078� Net cash provided by operating activities 15,903� 19,707� � Cash flows from investing activities: Acquisition of property and equipment (15,180) (16,970) Purchase of marketable securities (65,590) (76,752) Proceeds of marketable securities 55,847� 73,269� Net cash used in investing activities (24,923) (20,453) � Cash flows from financing activities: Issuance of common stock 763� 719� Tax payments for restricted stock (326) (687) Excess tax benefit from the exercise of stock options �� 185� Net cash provided by financing activities 437� 217� Net decrease in cash and cash equivalents (8,583) (529) Cash and cash equivalents at beginning of period 12,557� 3,986� Cash and cash equivalents at end of period $ 3,974� 3,457� BUFFALO WILD WINGS, INC. AND SUBSIDIARIES Supplemental Information Restaurant Count Company-owned Restaurants: Q1 Q2 Q3 Q4 2006� 124� 129� 134� 2005� 106� 110� 116� 122� 2004� 88� 92� 97� 103� 2003� 73� 74� 77� 84� 2002� 56� 60� 63� 70� Franchised Restaurants: Q1 Q2 Q3 Q4 2006� 260� 270� 278� 2005� 212� 224� 234� 248� 2004� 168� 175� 189� 203� 2003� 131� 138� 142� 161� 2002� 108� 119� 123� 129� Same-Store Sales Company-owned Restaurants: Q1 Q2 Q3 Q4 Year 2006� 7.7% 8.2% 11.8% 2005� 6.1% 2.7% 1.8% 2.5% 3.2% 2004� 11.1% 10.6% 9.9% 7.6% 9.7% 2003� (1.4%) 2.7% 6.7% 8.5% 4.3% 2002� 5.6% 4.6% (0.7%) (1.8%) 1.6% Franchised Restaurants: Q1 Q2 Q3 Q4 Year 2006� 6.7% 4.7% 6.4% 2005� 3.2% 1.8% 1.1% 2.6% 2.2% 2004� 12.0% 10.4% 5.7% 3.7% 7.6% 2003� (0.4%) 2.3% 8.5% 10.7% 5.6% 2002� 4.2% 4.5% 0.0% (1.8%) 1.5% BUFFALO WILD WINGS, INC. AND SUBSIDIARIES Supplemental Information Average Weekly Sales Volumes Company-owned Restaurants: Q1 Q2 Q3 Q4 Year 2006� $35,857� $33,660� $35,380� 2005� 33,195� 30,531� 31,361� $33,953� $32,304� 2004� 32,289� 30,248� 30,983� 33,038� 31,663� 2003� 28,782� 27,132� 28,281� 31,171� 28,886� 2002� 29,564� 26,330� 25,916� 28,466� 27,547� Franchised Restaurants: Q1 Q2 Q3 Q4 Year 2006� $44,342� $42,338� $42,964� 2005� 41,309� 39,824� 40,149� $42,533� $40,999� 2004� 39,678� 38,072� 38,727� 40,926� 39,402� 2003� 33,920� 33,393� 35,289� 39,014� 35,491� 2002� 32,956� 31,623� 31,619� 34,023� 32,574� Average Wing Price Per Pound Q1 Q2 Q3 Q4 Year 2006� $1.24� $1.10� $1.14� 2005� 1.45� 1.14� 1.08� $1.17� $1.20� 2004� 1.49� 1.46� 1.35� 1.30� 1.39� 2003� 1.01� 1.02� 1.00� 1.21� 1.06� 2002� 1.11� .87� .84� .78� .89� Buffalo Wild Wings, Inc. (Nasdaq:BWLD), announced today financial results for the third quarter ended September 24, 2006. Highlights for the third quarter versus the same period a year ago were: -- Total revenue increased 32.1% to $68.3 million -- Company-owned restaurant sales grew 32.5% to $60.8 million -- Same-store sales increased 11.8% at company-owned restaurants and 6.4% at franchised restaurants -- Earnings per diluted share increased 82% to $0.40 from $0.22 Sally Smith, President and Chief Executive Officer, remarked, "Our top-line performance drove earnings per diluted share of $0.40, an impressive increase over prior year. We are extremely pleased with our strong sales, proving that our new advertising tag line YOU HAVE TO BE HERE(TM) is on the mark. Company-owned restaurants had 11.8% same-store sales and 12.8% average weekly sales volume increases, signs of our growing brand strength. Franchised locations also continued strong same-store sales at 6.4% for the quarter, with average unit volumes on pace to exceed $2.3 million for the year." Total revenue, which includes company-owned restaurant sales and franchise royalties and fees, increased 32.1% to $68.3 million in the third quarter compared to $51.7 million in the third quarter of 2005. Company-owned restaurant sales for the quarter grew 32.5% to $60.8 million driven by a company-owned same-store sales increase of 11.8% and 18 more company-owned locations in operation at the end of the third quarter 2006 relative to the same period in 2005. Franchise royalties and fees increased 29.2% to $7.5 million versus $5.8 million in the prior year, due to a franchised same-store sales increase of 6.4% and 44 more franchised restaurants at the end of the period versus a year ago. Average weekly sales for company-owned restaurants were $35,380 for the third quarter of 2006 compared to $31,361 for the same quarter last year, a 12.8% increase. Franchised restaurants averaged $42,964 for the period versus $40,149 in the third quarter a year ago, a 7.0% increase. For the third quarter of 2006, earnings per diluted share were $0.40. For the third quarter of 2005, earnings per diluted share were $0.22, which included an impairment charge of $622,000 or $0.04 per share. Future Earnings Guidance Ms. Smith continued, "Buffalo Wild Wings is a growing and dynamic company, with myriad variables such as same-store sales, wing prices, self-insurance costs, and tax rates, making accurate guidance on a quarterly basis challenging. Compounding this challenge is a low share count, which rounds a penny of earnings on $44,000 of net income - less than one-tenth of one percent of this quarter's revenue. As a result, we will provide annual performance goals consistent with our internal measures of success, but will not provide quarterly ranges for earnings per diluted share. However, during our conference calls, we will share factors that we believe are relevant to our current business trends." Ms. Smith concluded, "Our annual goals for the next three years are to expand our unit base by over 15%, grow revenues by over 20%, and leverage this growth to increase our bottom line by over 25%. We have delivered increased value to our shareholders in previous years, and we plan to continue increasing value as we build the Buffalo Wild Wings system nationwide." Buffalo Wild Wings will be hosting a conference call today, October 24, 2006 at 4:00 p.m. Central Daylight Time to discuss these results. There will be a simultaneous webcast conducted at our website http://www.buffalowildwings.com. A replay of the call will be available until October 31, 2006. To access this replay, please dial (719) 457-0820, password 7481806. Included in this release is information regarding restaurant unit counts, same-store sales, and average weekly sales volumes. Our management team believes such information is an important measure of our performance and is useful in assessing consumer acceptance of the Buffalo Wild Wings Grill & Bar concept. Franchise information also provides an understanding of our revenues as franchise royalties and fees are based on the opening of franchised units and their sales. However, these sales measures are not prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP), should not be considered in isolation or as a substitute for other measures of performance prepared in accordance with GAAP, and may not be comparable to sales measures as defined or used by other companies. About the Company Buffalo Wild Wings, Inc., founded in 1982 and headquartered in Minneapolis, Minnesota, is a growing owner, operator and franchisor of restaurants featuring a variety of boldly-flavored, made-to-order menu items including Buffalo-style chicken wings spun in one of 14 signature sauces. Buffalo Wild Wings is an inviting neighborhood destination with widespread appeal and is the recipient of dozens of "Best Wings" and "Best Sports Bar" awards from across the country. There are currently 415 Buffalo Wild Wings locations across 37 states. Forward-looking Statements Certain statements in this release that are not historical facts, including, without limitation, those relating to our projected growth rate and future financial performance, are forward-looking statements that involve risks and uncertainties. Such statements are based upon the current beliefs and expectations of our management. Actual results may vary materially from those contained in forward-looking statements based on a number of factors including, without limitation, the actual number of locations opening in the future, the sales at these and our other company-owned and franchised locations, our ability to successfully operate in new markets, the cost of wings, the success of our marketing initiatives, our ability to control other restaurant operating costs and other factors disclosed from time to time in our filings with the U.S. Securities and Exchange Commission. 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. -0- *T BUFFALO WILD WINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Dollar amounts in thousands except share and per share data) (unaudited) Three months ended Nine months ended --------------------------- --------------------------- September 25, September 24, September 25, September 24, 2005 2006 2005 2006 ------------- ------------- ------------- ------------- Revenue: Restaurant sales $45,892 60,800 133,535 172,928 Franchise royalties and fees 5,840 7,548 17,213 21,941 ------------- ------------- ------------- ------------- Total revenue 51,732 68,348 150,748 194,869 ------------- ------------- ------------- ------------- Costs and expenses: Restaurant operating costs: Cost of sales 14,096 18,557 42,618 53,590 Labor 13,743 18,265 39,936 51,422 Operating 7,529 10,291 21,052 28,970 Occupancy 3,616 4,450 10,167 12,808 Depreciation 2,998 3,649 8,505 10,412 General and adminis- trative (1) 5,383 7,600 16,643 22,119 Preopening 818 755 1,731 2,276 Loss on equipment disposal and impairment 849 102 871 356 ------------- ------------- ------------- ------------- Total costs and expenses 49,032 63,669 141,523 181,953 ------------- ------------- ------------- ------------- Income from operations 2,700 4,679 9,225 12,916 Interest income 349 556 958 1,526 ------------- ------------- ------------- ------------- Earnings before income taxes 3,049 5,235 10,183 14,442 Income tax expense 1,174 1,709 3,921 4,968 ------------- ------------- ------------- ------------- Net earnings $1,875 3,526 6,262 9,474 ============= ============= ============= ============= Earnings per common share - basic $0.22 0.41 0.74 1.11 Earnings per common share - diluted 0.22 0.40 0.72 1.08 Weighted average shares outstanding - basic 8,472,529 8,597,918 8,429,352 8,561,767 Weighted average shares outstanding - diluted 8,678,108 8,762,079 8,673,544 8,751,838 --------------- (1) Contains stock-based compensation of $193, $669, $1,047, and $2,208, respectively *T 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: -0- *T Three months ended Nine months ended --------------------------- --------------------------- September 25, September 24, September 25, September 24, 2005 2006 2005 2006 ------------- ------------- ------------- ------------- Revenue: Restaurant sales 88.7% 89.0% 88.6% 88.7% Franchising royalties and fees 11.3 11.0 11.4 11.3 ------------- ------------- ------------- ------------- Total revenue 100.0 100.0 100.0 100.0 ------------- ------------- ------------- ------------- Costs and expenses: Restaurant operating costs: Cost of sales 30.7 30.5 31.9 31.0 Labor 29.9 30.0 29.9 29.7 Operating 16.4 16.9 15.8 16.8 Occupancy 7.9 7.3 7.6 7.4 Depreciation 5.8 5.3 5.6 5.3 General and adminis- trative 10.4 11.1 11.0 11.4 Preopening 1.6 1.1 1.1 1.2 Loss on equipment disposal and impairment 1.6 0.1 0.6 0.2 ------------- ------------- ------------- ------------- Total costs and expenses 94.8 93.2 93.9 93.4 ------------- ------------- ------------- ------------- Income from operations 5.2 6.8 6.1 6.6 Interest income 0.7 0.8 0.6 0.8 ------------- ------------- ------------- ------------- Earnings before income taxes 5.9 7.7 6.8 7.4 Income tax expense 2.3 2.5 2.6 2.5 ------------- ------------- ------------- ------------- Net earnings 3.6 5.2 4.2 4.9 ============= ============= ============= ============= *T -0- *T BUFFALO WILD WINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollar amounts in thousands) (unaudited) December 25, September 24, 2005 2006 ------------ ------------- Assets Current assets: Cash and cash equivalents $3,986 3,457 Marketable securities 48,418 53,133 Accounts receivable--franchisees, net of allowance of $25 and $65 731 871 Accounts receivable--other 3,700 5,187 Inventory 1,502 1,644 Prepaid expenses 1,972 1,736 Deferred income taxes 770 1,871 ------------ ------------- Total current assets 61,079 67,899 Property and equipment, net 68,693 77,624 Restricted cash 2,115 4,328 Other assets 867 892 Goodwill 369 369 ------------ ------------- Total assets $133,123 151,112 ============ ============= Liabilities and Stockholders' Equity Current liabilities: Unearned franchise fees $2,194 2,348 Accounts payable 6,628 8,953 Accrued income tax payable 102 351 Accrued compensation and benefits 6,775 8,061 Accrued expenses 3,900 4,114 Current portion of deferred lease credits 604 722 ------------ ------------- Total current liabilities 20,203 24,549 Long-term liabilities: Marketing fund payables 2,115 4,328 Deferred income taxes 4,755 3,471 Deferred lease credits, net of current portion 9,202 9,439 ------------ ------------- Total liabilities 36,275 41,787 ------------ ------------- Commitments and contingencies Stockholders' equity: Undesignated stock, 5,600,000 shares authorized -- -- Common stock, no par value. Authorized 15,600,000 shares; issued and outstanding 8,616,222 and 8,776,187, respectively 74,503 74,938 Deferred compensation (2,568 ) -- Retained earnings 24,913 34,387 ------------ ------------- Total stockholders' equity 96,848 109,325 ------------ ------------- Total liabilities and stockholders' equity $133,123 151,112 ============ ============= *T -0- *T BUFFALO WILD WINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollar amounts in thousands) (unaudited) Nine months ended --------------------------- September 25, September 24, 2005 2006 ------------- ------------- Cash flows from operating activities: Net earnings $6,262 9,474 Adjustments to reconcile net earnings to cash provided by operations: Depreciation 8,505 10,412 Amortization (62) (88) Loss on equipment disposal and impairment 871 356 Deferred lease credits 554 185 Deferred income taxes (1,749) (2,385) Stock-based compensation 1,047 2,208 Excess tax benefit from the exercise of stock options -- (185) Change in operating assets and liabilities: Purchase of marketable securities -- (1,144) Accounts receivable (1,158) (1,457) Inventory (77) (142) Prepaid expenses (285) 236 Other assets 36 (25) Unearned franchise fees (305) 154 Accounts payable 144 (404) Income taxes 2,746 434 Accrued expenses (626) 2,078 ------------- ------------- Net cash provided by operating activities 15,903 19,707 ------------- ------------- Cash flows from investing activities: Acquisition of property and equipment (15,180) (16,970) Purchase of marketable securities (65,590) (76,752) Proceeds of marketable securities 55,847 73,269 ------------- ------------- Net cash used in investing activities (24,923) (20,453) ------------- ------------- Cash flows from financing activities: Issuance of common stock 763 719 Tax payments for restricted stock (326) (687) Excess tax benefit from the exercise of stock options -- 185 ------------- ------------- Net cash provided by financing activities 437 217 ------------- ------------- Net decrease in cash and cash equivalents (8,583) (529) Cash and cash equivalents at beginning of period 12,557 3,986 ------------- ------------- Cash and cash equivalents at end of period $3,974 3,457 ============= ============= *T BUFFALO WILD WINGS, INC. AND SUBSIDIARIES Supplemental Information Restaurant Count Company-owned Restaurants: -0- *T Q1 Q2 Q3 Q4 ----------- ----------- ----------- ------------ 2006 124 129 134 2005 106 110 116 122 2004 88 92 97 103 2003 73 74 77 84 2002 56 60 63 70 *T Franchised Restaurants: -0- *T Q1 Q2 Q3 Q4 ----------- ----------- ----------- ------------ 2006 260 270 278 2005 212 224 234 248 2004 168 175 189 203 2003 131 138 142 161 2002 108 119 123 129 *T Same-Store Sales Company-owned Restaurants: -0- *T Q1 Q2 Q3 Q4 Year ----------- ----------- ----------- ----------- ------------ 2006 7.7% 8.2% 11.8% 2005 6.1% 2.7% 1.8% 2.5% 3.2% 2004 11.1% 10.6% 9.9% 7.6% 9.7% 2003 (1.4%) 2.7% 6.7% 8.5% 4.3% 2002 5.6% 4.6% (0.7%) (1.8%) 1.6% *T Franchised Restaurants: -0- *T Q1 Q2 Q3 Q4 Year ----------- ----------- ----------- ----------- ------------ 2006 6.7% 4.7% 6.4% 2005 3.2% 1.8% 1.1% 2.6% 2.2% 2004 12.0% 10.4% 5.7% 3.7% 7.6% 2003 (0.4%) 2.3% 8.5% 10.7% 5.6% 2002 4.2% 4.5% 0.0% (1.8%) 1.5% *T BUFFALO WILD WINGS, INC. AND SUBSIDIARIES Supplemental Information Average Weekly Sales Volumes Company-owned Restaurants: -0- *T Q1 Q2 Q3 Q4 Year ----------- ----------- ----------- ----------- ------------ 2006 $35,857 $33,660 $35,380 2005 33,195 30,531 31,361 $33,953 $32,304 2004 32,289 30,248 30,983 33,038 31,663 2003 28,782 27,132 28,281 31,171 28,886 2002 29,564 26,330 25,916 28,466 27,547 *T Franchised Restaurants: -0- *T Q1 Q2 Q3 Q4 Year ----------- ----------- ----------- ----------- ------------ 2006 $44,342 $42,338 $42,964 2005 41,309 39,824 40,149 $42,533 $40,999 2004 39,678 38,072 38,727 40,926 39,402 2003 33,920 33,393 35,289 39,014 35,491 2002 32,956 31,623 31,619 34,023 32,574 *T Average Wing Price Per Pound -0- *T Q1 Q2 Q3 Q4 Year ----------- ----------- ----------- ----------- ------------ 2006 $1.24 $1.10 $1.14 2005 1.45 1.14 1.08 $1.17 $1.20 2004 1.49 1.46 1.35 1.30 1.39 2003 1.01 1.02 1.00 1.21 1.06 2002 1.11 .87 .84 .78 .89 *T