Buffalo Wild Wings, Inc. (NASDAQ: BWLD), announced today
financial results for the fourth quarter ended December 26, 2010.
Highlights for the fourth quarter versus the same period a year ago
were:
- Total revenue increased 13.1% to $163.9
million
- Company-owned restaurant sales grew
13.3% to $148.7 million
- Same-store sales decreased 0.3% at
company-owned restaurants and 1.1% at franchised restaurants
- Net earnings increased 22.0% to $10.2
million from $8.3 million, and earnings per diluted share increased
19.6% to $0.55 from $0.46
Sally Smith, President and Chief Executive Officer, commented,
“The fourth quarter completed another successful year for Buffalo
Wild Wings. We increased our brand presence with 80 additional
restaurants across the United States, and our system-wide sales
topped $1.7 billion! We delivered earnings per diluted share of
$0.55 to our shareholders in the fourth quarter and accomplished
net earnings growth of over 25% for the year.”
Total revenue increased 13.1% to $163.9 million in the fourth
quarter compared to $145.0 million in the fourth quarter of 2009.
Company-owned restaurant sales for the quarter increased 13.3% over
the same period in 2009, to $148.7 million, mainly the result of 27
additional company-owned restaurants at the end of fourth quarter
2010 relative to the same period in 2009. Same-store sales at
company-owned locations for the fourth quarter decreased 0.3%.
Franchise royalties and fees increased 10.3% to $15.2 million
versus $13.8 million in the fourth quarter of 2009. This increase
is attributed to 53 additional franchised restaurants at the end of
the period versus a year ago, partially offset by a franchised
same-store sales decrease of 1.1%.
Average weekly sales for company-owned restaurants were $45,595
for the fourth quarter of 2010 compared to $44,583 for the same
quarter last year, a 2.3% increase. Franchised restaurants averaged
$49,837 for the period versus $50,115 in the fourth quarter a year
ago, a 0.6% decrease.
For the fourth quarter, net earnings increased 22.0% to $10.2
million versus $8.3 million in the fourth quarter of 2009. Earnings
per diluted share were $0.55, as compared to fourth quarter 2009
earnings per diluted share of $0.46.
2011 Outlook
Ms. Smith remarked, “We’re just coming off the excitement of
Super Bowl Sunday, and our same-store sales for the first six weeks
of 2011 are strong at 3.8% in company-owned and 1.5% at franchised
locations. As sports fans turn their focus to basketball, we’ll
increase our media presence with attention-getting programming that
supports our Home Court Advantage™ campaign. In our restaurants,
our Team Members are dedicated to delivering an exceptional
‘courtside’ experience to our Guests.”
Ms. Smith concluded, “2011 is another year of growth for Buffalo
Wild Wings. We expect to open more than 100 new restaurants,
including our first units in Canada, and reach our goal of 13% unit
growth for the year. With our strategic emphasis on the core
elements that have built our success: wings, beer, and sports, and
our proven track record of results, we are confident in our ability
to achieve our net earnings goal of over 18% growth for 2011.”
Buffalo Wild Wings will be hosting a conference call today,
February 8, 2011 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 15, 2011.
To access this replay, please dial 1.858.384.5517, password
4402969.
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 740 Buffalo Wild Wings locations
across 44 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 first quarter sales trends and projected unit,
revenue and net earnings growth rates for 2011 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, but not limited to, 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 2011 and beyond, 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 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
27, 2009, 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 26, December
27, December 26, December 27, 2010
2009 2010 2009 Revenue: Restaurant sales $
148,738 131,225 555,184 488,702 Franchise royalties and fees
15,198 13,781 58,072 50,222 Total revenue 163,936
145,006 613,256 538,924 Costs and expenses: Restaurant
operating costs: Cost of sales 42,820 39,720 160,877 147,659 Labor
44,424 38,581 167,193 146,555 Operating 23,231 20,989 88,694 76,358
Occupancy 9,653 8,588 36,501 32,362 Depreciation and amortization
10,433 8,955 39,205 32,605 General and administrative (1) 15,038
13,268 53,996 49,404 Preopening 3,297 2,471 8,398 7,702 Loss on
asset disposals and impairment 432 639 2,051 1,928
Total costs and expenses 149,328 133,211 556,915 494,573
Income from operations 14,608 11,795 56,341 44,351
Investment income 350 209 684 1,077 Earnings before
income taxes 14,958 12,004 57,025 45,428 Income tax expense
4,789 3,666 18,625 14,757 Net earnings $ 10,169 8,338 38,400
30,671 Earnings per common share – basic $ 0.56 0.46 2.11
1.70 Earnings per common share – diluted 0.55 0.46 2.10 1.69
Weighted average shares outstanding – basic 18,200 18,038 18,175
18,010 Weighted average shares outstanding – diluted 18,363 18,208
18,270 18,177 (1) Includes stock-based compensation of
$3,133, $2,212, $7,712, and $6,490, 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 26
December 27, December 26,
December 27,
2010
2009 2010
2009
Revenue: Restaurant sales 90.7 % 90.5 % 90.5 % 90.7 % Franchising
royalties and fees 9.3 9.5 9.5 9.3
Total revenue 100.0 100.0 100.0 100.0
Costs and expenses: Restaurant operating costs: Cost
of sales 28.8 30.3 29.0 30.2 Labor 29.9 29.4 30.1 30.0 Operating
15.6 16.0 16.0 15.6 Occupancy 6.5 6.5 6.6 6.6 Depreciation and
amortization 6.4 6.2 6.4 6.1 General and administrative 9.2 9.1 8.8
9.2 Preopening 2.0 1.7 1.4 1.4 Loss on asset disposals and
impairment 0.3 0.4 0.3 0.4 Total
costs and expenses 91.1 91.9 90.8 91.8
Income from operations 8.9 8.1 9.2 8.2 Investment income 0.2
0.1 0.1 0.2 Earnings before
income taxes 9.1 8.3 9.3 8.4 Income tax expense 2.9 2.5
3.0 2.7 Net earnings 6.2 % 5.8 % 6.3 %
5.7 %
BUFFALO WILD
WINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands) (unaudited)
December 26, December 27, 2010
2009 Assets Current assets: Cash and cash equivalents
$ 15,309 9,580 Marketable securities 56,827 43,632 Accounts
receivable – franchisees, net of allowance of $25 1,086 2,118
Accounts receivable – other 7,947 7,383
Inventory
4,158 3,644 Prepaid expenses 3,505 2,972 Refundable income taxes
6,366 1,872 Deferred income taxes 6,069 2,938 Restricted assets
32,937 24,384 Total current assets 134,204
98,523 Property and equipment, net 224,970 189,639 Other
assets 9,937 9,665 Goodwill 11,246 11,246
Total assets $ 380,357 309,073
Liabilities and
Stockholders’ Equity Current liabilities: Unearned franchise
fees $ 2,109 2,706 Accounts payable 17,632 13,436 Accrued
compensation and benefits 19,324 19,554 Accrued expenses 5,696
6,540 Current portion of deferred lease credits 293 84 System-wide
payables 34,062 24,384 Total current
liabilities 79,116 66,704 Long-term liabilities: Other
liabilities 1,574 1,422 Deferred income taxes 24,557 14,940
Deferred lease credits, net of current portion 18,289
16,174 Total liabilities 123,536 99,240
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 18,214,065 and
18,054,375, respectively 102,484 93,887 Retained earnings 154,346
115,946 Accumulated other comprehensive loss (9 ) —
Total stockholders’ equity 256,821 209,833
Total liabilities and stockholders’ equity $ 380,357 309,073
BUFFALO WILD WINGS,
INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH
FLOWS (Dollar amounts in thousands) (unaudited)
December 26, December 27, 2010
2009 Cash flows from operating activities: Net earnings $
38,400 30,671 Adjustments to reconcile net earnings to cash
provided by operations: Depreciation 38,591 31,993 Amortization 614
612 Loss on asset disposals and impairment 1,835 1,928 Deferred
lease credits 2,217 2,181 Deferred income taxes 6,486 4,817
Stock-based compensation 7,712 6,490 Excess tax benefit from the
exercise of stock options (1,475 ) (1,453 ) Change in operating
assets and liabilities: Trading securities (1,369 ) (2,051 )
Accounts receivable (357 ) (2,663 ) Inventory (514 ) (540 ) Prepaid
expenses (533 ) 322 Other assets (885 ) (490 ) Unearned franchise
fees (597 ) 192 Accounts payable 1,898 1,150 Refundable income
taxes (3,019 ) 1,192 Accrued expenses 695 4,935
Net cash provided by operating activities
89,699 79,286 Cash flows from investing
activities: Acquisition of property and equipment (73,399 ) (73,748
) Purchase of marketable securities (99,165 ) (57,024 ) Proceeds of
marketable securities 87,338 51,600 Net
cash used in investing activities (85,226 ) (79,172 )
Cash flows from financing activities: Issuance of common stock
1,415 1,179 Excess tax benefit from the exercise of stock options
1,475 1,453 Tax payments for restricted stock (1,625 )
(1,513 ) Net cash provided by financing activities
1,265 1,119 Effect of exchange rate changes on
cash and cash equivalents (9 ) — Net increase
in cash and cash equivalents 5,729 1,233 Cash and cash
equivalents at beginning of year 9,580 8,347
Cash and cash equivalents at end of year $ 15,309
9,580
BUFFALO WILD WINGS, INC. AND
SUBSIDIARIES Supplemental Information
Restaurant Count Company-owned Restaurants:
Q1
Q2
Q3
Q4
2010 235 234 244 259
2009 206 215 220 232
2008
165 169 187 197
2007 140 145 148 161
2006 124 129 134
139
Franchised Restaurants:
Q1
Q2
Q3
Q4
2010 430 447 457 473
2009 373 383 400 420
2008
340 346 348 363
2007 299 301 313 332
2006 260 270 278
290
Same-Store Sales Company-owned
Restaurants:
Q1
Q2
Q3
Q4
Year
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 %
2006 7.7 % 8.2 %
11.8 % 13.2 % 10.4 %
Franchised Restaurants:
Q1
Q2
Q3
Q4
Year
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 %
2006 6.7 % 4.7 %
6.4 % 6.5 % 6.1 %
BUFFALO WILD WINGS, INC. AND
SUBSIDIARIES Supplemental Information Average
Weekly Sales Volumes Company-owned Restaurants:
Q1
Q2
Q3
Q4
Year
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
2006
35,857 33,660 35,380 38,800 36,033
Franchised
Restaurants:
Q1
Q2
Q3
Q4
Year
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
2006
44,342 42,338 42,963 46,008 43,975
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