Buffalo Wild Wings, Inc. (NASDAQ: BWLD), announced today
financial results for the third quarter ended September 27, 2009.
Highlights for the third quarter versus the same period a year ago
were:
- Total revenue increased 25.1% to
$132.7 million
- Company-owned restaurant sales
grew 26.0% to $120.3 million
- Same-store sales increased 0.8%
at company-owned restaurants and 1.9% at franchised
restaurants
- Net earnings increased 50.4% to
$6.9 million from $4.6 million, and earnings per diluted share
increased 52.0% to $0.38 from $0.25
Sally Smith, President and Chief Executive Officer, commented,
“Buffalo Wild Wings continues to deliver category-leading
operational and financial performance as demonstrated by our
outstanding third quarter results. Our revenue growth of 25%
produced impressive net earnings growth of 50% over last year,
achieving earnings per diluted share of $0.38. Our results
demonstrate the compelling You Have To Be Here® experience that we
provide to our Guests. I credit our success to the entire Buffalo
Wild Wings Team for their continued dedication to improvement which
delivered these great results.”
Total revenue increased 25.1% to $132.7 million in the third
quarter compared to $106.1 million in the third quarter of 2008.
Company-owned restaurant sales for the quarter increased 26.0% over
the same period in 2008, to $120.3 million driven by a
company-owned same-store sales increase of 0.8% and 33 additional
company-owned restaurants in operation at the end of third quarter
2009 relative to the same period in 2008. Franchise royalties and
fees increased 17.7% to $12.5 million versus $10.6 million in the
third quarter of 2008. This increase was the result of a franchised
same-store sales increase of 1.9% and 52 additional franchised
restaurants at the end of the period versus a year ago.
Average weekly sales for company-owned restaurants were $42,602
for the third quarter of 2009 compared to $42,400 for the same
quarter last year, a 0.5% increase. Franchised restaurants averaged
$48,458 for the period versus $46,889 in the third quarter a year
ago, a 3.3% increase.
For the third quarter, net earnings increased 50.4% to $6.9
million versus $4.6 million in the third quarter of 2008. Earnings
per diluted share were $0.38, as compared to third quarter 2008
earnings per diluted share of $0.25.
2009 and 2010 Outlook
Ms. Smith continued, “Football season is off to a great start
and our same-store sales momentum to date in the fourth quarter
should provide a strong finish to the year. We are confident we
will achieve our 2009 growth goals of 15% unit growth, 25% revenue
growth, and 20 to 25% net earnings growth, with net earnings likely
to be at the higher end of our stated goal.”
Ms. Smith concluded, “With the strong foundation we have built,
we have set goals for 2010 that will uphold Buffalo Wild Wings as a
leader in the casual dining category. Based on our current
development pipeline, we believe we can achieve 13% to 15% unit
growth in 2010, which, along with strong restaurant-level
performance and leveraging our infrastructure, should translate
into net earnings growth of 20%.”
Buffalo Wild Wings will be hosting a conference call today,
October 27, 2009 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 November 3, 2009.
To access this replay, please dial 1.303.590.3030, password
4169893.
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 633 Buffalo Wild Wings
locations across 41 states.
Forward-looking Statements
Certain statements in this release that are not historical facts
are forward-looking statements that involve risks and
uncertainties. These statements include, without limitation, those
relating to our fourth quarter sales and projected unit, revenue
and earnings growth rates for 2009, 2010, and beyond.
Forward-looking 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, unforeseen obstacles in
developing nontraditional sites, the cost of commodities, the
success of our marketing and other initiatives, our ability to
control restaurant labor and other restaurant operating costs,
economic conditions (including changes in consumer preferences or
consumer discretionary spending), the availability of financing to
real estate developers and franchisees, competition, the impact of
applicable regulations, 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
(Amounts in thousands except
per share data)
(unaudited)
Three months ended Nine
months ended September 27,2009 September
28,2008 September 27,2009 September
28,2008 Revenue: Restaurant sales $ 120,290 95,492
357,477 269,850 Franchise royalties and fees 12,451 10,582
36,441 31,354 Total revenue 132,741 106,074 393,918 301,204
Costs and expenses: Restaurant operating costs: Cost of sales
35,809 28,422 107,939 81,085 Labor 36,369 29,289 107,974 82,167
Operating 19,416 15,675 55,369 42,807 Occupancy 8,256 6,273 23,774
17,872 Depreciation and amortization 8,267 5,971 23,650 16,720
General and administrative (1) 12,943 10,684 36,136 29,072
Preopening 1,149 2,476 5,231 5,419 Loss on asset disposals and
impairment 842 930 1,289 2,068 Total costs and expenses
123,051 99,720 361,362 277,210 Income from operations 9,690
6,354 32,556 23,994 Investment income 379 264 868 1,096
Earnings before income taxes 10,069 6,618 33,424 25,090 Income tax
expense 3,197 2,050 11,091 8,382 Net earnings $ 6,872 4,568
22,333 16,708 Earnings per common share – basic $ 0.38 0.26 1.24
0.94 Earnings per common share – diluted 0.38 0.25 1.24 0.93
Weighted average shares outstanding – basic 18,024 17,823 18,001
17,800 Weighted average shares outstanding – diluted 18,098 17,920
18,068 17,903
(1) Includes stock-based compensation of $1,788, $1,297, and
$4,278, and $3,221 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 27,2009 September
28,2008 September 27,2009 September
28,2008 Revenue: Restaurant sales 90.6 % 90.0 % 90.7 %
89.6 % Franchising royalties and fees 9.4 10.0 9.3
10.4 Total revenue 100.0 100.0 100.0
100.0 Costs and expenses: Restaurant operating costs:
Cost of sales 29.8 29.8 30.2 30.0 Labor 30.2 30.7 30.2 30.4
Operating 16.1 16.4 15.5 15.9 Occupancy 6.9 6.6 6.7 6.6
Depreciation and amortization 6.2 5.6 6.0 5.6 General and
administrative 9.8 10.1 9.2 9.7 Preopening 0.9 2.3 1.3 1.8 Loss on
asset disposals and impairment 0.6 0.9 0.3 0.7
Total costs and expenses 92.7 94.0 91.7
92.0 Income from operations 7.3 6.0 8.3 8.0 Investment
income 0.3 0.2 0.2 0.4 Earnings before
income taxes 7.6 6.2 8.5 8.3 Income tax expense 2.4 1.9
2.8 2.8 Net earnings 5.2 4.3 5.7
5.5
BUFFALO WILD WINGS, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
September 27, 2009 and December
28, 2008
(Dollar amounts in
thousands)
(unaudited)
September 27,2009 December
28,2008 Assets Current assets: Cash and cash
equivalents $ 12,083 $ 8,347 Marketable securities 40,283 36,157
Accounts receivable – franchisees, net of allowance of $25 1,037
895 Accounts receivable – other 7,669 5,759 Inventory 3,227 3,104
Prepaid expenses 3,512 3,294 Refundable income taxes 1,510 1,611
Deferred income taxes 4,935 1,731 Total current
assets 74,256 60,898 Property and equipment, net 181,186
154,432 Restricted cash 21,325 7,670 Other assets 9,439 9,846
Goodwill 11,246 10,972 Total assets $ 297,452
243,818
Liabilities and Stockholders’ Equity
Current liabilities:
Unearned franchise fees $ 2,769 2,514 Accounts payable 19,682
16,691 Accrued compensation and benefits 15,968 14,155 Accrued
expenses 6,487 7,116 Current portion of deferred lease credits
76 56 Total current liabilities 44,982 40,532
Long-term liabilities: Other liabilities 1,388 1,270 System-wide
payables 21,325 7,670 Deferred income taxes 15,119 8,916 Deferred
lease credits, net of current portion 15,595 13,837
Total liabilities 98,409 72,225 Commitments and
contingencies Stockholders’ equity: Undesignated stock, 1,000,000
shares authorized; none issued — —
Common stock, no par value.
Authorized 44,000,000 shares; issued andoutstanding 18,025,351 and
17,887,271 respectively
91,435 86,318 Retained earnings 107,608 85,275 Total
stockholders’ equity 199,043 171,593 Total
liabilities and stockholders’ equity $ 297,452 243,818
BUFFALO WILD WINGS, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(Dollar amounts in
thousands)
(unaudited)
Nine months ended
September
27,2009
September
28,2008
Cash flows from operating activities: Net earnings $ 22,333 16,708
Adjustments to reconcile net earnings to cash provided by
operations: Depreciation 23,191 16,720 Amortization 459 80 Loss on
asset disposals and impairment 1,289 2,068 Deferred lease credits
1,705 1,426 Deferred income taxes 2,999 3,929 Stock-based
compensation 4,278 3,221 Excess tax benefit from the exercise of
stock options (418 ) (435 ) Change in operating assets and
liabilities, net of effect of acquisition: Trading securities
(1,731 ) (164 ) Accounts receivable (1,979 ) (62 ) Inventory (123 )
(327 ) Prepaid expenses (218 ) 438 Other assets (52 ) (429 )
Unearned franchise fees 255 53 Accounts payable 2,792 2,519
Refundable income tax 519 1,016 Accrued expenses 2,662
1,511 Net cash provided by operating activities
57,961 47,272 Cash flows from investing
activities: Acquisition of property and equipment (51,309 ) (48,378
) Acquisition of franchised restaurants — (23,071 ) Purchase of
marketable securities (39,115 ) (98,984 ) Proceeds of marketable
securities 36,720 125,156 Net cash used in
investing activities (53,704 ) (45,277 ) Cash flows from
financing activities: Issuance of common stock 574 569 Tax payments
for restricted stock units (1,513 ) (989 ) Excess tax benefit from
the exercise of stock options 418 435 Net cash
provided by (used in) financing activities (521 ) 15
Net increase in cash and cash equivalents 3,736 3,010 Cash and cash
equivalents at beginning of period 8,347 1,521
Cash and cash equivalents at end of period $ 12,083 4,531
BUFFALO WILD WINGS, INC. AND
SUBSIDIARIES
Supplemental
Information
Restaurant Count
Company-owned
Restaurants:
Q1
Q2
Q3
Q4
2009 206 215 220
2008 165 169 187 197
2007 140
145 148 161
2006 124 129 134 139
2005 106 110 116 122
Franchised Restaurants:
Q1
Q2
Q3
Q4
2009 373 383 400
2008 340 346 348 363
2007 299
301 313 332
2006 260 270 278 290
2005 212 224 234 248
Same-Store Sales
Company-owned
Restaurants:
Q1
Q2
Q3
Q4
Year
2009 6.4 % 2.8 % 0.8 %
2008 4.1 % 8.3 % 6.8 % 4.5 %
5.9 %
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
%
Franchised Restaurants:
Q1
Q2
Q3
Q4
Year
2009 6.0 % 3.7 % 1.9 %
2008 2.1 % 4.5 % 2.1 % 2.5 %
2.8 %
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 %
Average Weekly Sales
Volumes
Company-owned
Restaurants:
Q1
Q2
Q3
Q4
Year
2009 $45,593 42,938 42,602
2008 41,438 40,572 42,400
43,864 42,141
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
Franchised Restaurants:
Q1
Q2
Q3
Q4
Year
2009 $50,729 48,619 48,458
2008 47,812 46,390 46,889
48,424 47,382
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
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