Buffalo Wild Wings, Inc. (NASDAQ: BWLD), announced today
financial results for the fourth quarter ended December 27, 2009.
Highlights for the fourth quarter versus the same period a year ago
were:
- Total revenue increased 19.6% to
$145.0 million
- Company-owned restaurant sales
grew 19.5% to $131.2 million
- Same-store sales increased 2.6%
at company-owned restaurants and 2.0% at franchised
restaurants
- Net earnings increased 7.9% to
$8.3 million from $7.7 million, and earnings per diluted share
increased 7.0% to $0.46 from $0.43
Sally Smith, President and Chief Executive Officer, commented,
“The fourth quarter capped off another successful year that
exceeded all of our annual growth goals. Our fast-paced unit growth
throughout 2009 further established our position as a leader in the
casual dining category as we opened 92 additional locations, a 16%
increase in total units. Our 2009 revenue increase of nearly 28% is
testimony that our restaurant team members remained dedicated to
creating a compelling dining experience for our Guests. And, our
focus on bottom-line performance is validated by impressive annual
net earnings growth of over 25%.”
Ms. Smith continued, “In the fourth quarter, we achieved strong
top-line performance as revenue increased 20%, fueled in part by
2.6% same-store sales increases at company-owned restaurants and
2.0% at franchised locations. Net earnings increased 7.9% for the
quarter, yet didn’t hamper our ability to exceed our annual net
earnings goal even though we experienced a quarterly increase in
insurance costs and stock compensation expense.”
Total revenue increased 19.6% to $145.0 million in the fourth
quarter compared to $121.2 million in the fourth quarter of 2008.
Company-owned restaurant sales for the quarter increased 19.5% over
the same period in 2008, to $131.2 million driven by a
company-owned same-store sales increase of 2.6% and 35 additional
company-owned restaurants in operation at the end of fourth quarter
2009 relative to the same period in 2008. Franchise royalties and
fees increased 21.1% to $13.8 million versus $11.4 million in the
fourth quarter of 2008. This increase was the result of a
franchised same-store sales increase of 2.0% and 57 additional
franchised restaurants at the end of the period versus a year
ago.
Average weekly sales for company-owned restaurants were $44,583
for the fourth quarter of 2009 compared to $43,864 for the same
quarter last year, a 1.6% increase. Franchised restaurants averaged
$50,115 for the period versus $48,424 in the fourth quarter a year
ago, a 3.5% increase.
For the fourth quarter, net earnings increased 7.9% to $8.3
million versus $7.7 million in the fourth quarter of 2008. Earnings
per diluted share were $0.46, as compared to fourth quarter 2008
earnings per diluted share of $0.43.
2010 Outlook
“The first quarter is an exciting time for Buffalo Wild Wings
and a great time of year for sports fans!” Ms. Smith remarked. “The
excitement of the Super Bowl, one of our biggest sales days, is
still buzzing as we transition into the Winter Olympics and begin
gearing up for the college basketball tournaments. We’ll debut a
new menu and a new TV spot. In addition, we are operationally
focused on building sales and profitability, with an intense
dedication toward delivering a fun and unique dining
experience.”
Ms. Smith concluded, “We are moving full speed ahead! Buffalo
Wild Wings is a great brand with tremendous opportunity. Despite
the challenges of our economy, our momentum has continued and we
achieved the healthy annual growth goals we set for ourselves. We
are confident we can achieve our new annual goals of 13% to 15%
unit growth and 20% net earnings growth in 2010.”
Buffalo Wild Wings will be hosting a conference call today,
February 11, 2010 at 4:00 p.m. Central Standard 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 February 18, 2010.
To access this replay, please dial 1.303.590.3030, password
4205262.
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 658 Buffalo Wild Wings
locations across 42 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 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, our ability to achieve and
manage our planned expansion, the ability of our franchisees to
open and manage new restaurants, the actual number of locations
opened during 2010 and beyond, market acceptance in the new
geographic regions we enter, unforeseen obstacles in developing
nontraditional sites, 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 sales at company-owned and franchised locations,
the cost of commodities, the success of our key initiatives and our
advertising and marketing campaigns, our ability to control 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, or the
smoking of tobacco, 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
28, 2008, 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 Fiscal years ended
December 27, December 28, December 27,
December 28, 2009 2008 2009
2008 Revenue: Restaurant sales $ 131,225 109,836 488,702
379,686 Franchising royalties and fees 13,781 11,377
50,222 42,731 Total revenue 145,006 121,213 538,924
422,417 Costs and expenses: Restaurant operating costs: Cost of
sales 39,720 32,181 147,659 113,266 Labor 38,581 32,442 146,555
114,609 Operating 20,989 17,398 76,358 60,205 Occupancy 8,588 7,285
32,362 25,157 Depreciation and amortization 8,955 6,902 32,605
23,622 General and administrative (1) 13,268 11,079 49,404 40,151
Preopening 2,471 2,511 7,702 7,930 Loss on asset disposals and
impairment 639 15 1,928 2,083 Total costs and
expenses 133,211 109,813 494,573 387,023 Income from
operations 11,795 11,400 44,351 35,394 Investment income 209
(126 ) 1,077 970 Earnings before income taxes 12,004 11,274 45,428
36,364 Income tax expense 3,666 3,547 14,757 11,929
Net earnings $ 8,338 7,727 30,671 24,435 Earnings per common
share – basic $ 0.46 0.43 1.70 1.37 Earnings per common share –
diluted 0.46 0.43 1.69 1.36 Weighted average shares outstanding –
basic 18,038 17,854 18,010 17,813 Weighted average shares
outstanding – diluted 18,208 18,011 18,177 17,995
(1) Includes stock-based compensation of $2,212, $1,679, $6,490,
and $4,900, 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 Fiscal years ended
December 27, December 28, December 27,
December 28, 2009 2008 2009
2008 Revenue: Restaurant sales 90.5 % 90.6 % 90.7 % 89.9 %
Franchising royalties and fees 9.5 9.4 9.3
10.1 Total revenue 100.0 100.0 100.0
100.0 Costs and expenses: Restaurant operating costs: Cost
of sales 30.3 29.3 30.2 29.8 Labor 29.4 29.5 30.0 30.2 Operating
16.0 15.8 15.6 15.9 Occupancy 6.5 6.6 6.6 6.6 Depreciation and
amortization 6.2 5.7 6.1 5.6 General and administrative 9.1 9.1 9.2
9.5 Preopening 1.7 2.1 1.4 1.9 Loss on asset disposals and
impairment 0.4 0.0 0.4 0.5 Total costs
and expenses 91.9 90.6 91.8 91.6 Income
from operations 8.1 9.4 8.2 8.4 Investment income 0.1 (0.1 )
0.2 0.2 Earnings before income taxes 8.3 9.3 8.4 8.6
Income tax expense 2.5 2.9 2.7 2.8 Net
earnings 5.8 % 6.4 % 5.7 % 5.8 %
BUFFALO WILD WINGS, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
December 27, 2009 and December
28, 2008
(Dollar amounts in
thousands)
(unaudited)
December 27, December 28, 2009
2008 Assets Current assets: Cash and cash equivalents
$ 9,580 8,347 Marketable securities 43,632 36,157 Accounts
receivable – franchisees, net of allowance of $25 2,118 895
Accounts receivable – other 7,383 5,759 Inventory 3,644 3,104
Prepaid expenses 2,972 3,294 Refundable income taxes 1,872 1,611
Deferred income taxes 2,938 1,731 Total current assets
74,139 60,898 Property and equipment, net 189,639 154,432
Restricted assets 24,384 7,670 Other assets 9,665 9,846 Goodwill
11,246 10,972 Total assets $ 309,073 243,818
Liabilities and Stockholders’ Equity Current liabilities:
Unearned franchise fees $ 2,706 2,514 Accounts payable 13,436
16,691 Accrued compensation and benefits 19,554 14,155 Accrued
expenses 6,540 7,116 Current portion of deferred lease credits
84 56 Total current liabilities 42,320 40,532
Long-term liabilities: Other liabilities 1,422 1,270 System-wide
payables 24,384 7,670 Deferred income taxes 14,940 8,916 Deferred
lease credits, net of current portion 16,174 13,837 Total
liabilities 99,240 72,225 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 18,054,375 and 17,887,271,
respectively 93,887 86,318 Retained earnings 115,946 85,275
Total stockholders’ equity 209,833 171,593 Total liabilities
and stockholders’ equity $ 309,073 243,818
BUFFALO WILD WINGS, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(Dollar amounts in
thousands)
(unaudited)
Fiscal years ended December 27,
December 28, 2009 2008 Cash flows from
operating activities: Net earnings $ 30,671 24,435 Adjustments to
reconcile net earnings to cash provided by operations: Depreciation
31,993 23,415 Amortization 612 207 Loss on asset disposals and
impairment 1,928 2,083 Deferred lease credits 2,181 1,955 Deferred
income taxes 4,817 6,322 Stock-based compensation 6,490 4,900
Excess tax benefit from stock issuance (1,453 ) (615 ) Change in
operating assets and liabilities, net of effect of acquisition:
Trading securities (2,051 ) 23 Accounts receivable (2,663 ) 375
Inventory (540 ) (473 ) Prepaid expenses 322 (152 ) Other assets
(490 ) (608 ) Unearned franchise fees 192 198 Accounts payable
1,150 809 Income taxes 1,192 890 Accrued expenses 4,935
2,343 Net cash provided by operating activities
79,286 66,107 Cash flows from investing
activities: Acquisition of property and equipment (73,748 ) (67,396
) Purchase of marketable securities (57,024 ) (116,259 ) Proceeds
of marketable securities 51,600 146,592 Acquisition of franchised
restaurants — (23,071 ) Net cash used in investing
activities (79,172 ) (60,134 ) Cash flows from financing
activities: Issuance of common stock 1,179 1,227 Excess tax benefit
from stock issuance 1,453 615 Tax payments for restricted stock
(1,513 ) (989 ) Net cash provided by financing activities
1,119 853 Net increase in cash and cash
equivalents 1,233 6,826 Cash and cash equivalents at
beginning of year 8,347 1,521 Cash and cash
equivalents at end of year $ 9,580 8,347
BUFFALO WILD WINGS, INC. AND
SUBSIDIARIES
Supplemental
Information
Restaurant Count
Company-owned
Restaurants:
Q1
Q2
Q3
Q4
2009 206 215 220 232
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 373 383 400 420
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 % 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 %
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 % 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 %
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 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
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 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
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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