Buffalo Wild Wings, Inc. (Nasdaq: BWLD) announced today financial
results for the fourth quarter ended December 30, 2007. Highlights
for the fourth quarter were: -- Total revenue increased 9.7% to
$91.4 million (13 weeks) from $83.3 million (14 weeks); excluding
the additional operating week in 2006, revenue increased 18.9% over
the prior year -- Company-owned restaurant sales grew 9.1% to $81.0
million (13 weeks) from $74.2 million (14 weeks); excluding the
additional operating week in 2006, company-owned restaurant sales
grew 18.1% over prior year -- Same-store sales increased 3.4% at
company-owned restaurants and 2.3% at franchised restaurants --
Earnings per diluted share of $0.34 (13 weeks) versus $0.38 (14
weeks) from prior year, with the additional operating week in 2006
estimated to have contributed $0.08 per diluted share; excluding
the additional operating week in 2006, earnings per diluted share
increased 13.3% over prior year As a reminder, Buffalo Wild Wings
utilizes a 52- or 53-week fiscal year. The fiscal year ended
December 30, 2007 was a 52-week year, with the fourth quarter
having thirteen weeks. The fiscal year ended December 31, 2006 was
a 53-week year, with the fourth quarter of 2006 having fourteen
weeks. Sally Smith, President and Chief Executive Officer,
commented, "In October of 2006, we shared our 2007 annual
performance goals of 15% unit growth, 20% revenue growth and 25%
net income growth and I am pleased to report that we achieved them
all. We ended the year with 493 locations, and the performance of
newer restaurants drove increases in our average weekly sales
volumes of 7.6% for company-owned and 4.4% for franchised locations
for the year. Our total revenue for the fourth quarter increased
18.9% over prior year, when excluding the additional operating week
in the fourth quarter last year, with same-store sales increases of
3.4% at company-owned and 2.3% at franchised restaurants. More
importantly, for the full year of 2007, our revenue increased
21.3%, excluding the additional operating week in 2006, with
same-store sales increases of 6.9% at company-owned and 3.9% at
franchised restaurants. The fourth quarter of 2007 provided
earnings per diluted share of $0.34, which equates to a 13%
increase over the prior year, when excluding the estimated $0.08
per share benefit due to the additional operating week in 2006. For
the full year of 2007, on a 52-week comparison, our earnings per
diluted share increased more than 30%, to $1.10 per share." Total
revenue, which includes company-owned restaurant sales and
franchise royalties and fees, increased 9.7% to $91.4 million in
the fourth quarter compared to $83.3 million in the fourth quarter
of 2006. Company-owned restaurant sales for the quarter increased
9.1% to $81.0 million driven by a company-owned same-store sales
increase of 3.4% and 22 more company-owned restaurants in operation
at the end of fourth quarter 2007 relative to the same period in
2006. Franchise royalties and fees increased 14.8% to $10.4 million
versus $9.1 million in the prior year. This increase was due to a
franchised same-store sales increase of 2.3% and 42 more franchised
restaurants at the end of the period versus a year ago. Average
weekly sales for company-owned restaurants were $40,485 for the
fourth quarter of 2007 compared to $38,800 for the same quarter
last year, a 4.3% increase. Franchised restaurants averaged $47,293
for the period versus $46,008 in the fourth quarter a year ago, a
2.8% increase. For the fourth quarter, earnings per diluted share
were $0.34, as compared to fourth quarter 2006 earnings per diluted
share of $0.38. Fourth quarter 2006 benefited from an additional
fourteenth week, which contributed an estimated $.08 per diluted
share. 2008 Outlook Ms. Smith continued, "We thank our franchisees
and team members for another great year, and believe that together
we will achieve continued success in 2008. First quarter is well
underway, and our same-store sales to date are 4.1% for our
company-owned and 1.3% at franchised restaurants. We believe our
operational attention to guest service and hospitality and a strong
first-quarter marketing plan will deliver results." In closing, Ms.
Smith stated, "Despite an uncertain economy, we remain committed to
15% unit growth in 2008. While no one can predict how the consumer
will react in a changing economy, and the extent of commodity
increases is still unknown, we are focused on continuing our
four-year trend of positive quarterly same-store sales and our
eight-year trend of average weekly sales volume growth. We believe
that with our unit growth, along with continued sales strength and
an emphasis on cost controls, we can achieve our net income growth
target of 25% in 2008." Buffalo Wild Wings will be hosting a
conference call today, February 12, 2008 at 4:00 p.m. Central
Standard 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 February 19, 2008. To access this replay, please
dial 1.303.590.3030, password 3836783. 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 496 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 anticipated Las Vegas restaurant
acquisition, our expected store openings prior to year-end and our
expectations to meet our 2008 growth goals, 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 timing of obtaining the
requisite regulatory approvals and completing other contingencies
necessary to consummate the Las Vegas restaurant acquisition, the
outcome and impact of the Las Vegas restaurant acquisition, timing
and completion of the Avado restaurant site acquisition, 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 fresh chicken
wings, the success of our marketing initiatives, our ability to
control restaurant labor and 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 and share
amounts in thousands except per share data) (unaudited) Three
months ended (1) Fiscal years ended (1) -------------------------
------------------------- December 30, December 31, December 30,
December 31, 2007 2006 2007 2006 ------------ ------------
------------ ------------ Revenue: Restaurant sales $ 80,950 74,222
292,824 247,150 Franchising royalties and fees 10,435 9,092 36,828
31,033 ------------ ------------ ------------ ------------ Total
revenue 91,385 83,314 329,652 278,183 ------------ ------------
------------ ------------ Costs and expenses: Restaurant operating
costs: Cost of sales 24,899 22,497 90,065 76,087 Labor 23,471
21,608 87,784 73,030 Operating 13,501 12,117 47,974 41,087
Occupancy 5,300 4,721 19,986 17,529 Depreciation 4,783 4,080 16,987
14,492 General and administrative (2) 9,438 8,255 35,740 30,374
Preopening 2,227 801 4,520 3,077 Asset disposals and impairment 449
652 987 1,008 ------------ ------------ ------------ ------------
Total costs and expenses 84,068 74,731 304,043 256,684 ------------
------------ ------------ ------------ Income from operations 7,317
8,583 25,609 21,499 Interest income 686 813 2,909 2,339
------------ ------------ ------------ ------------ Earnings before
income taxes 8,003 9,396 28,518 23,838 Income tax expense 1,998
2,597 8,864 7,565 ------------ ------------ ------------
------------ Net earnings 6,005 6,799 19,654 16,273 ============
============ ============ ============ Earnings per common share -
basic $ 0.34 0.39 1.12 0.95 Earnings per common share - diluted
0.34 0.38 1.10 0.92 Weighted average share outstanding - basic
17,612 17,249 17,554 17,157 Weighted average share outstanding -
diluted 17,860 17,678 17,833 17,629 *T (1) Buffalo Wild Wings, Inc.
operates on a 52/53-week fiscal year, with each quarter in a
52-week fiscal year representing a 13-week period. Fiscal year 2006
was a 53-week fiscal year, with the fourth quarter representing a
14-week period, while fiscal year 2007 was a 52-week fiscal year,
with the fourth quarter representing a 13-week period. (2) Contains
stock-based compensation of $707, $1,008, $3,755, and $3,216,
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: -0- *T Three months ended (1) Fiscal years
ended (1) ------------------------- -------------------------
December 30, December 31, December 30, December 31, 2007 2006 2007
2006 ------------ ------------ ------------ ------------ Revenue:
Restaurant sales 88.6% 89.1% 88.8% 88.8% Franchising royalties and
fees 11.4 10.9 11.2 11.2 ------------ ------------ ------------
------------ Total revenue 100.0 100.0 100.0 100.0 ------------
------------ ------------ ------------ Costs and expenses:
Restaurant operating costs: Cost of sales 30.8 30.3 30.8 30.8 Labor
29.0 29.1 30.0 29.5 Operating 16.7 16.3 16.4 16.6 Occupancy 6.5 6.4
6.8 7.1 Depreciation 5.2 4.9 5.2 5.2 General and administrative
10.3 9.9 10.8 10.9 Preopening 2.4 1.0 1.4 1.1 Asset disposals and
impairment 0.5 0.8 0.3 0.4 ------------ ------------ ------------
------------ Total costs and expenses 92.0 89.7 92.2 92.3
------------ ------------ ------------ ------------ Income from
operations 8.0 10.3 7.8 7.7 Interest income 0.8 1.0 0.9 0.8
------------ ------------ ------------ ------------ Earnings before
income taxes 8.8 11.3 8.7 8.6 Income tax expense 2.2 3.1 2.7 2.7
------------ ------------ ------------ ------------ Net earnings
6.6 8.2 6.0 5.8 ============ ============ ============ ============
*T (1) Buffalo Wild Wings, Inc. operates on a 52/53-week fiscal
year, with each quarter in a 52-week fiscal year representing a
13-week period. Fiscal year 2006 was a 53-week fiscal year, with
the fourth quarter representing a 14-week period, while fiscal year
2007 was a 52-week fiscal year, with the fourth quarter
representing a 13-week period. -0- *T BUFFALO WILD WINGS, INC. AND
SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollar amounts in
thousands) (unaudited) December 30, December 31, 2007 2006
------------ ------------ Assets Current assets: Cash and cash
equivalents $ 1,521 11,756 Marketable securities 66,513 52,829
Accounts receivable - franchisees, net of allowance of $25 and $47,
respectively 885 929 Accounts receivable - other 6,976 5,212
Inventory 2,362 1,767 Prepaid expenses 3,060 1,052 Refundable
income tax 1,886 -- Deferred income taxes 1,303 1,405 ------------
------------ Total current assets 84,506 74,950 Property and
equipment, net 102,742 78,137 Restricted cash 7,161 6,007 Other
assets 2,320 1,720 Goodwill 369 369 ------------ ------------ Total
assets $ 197,098 161,183 ============ ============ Liabilities and
Stockholders' Equity Current liabilities: Unearned franchise fees $
2,316 2,347 Accounts payable 10,692 5,874 Income taxes payable --
264 Accrued compensation and benefits 12,615 10,963 Accrued
expenses 6,207 5,538 Current portion of deferred lease credits 660
794 ------------ ------------ Total current liabilities 32,490
25,780 Long-term liabilities: Other liabilities 1,031 478 Marketing
fund payables 7,161 6,007 Deferred income taxes 2,166 3,162
Deferred lease credits, net of current portion 12,585 9,540
------------ ------------ Total liabilities 55,433 44,967
------------ ------------ Commitments and contingencies
Stockholders' equity: Undesignated stock, 1,000,000 and 5,600,000
shares authorized, respectively; none issued -- -- Common stock, no
par value. Authorized 20,200,000 and 15,600,000 shares,
respectively; issued and outstanding 17,933,497, and 17,591,180,
respectively 80,825 75,030 Retained earnings 60,840 41,186
------------ ------------ Total stockholders' equity 141,665
116,216 ------------ ------------ Total liabilities and
stockholders' equity $ 197,098 161,183 ============ ============ *T
-0- *T BUFFALO WILD WINGS, INC. AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF CASH FLOWS (Dollar amounts in thousands) (unaudited)
Fiscal years ended ------------------------- December 30, December
31, 2007 2006 ------------ ------------ Cash flows from operating
activities: Net earnings $ 19,654 16,273 Adjustments to reconcile
net earnings to cash provided by operations: Depreciation 16,987
14,492 Amortization (54) (54) Asset disposals and impairment 987
1,008 Deferred lease credits 2,374 393 Deferred income taxes (894)
(2,228) Stock-based compensation 3,755 3,216 Excess tax benefit
from stock issuance (1,007) (1,153) Change in operating assets and
liabilities: Purchase of marketable securities (302) (1,288)
Accounts receivable (1,183) (1,575) Inventory (595) (265) Prepaid
expenses (2,008) 920 Other assets (600) (853) Unearned franchise
fees (31) 153 Accounts payable 3,683 (1,884) Income taxes (1,143)
1,315 Accrued expenses 3,956 4,561 ------------ ------------ Net
cash provided by operating activities 43,579 33,031 ------------
------------ Cash flows from investing activities: Acquisition of
property and equipment (41,359) (23,760) Purchase of marketable
securities (158,170) (108,328) Proceeds of marketable securities
144,842 105,259 ------------ ------------ Net cash used in
investing activities (54,687) (26,829) ------------ ------------
Cash flows from financing activities: Issuance of common stock
1,446 1,101 Tax payments for restricted stock (1,580) (686) Excess
tax benefit from stock issuance 1,007 1,153 ------------
------------ Net cash provided by financing activities 873 1,568
------------ ------------ Net increase (decrease) in cash and cash
equivalents (10,235) 7,770 Cash and cash equivalents at beginning
of year 11,756 3,986 ------------ ------------ Cash and cash
equivalents at end of year $ 1,521 11,756 ============ ============
*T -0- *T BUFFALO WILD WINGS, INC. AND SUBSIDIARIES Supplemental
Information Restaurant Count Company-owned Restaurants: Q1 Q2 Q3 Q4
----------- ----------- ----------- ----------- 2007 140 145 148
161 2006 124 129 134 139 2005 106 110 116 122 2004 88 92 97 103
2003 73 74 77 84 Franchised Restaurants: Q1 Q2 Q3 Q4 -----------
----------- ----------- ----------- 2007 299 301 313 332 2006 260
270 278 290 2005 212 224 234 248 2004 168 175 189 203 2003 131 138
142 161 Same-Store Sales Company-owned Restaurants: Q1 Q2 Q3 Q4
Year ----------- ----------- ----------- ----------- ----------
2007 8.7% 8.1% 8.3% 3.4% 6.9% 2006 7.7% 8.2% 11.8% 13.2% 10.4% 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% Franchised Restaurants: Q1 Q2 Q3 Q4 Year
----------- ----------- ----------- ----------- ---------- 2007
3.3% 4.0% 5.9% 2.3% 3.9% 2006 6.7% 4.7% 6.4% 6.5% 6.1% 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% *T -0- *T BUFFALO WILD WINGS, INC. AND
SUBSIDIARIES Supplemental Information Average Weekly Sales Volumes
Company-owned Restaurants: Q1 Q2 Q3 Q4 Year ----------- -----------
----------- ----------- ---------- 2007 $39,254 36,655 38,498
40,485 38,757 2006 35,857 33,660 35,380 38,800 36,033 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 Franchised Restaurants: Q1
Q2 Q3 Q4 Year ----------- ----------- ----------- -----------
---------- 2007 $46,439 43,998 45,879 47,293 45,901 2006 44,342
42,338 42,963 46,008 43,975 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 Average Wing Price Per Pound Q1 Q2 Q3 Q4 Year
----------- ----------- ----------- ----------- ---------- 2007
$1.40 1.25 1.24 1.24 1.28 2006 1.24 1.10 1.14 1.21 1.17 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 *T Buffalo Wild Wings, Inc. (Nasdaq: BWLD) announced
today financial results for the fourth quarter ended December 30,
2007. Highlights for the fourth quarter were: Total revenue
increased 9.7% to $91.4 million (13 weeks) from $83.3 million (14
weeks); excluding the additional operating week in 2006, revenue
increased 18.9% over the prior year Company-owned restaurant sales
grew 9.1% to $81.0 million (13 weeks) from $74.2 million (14
weeks); excluding the additional operating week in 2006,
company-owned restaurant sales grew 18.1% over prior year
Same-store sales increased 3.4% at company-owned restaurants and
2.3% at franchised restaurants Earnings per diluted share of $0.34
(13 weeks) versus $0.38 (14 weeks) from prior year, with the
additional operating week in 2006 estimated to have contributed
$0.08 per diluted share; excluding the additional operating week in
2006, earnings per diluted share increased 13.3% over prior year As
a reminder, Buffalo Wild Wings utilizes a 52- or 53-week fiscal
year. The fiscal year ended December 30, 2007 was a 52-week year,
with the fourth quarter having thirteen weeks. The fiscal year
ended December 31, 2006 was a 53-week year, with the fourth quarter
of 2006 having fourteen weeks. Sally Smith, President and Chief
Executive Officer, commented, �In October of 2006, we shared our
2007 annual performance goals of 15% unit growth, 20% revenue
growth and 25% net income growth and I am pleased to report that we
achieved them all. We ended the year with 493 locations, and the
performance of newer restaurants drove increases in our average
weekly sales volumes of 7.6% for company-owned and 4.4% for
franchised locations for the year. Our total revenue for the fourth
quarter increased 18.9% over prior year, when excluding the
additional operating week in the fourth quarter last year, with
same-store sales increases of 3.4% at company-owned and 2.3% at
franchised restaurants. More importantly, for the full year of
2007, our revenue increased 21.3%, excluding the additional
operating week in 2006, with same-store sales increases of 6.9% at
company-owned and 3.9% at franchised restaurants. The fourth
quarter of 2007 provided earnings per diluted share of $0.34, which
equates to a 13% increase over the prior year, when excluding the
estimated $0.08 per share benefit due to the additional operating
week in 2006. For the full year of 2007, on a 52-week comparison,
our earnings per diluted share increased more than 30%, to $1.10
per share.� Total revenue, which includes company-owned restaurant
sales and franchise royalties and fees, increased 9.7% to $91.4
million in the fourth quarter compared to $83.3 million in the
fourth quarter of 2006. Company-owned restaurant sales for the
quarter increased 9.1% to $81.0 million driven by a company-owned
same-store sales increase of 3.4% and 22 more company-owned
restaurants in operation at the end of fourth quarter 2007 relative
to the same period in 2006. Franchise royalties and fees increased
14.8% to $10.4 million versus $9.1 million in the prior year. This
increase was due to a franchised same-store sales increase of 2.3%
and 42 more franchised restaurants at the end of the period versus
a year ago. Average weekly sales for company-owned restaurants were
$40,485 for the fourth quarter of 2007 compared to $38,800 for the
same quarter last year, a 4.3% increase. Franchised restaurants
averaged $47,293 for the period versus $46,008 in the fourth
quarter a year ago, a 2.8% increase. For the fourth quarter,
earnings per diluted share were $0.34, as compared to fourth
quarter 2006 earnings per diluted share of $0.38. Fourth quarter
2006 benefited from an additional fourteenth week, which
contributed an estimated $.08 per diluted share. 2008 Outlook Ms.
Smith continued, �We thank our franchisees and team members for
another great year, and believe that together we will achieve
continued success in 2008. First quarter is well underway, and our
same-store sales to date are 4.1% for our company-owned and 1.3% at
franchised restaurants. We believe our operational attention to
guest service and hospitality and a strong first-quarter marketing
plan will deliver results.� In closing, Ms. Smith stated, �Despite
an uncertain economy, we remain committed to 15% unit growth in
2008. While no one can predict how the consumer will react in a
changing economy, and the extent of commodity increases is still
unknown, we are focused on continuing our four-year trend of
positive quarterly same-store sales and our eight-year trend of
average weekly sales volume growth. We believe that with our unit
growth, along with continued sales strength and an emphasis on cost
controls, we can achieve our net income growth target of 25% in
2008.� Buffalo Wild Wings will be hosting a conference call today,
February 12, 2008 at 4:00 p.m. Central Standard 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 February 19, 2008. To access this replay,
please dial 1.303.590.3030, password 3836783. 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 496 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 anticipated
Las Vegas restaurant acquisition, our expected store openings prior
to year-end and our expectations to meet our 2008 growth goals, 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 timing of obtaining the
requisite regulatory approvals and completing other contingencies
necessary to consummate the Las Vegas restaurant acquisition, the
outcome and impact of the Las Vegas restaurant acquisition, timing
and completion of the Avado restaurant site acquisition, 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 fresh chicken
wings, the success of our marketing initiatives, our ability to
control restaurant labor and 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 and share
amounts in thousands except per share data) (unaudited) � � Three
months ended (1) Fiscal years ended (1) December 30,2007 � December
31,2006 December 30,2007 � December 31,2006 � Revenue: Restaurant
sales $ 80,950 74,222 292,824 247,150 Franchising royalties and
fees 10,435 9,092 36,828 31,033 Total revenue 91,385 83,314 329,652
278,183 Costs and expenses: Restaurant operating costs: Cost of
sales 24,899 22,497 90,065 76,087 Labor 23,471 21,608 87,784 73,030
Operating 13,501 12,117 47,974 41,087 Occupancy 5,300 4,721 19,986
17,529 Depreciation 4,783 4,080 16,987 14,492 General and
administrative (2) 9,438 8,255 35,740 30,374 Preopening 2,227 801
4,520 3,077 Asset disposals and impairment 449 652 987 1,008 Total
costs and expenses 84,068 74,731 304,043 256,684 Income from
operations 7,317 8,583 25,609 21,499 Interest income 686 813 2,909
2,339 Earnings before income taxes 8,003 9,396 28,518 23,838 Income
tax expense 1,998 2,597 8,864 7,565 Net earnings 6,005 6,799 19,654
16,273 Earnings per common share � basic $ 0.34 0.39 1.12 0.95
Earnings per common share � diluted 0.34 0.38 1.10 0.92 Weighted
average share outstanding � basic 17,612 17,249 17,554 17,157
Weighted average share outstanding � diluted 17,860 17,678 17,833
17,629 (1) Buffalo Wild Wings, Inc. operates on a 52/53-week fiscal
year, with each quarter in a 52-week fiscal year representing a
13-week period. Fiscal year 2006 was a 53-week fiscal year, with
the fourth quarter representing a 14-week period, while fiscal year
2007 was a 52-week fiscal year, with the fourth quarter
representing a 13-week period. (2) Contains stock-based
compensation of $707, $1,008, $3,755, and $3,216, 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 (1) � Fiscal years ended (1) December
30,2007 � December 31,2006 December 30,2007 � December 31,2006 �
Revenue: Restaurant sales 88.6 % 89.1 % 88.8 % 88.8 % Franchising
royalties and fees 11.4 � 10.9 � 11.2 � 11.2 � Total revenue 100.0
� 100.0 � 100.0 � 100.0 � Costs and expenses: Restaurant operating
costs: Cost of sales 30.8 30.3 30.8 30.8 Labor 29.0 29.1 30.0 29.5
Operating 16.7 16.3 16.4 16.6 Occupancy 6.5 6.4 6.8 7.1
Depreciation 5.2 4.9 5.2 5.2 General and administrative 10.3 9.9
10.8 10.9 Preopening 2.4 1.0 1.4 1.1 Asset disposals and impairment
0.5 � 0.8 � 0.3 � 0.4 � Total costs and expenses 92.0 � 89.7 � 92.2
� 92.3 � Income from operations 8.0 10.3 7.8 7.7 Interest income
0.8 � 1.0 � 0.9 � 0.8 � Earnings before income taxes 8.8 11.3 8.7
8.6 Income tax expense 2.2 � 3.1 � 2.7 � 2.7 � Net earnings 6.6 �
8.2 � 6.0 � 5.8 � (1) Buffalo Wild Wings, Inc. operates on a
52/53-week fiscal year, with each quarter in a 52-week fiscal year
representing a 13-week period. Fiscal year 2006 was a 53-week
fiscal year, with the fourth quarter representing a 14-week period,
while fiscal year 2007 was a 52-week fiscal year, with the fourth
quarter representing a 13-week period. BUFFALO WILD WINGS, INC. AND
SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollar amounts in
thousands) (unaudited) � � December 30, 2007 December 31, 2006
Assets Current assets: Cash and cash equivalents $ 1,521 11,756
Marketable securities 66,513 52,829 Accounts receivable �
franchisees, net of allowance of $25 and $47, respectively 885 929
Accounts receivable � other 6,976 5,212 Inventory 2,362 1,767
Prepaid expenses 3,060 1,052 Refundable income tax 1,886 � Deferred
income taxes � 1,303 1,405 Total current assets 84,506 74,950
Property and equipment, net 102,742 78,137 Restricted cash 7,161
6,007 Other assets 2,320 1,720 Goodwill � 369 369 Total assets $
197,098 161,183 Liabilities and Stockholders� Equity Current
liabilities: Unearned franchise fees $ 2,316 2,347 Accounts payable
10,692 5,874 Income taxes payable � 264 Accrued compensation and
benefits 12,615 10,963 Accrued expenses 6,207 5,538 Current portion
of deferred lease credits � 660 794 Total current liabilities
32,490 25,780 Long-term liabilities: Other liabilities 1,031 478
Marketing fund payables 7,161 6,007 Deferred income taxes 2,166
3,162 Deferred lease credits, net of current portion � 12,585 9,540
Total liabilities � 55,433 44,967 Commitments and contingencies
Stockholders� equity: Undesignated stock, 1,000,000 and 5,600,000
shares authorized, respectively; none issued � � Common stock, no
par value. Authorized 20,200,000 and 15,600,000 shares,
respectively; issued and outstanding 17,933,497, and 17,591,180,
respectively 80,825 75,030 Retained earnings � 60,840 41,186 Total
stockholders� equity � 141,665 116,216 Total liabilities and
stockholders� equity $ 197,098 161,183 BUFFALO WILD WINGS, INC. AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollar amounts
in thousands) (unaudited) � Fiscal years ended December 30, 2007 �
December 31, 2006 Cash flows from operating activities: Net
earnings $ 19,654 16,273 Adjustments to reconcile net earnings to
cash provided by operations: Depreciation 16,987 14,492
Amortization (54 ) (54 ) Asset disposals and impairment 987 1,008
Deferred lease credits 2,374 393 Deferred income taxes (894 )
(2,228 ) Stock-based compensation 3,755 3,216 Excess tax benefit
from stock issuance (1,007 ) (1,153 ) Change in operating assets
and liabilities: Purchase of marketable securities (302 ) (1,288 )
Accounts receivable (1,183 ) (1,575 ) Inventory (595 ) (265 )
Prepaid expenses (2,008 ) 920 Other assets (600 ) (853 ) Unearned
franchise fees (31 ) 153 Accounts payable 3,683 (1,884 ) Income
taxes (1,143 ) 1,315 Accrued expenses � 3,956 � 4,561 � Net cash
provided by operating activities � 43,579 � 33,031 � Cash flows
from investing activities: Acquisition of property and equipment
(41,359 ) (23,760 ) Purchase of marketable securities (158,170 )
(108,328 ) Proceeds of marketable securities � 144,842 � 105,259 �
Net cash used in investing activities � (54,687 ) (26,829 ) Cash
flows from financing activities: Issuance of common stock 1,446
1,101 Tax payments for restricted stock (1,580 ) (686 ) Excess tax
benefit from stock issuance � 1,007 � 1,153 � Net cash provided by
financing activities � 873 � 1,568 � Net increase (decrease) in
cash and cash equivalents (10,235 ) 7,770 � Cash and cash
equivalents at beginning of year � 11,756 � 3,986 � Cash and cash
equivalents at end of year $ 1,521 � 11,756 � BUFFALO WILD WINGS,
INC. AND SUBSIDIARIES Supplemental Information � Restaurant Count
Company-owned Restaurants: � Q1 � Q2 � Q3 � Q4 � 2007 140 145 148
161 2006 124 129 134 139 2005 106 110 116 122 2004 88 92 97 103
2003 73 74 77 84 � Franchised Restaurants: Q1 Q2 Q3 Q4 2007 299 301
313 332 2006 260 270 278 290 2005 212 224 234 248 2004 168 175 189
203 2003 131 138 142 161 � Same-Store Sales Company-owned
Restaurants: Q1 Q2 Q3 Q4 Year 2007 8.7% 8.1% 8.3% 3.4% 6.9% 2006
7.7% 8.2% 11.8% 13.2% 10.4% 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% �
Franchised Restaurants: Q1 Q2 Q3 Q4 Year 2007 3.3% 4.0% 5.9% 2.3%
3.9% 2006 6.7% 4.7% 6.4% 6.5% 6.1% 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%
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES Supplemental Information
� � � � � Average Weekly Sales Volumes Company-owned Restaurants:
Q1 Q2 Q3 Q4 Year 2007 $39,254� 36,655 38,498 40,485 38,757 2006
35,857 33,660 35,380 38,800 36,033 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 � Franchised Restaurants: Q1 Q2 Q3 Q4 Year
2007 $46,439� 43,998 45,879 47,293 45,901 2006 44,342 42,338 42,963
46,008 43,975 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
� Average Wing Price Per Pound � Q1 Q2 Q3 Q4 Year 2007 $1.40� 1.25
1.24 1.24 1.28 2006 1.24 1.10 1.14 1.21 1.17 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
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