Buffalo Wild Wings, Inc. (NASDAQ: BWLD), announced today
financial results for the first quarter ended March 27, 2011.
Highlights for the first quarter versus the same period a year ago
were:
- Total revenue increased 19.6% to $182.2
million
- Company-owned restaurant sales grew
20.0% to $165.5 million
- Same-store sales increased 3.9% at
company-owned restaurants and 1.6% at franchised restaurants
- Net earnings increased 40.7% to $14.9
million from $10.6 million, and earnings per diluted share
increased 39.7% to $0.81 from $0.58
Sally Smith, President and Chief Executive Officer, commented,
“We are very pleased with another successful quarter for Buffalo
Wild Wings. Our fast-paced unit growth continued across the country
and our same-store sales were strong throughout the first quarter,
with increases of 3.9% at company-owned restaurants and 1.6% at
franchised locations. Revenue growth of 19.6% and impressive
restaurant-level performance, which benefited from lower costs for
traditional wings and expense leveraging, fueled our net earnings
growth of over 40% for the first quarter, providing our
shareholders with earnings per diluted share of $0.81.”
Total revenue increased 19.6% to $182.2 million in the first
quarter compared to $152.3 million in the first quarter of 2010.
Company-owned restaurant sales for the quarter increased 20.0% over
the same period in 2010, to $165.5 million, driven by a
company-owned same-store sales increase of 3.9% and 28 additional
company-owned restaurants at the end of first quarter 2011 relative
to the same period in 2010. Franchise royalties and fees increased
16.2% to $16.6 million versus $14.3 million in the first quarter of
2010. This increase is attributed to a franchise same-store sales
increase of 1.6% and 58 additional franchised restaurants at the
end of the period versus a year ago.
Average weekly sales for company-owned restaurants were $48,845
for the first quarter of 2011 compared to $45,327 for the same
quarter last year, a 7.8% increase. Franchised restaurants averaged
$52,744 for the period versus $51,532 in the first quarter a year
ago, a 2.4% increase.
For the first quarter, net earnings increased 40.7% to $14.9
million versus $10.6 million in the first quarter of 2010. Earnings
per diluted share were $0.81, as compared to first quarter 2010
earnings per diluted share of $0.58.
2011 Outlook
Ms. Smith remarked, “2011 is off to a strong start. Our
dedication to a great guest experience and operational excellence
during all dayparts is providing sales momentum as we roll into the
summer months. In April, our same-store sales increased 5.3% at
company-owned restaurants and 1.6% at franchised locations. We are
confident we’ll achieve our annual unit goal of 13% growth, with 16
new company-owned and 9 new franchised locations planned to open in
the second quarter, and over 100 total new restaurants expected to
open in the year.”
Ms. Smith concluded, “As we look to the remainder of the year,
we are moving forward with exciting marketing plans and promotions
for the upcoming football season. A disruption to the regular NFL
season has the potential to present a temporary challenge for our
business and many others. Assuming continued strong same-store
sales and low wing costs, we believe we can achieve our annual net
earnings goal of more than 18% growth even if there is an
abbreviated NFL season.”
Buffalo Wild Wings will be hosting a conference call today,
April 26, 2011 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 May 3, 2011. To
access this replay, please dial 1.858.384.5517 password
4432157.
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 753 Buffalo Wild Wings locations
across 45 states.
Forward-looking Statements
Various remarks we make about future expectations, plans, and
prospects for the company constitute forward-looking statements for
purposes of the Safe Harbor provisions under the Private Securities
Litigation Reform Act of 1995. These statements relate to our
future financial and store performance measures and growth goals
for 2011 and beyond, including but not limited to those relating to
our second quarter sales trends and projected unit, revenue and net
earnings growth rates for 2011 and beyond. All statements other
than statements of historical fact are statements that could be
deemed forward-looking statements and are based upon the current
beliefs and expectations of our management. We have attempted to
identify forward-looking statements by terminology, including
“anticipates,” “believes,” “can,” “continue,” “could,” “estimates,”
“expects,” “intends,” “may,” “plans,” “potential,” “predicts,”
“should” or “will” or the negative of these terms or other
comparable terminology. 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, 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 cost of commodities such as traditional chicken wings, the
success of our key initiatives and our advertising and marketing
campaigns, our ability to control restaurant labor and 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,
disruption to the NFL season, 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 26, 2010, 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
March 27, March 28, 2011 2010 Revenue:
Restaurant sales $ 165,527 137,962 Franchise royalties and fees
16,623 14,309 Total revenue 182,150 152,271 Costs and
expenses: Restaurant operating costs: Cost of sales 46,264 42,224
Labor 48,878 40,685 Operating 24,549 21,455 Occupancy 10,227 8,910
Depreciation and amortization 11,022 9,550 General and
administrative (1) 16,292 12,026 Preopening 2,387 1,115 Loss on
asset disposals and store closures 411 411 Total costs and
expenses 160,030 136,376 Income from operations 22,120
15,895 Investment income 356 185 Earnings before income
taxes 22,476 16,080 Income tax expense 7,615 5,519 Net
earnings $ 14,861 10,561 Earnings per common share – basic $ 0.81
0.58 Earnings per common share – diluted 0.81 0.58 Weighted average
shares outstanding – basic 18,306 18,147 Weighted average shares
outstanding – diluted 18,375 18,229
(1) Includes stock-based compensation of $2,553 and $1,225,
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 March
27, March 28, 2011 2010 Revenue:
Restaurant sales 90.9 % 90.6 % Franchising royalties and fees 9.1
9.4 Total revenue 100.0 100.0 Costs and
expenses: Restaurant operating costs: Cost of sales 27.9 30.6 Labor
29.5 29.5 Operating 14.8 15.6 Occupancy 6.2 6.5 Depreciation and
amortization 6.1 6.3 General and administrative 8.9 7.9 Preopening
1.3 0.7 Loss on asset disposals and store closures 0.2 0.3
Total costs and expenses 87.9 89.6 Income from
operations 12.1 10.4 Investment income 0.2 0.1
Earnings before income taxes 12.3 10.6 Income tax expense 4.2
3.6 Net earnings 8.2 % 6.9 %
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Dollar amounts in
thousands) (unaudited) March 27,
December 26, 2011 2010 Assets Current
assets: Cash and cash equivalents $ 30,411 15,309 Marketable
securities 60,901 56,827 Accounts receivable – franchisees, net of
allowance of $25 1,288 1,086 Accounts receivable – other 10,294
7,947 Inventory 4,119 4,158 Prepaid expenses 3,081 3,505 Refundable
income taxes 2,729 6,366 Deferred income taxes 6,686 6,069
Restricted assets 33,785 32,937 Total current
assets 153,294 134,204 Property and equipment, net 237,522
224,970 Other assets 10,253 9,937 Goodwill 11,246
11,246 Total assets $ 412,315 380,357
Liabilities and Stockholders’ Equity Current liabilities:
Unearned franchise fees $ 2,114 2,109 Accounts payable 24,909
17,632 Accrued compensation and benefits 22,198 19,324 Accrued
expenses 6,498 5,696 Current portion of deferred lease credits 81
293 System-wide payables 33,985 34,062 Total
current liabilities 89,785 79,116 Long-term liabilities:
Other liabilities 1,752 1,574 Deferred income taxes 27,980 24,557
Deferred lease credits, net of current portion 18,964
18,289 Total liabilities 138,481 123,536
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
18,321,353 and 18,214,065 respectively 104,644 102,484 Retained
earnings 169,207 154,346 Accumulated other comprehensive loss
(17 ) (9 ) Total stockholders’ equity 273,834
256,821 Total liabilities and stockholders’ equity $ 412,315
380,357
BUFFALO
WILD WINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
CASH FLOWS (Dollar amounts in thousands)
(unaudited) Three months ended March
27, March 28, 2011 2010 Cash flows from
operating activities: Net earnings $ 14,861 10,561 Adjustments to
reconcile net earnings to cash provided by operations: Depreciation
10,871 9,396 Amortization 151 154 Loss on asset disposals and store
closures 411 410 Deferred lease credits 802 537 Deferred income
taxes 2,806 (1,136 ) Stock-based compensation 2,553 1,225 Excess
tax benefit from the exercise of stock options (140 ) (74 ) Change
in operating assets and liabilities: Trading securities (289 ) (205
) Accounts receivable (2,796 ) (953 ) Inventory 39 42 Prepaid
expenses 425 71 Other assets (468 ) (46 ) Unearned franchise fees 5
(115 ) Accounts payable 2,236 866 Income taxes 3,777 6,101 Accrued
expenses 4,565 (2,099 ) Net cash provided by
operating activities 39,809 24,735 Cash flows
from investing activities: Acquisition of property and equipment
(18,746 ) (9,908 ) Purchase of marketable securities (27,185 )
(17,960 ) Proceeds of marketable securities 23,401
9,854 Net cash used in investing activities (22,530 )
(18,014 ) Cash flows from financing activities: Issuance of common
stock 168 123 Excess tax benefit from the exercise of stock options
140 74 Tax payments for restricted stock (2,481 ) (1,625 )
Net cash used in financing activities (2,173 ) (1,428 )
Effect of exchange rate changes on cash and cash equivalents
(4 ) — Net increase in cash and cash equivalents 15,102
5,293 Cash and cash equivalents at beginning of period
15,309 9,580 Cash and cash equivalents at end of
period $ 30,411 14,873
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES Supplemental
Information Restaurant Count
Company-owned Restaurants: Q1
Q2 Q3
Q4
2011
263
2010
235 234 244 259
2009
206 215 220 232
2008
165 169 187 197
2007
140 145 148 161
Franchised Restaurants:
Q1 Q2
Q3 Q4 2011 488
2010 430 447 457 473
2009 373 383 400 420
2008
340 346 348 363
2007 299 301 313 332
Same-Store Sales
Company-owned Restaurants: Q1
Q2 Q3
Q4 Year 2011 3.9 %
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 %
Franchised Restaurants:
Q1 Q2
Q3 Q4
Year 2011 1.6 %
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 %
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES Supplemental
Information Average Weekly Sales Volumes
Company-owned Restaurants:
Q1 Q2
Q3 Q4
Year 2011 $ 48,845
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
Franchised Restaurants:
Q1 Q2
Q3 Q4
Year 2011 $ 52,744
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
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