BWLD Buffalo Wild Wings, Inc. (delisted)

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