Buffalo Wild Wings, Inc. (NASDAQ: BWLD), announced today
financial results for the third quarter ended September 25, 2011.
Highlights for the third quarter versus the same period a year ago
were:
- Total revenue increased 30.7% to $197.8
million
- Company-owned restaurant sales grew
32.2% to $181.0 million
- Same-store sales increased 5.7% at
company-owned restaurants and 4.2% at franchised restaurants
- Net earnings increased 32.5% to $11.3
million from $8.5 million, and earnings per diluted share increased
29.8% to $0.61 from $0.47
Sally Smith, President and Chief Executive Officer, commented,
“Demand for the Buffalo Wild Wings brand is apparent in our strong
same-store sales for the third quarter, with an increase of 5.7% at
company-owned restaurants and 4.2% at franchised locations. Unit
growth and strong sales in our new and existing restaurants
combined to achieve a substantial increase in revenue of 30.7%. We
leveraged this revenue growth to accomplish net earnings growth of
over 32%, providing our shareholders with earnings per diluted
share of $0.61.”
Total revenue increased 30.7% to $197.8 million in the third
quarter compared to $151.3 million in the third quarter of 2010.
Company-owned restaurant sales for the quarter increased 32.2% over
the same period in 2010, to $181.0 million, driven by a
company-owned same-store sales increase of 5.7% and 44 additional
company-owned restaurants at the end of third quarter 2011 relative
to the same period in 2010. Franchise royalties and fees increased
16.2% to $16.7 million for the quarter versus $14.4 million in the
third quarter of 2010. This increase is attributed to a franchise
same-store sales increase of 4.2% and 41 additional franchised
restaurants at the end of the period versus a year ago.
Average weekly sales for company-owned restaurants were $49,461
for the third quarter of 2011 compared to $44,394 for the same
quarter last year, an 11.4% increase. Franchised restaurants
averaged $51,350 for the period versus $49,005 in the third quarter
a year ago, a 4.8% increase.
For the third quarter, net earnings increased 32.5% to $11.3
million versus $8.5 million in the third quarter of 2010. Earnings
per diluted share were $0.61, as compared to third quarter 2010
earnings per diluted share of $0.47.
2011 and 2012 Outlook
Ms. Smith remarked, "We're pleased with our strong sales
momentum as we approach the end of this year. For the first three
weeks of the fourth quarter, same-store sales are 8.3% at
company-owned restaurants and 6.7% at franchised locations.
Football fans are filling our restaurants and our fourth quarter
marketing plans are stronger than ever. We will reach our goal of
13% unit growth for the year, and we are confident that net
earnings growth will be at least 23% for 2011."
Ms. Smith continued, "2012 is setting up to be another great
year for Buffalo Wild Wings. Our pipeline for restaurant
development will enable us to achieve 12% unit growth. We believe
our ongoing sales strength, unit-level execution, and the benefit
of a 53rd week will overcome rising commodity costs, and we will
achieve net earnings growth of 20% in 2012."
Ms. Smith concluded, “This is an exciting time for our brand.
We’ll achieve our goal of 1,000 Buffalo Wild Wings restaurants in
North America in 2013. And, we’ll continue to grow to 1,500
locations in the United States and Canada, with hundreds more
across the globe in the coming years.”
Buffalo Wild Wings will be hosting a conference call today,
October 19, 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 October 26, 2011.
To access this replay, please dial 1.858.384.5517 password
4478165.
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 18 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 795 Buffalo Wild Wings locations
across 45 states in the United States, as well as in Canada.
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, 2012, and beyond, including but not limited to those
relating to our fourth quarter sales trends and projected unit and
net earnings growth rates for 2011, 2012, 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, 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
Nine months ended September 25,
September 26, September 25,
September 26, 2011 2010 2011
2010 Revenue: Restaurant sales $ 181,036 136,953 514,459
406,446 Franchise royalties and fees 16,727 14,395
49,555 42,874 Total revenue 197,763 151,348
564,014 449,320 Costs and expenses: Restaurant operating
costs: Cost of sales 51,655 38,232 143,654 118,057 Labor 54,783
41,995 154,970 122,769 Operating 28,537 22,835 78,134 65,463
Occupancy 11,195 9,131 32,081 26,848 Depreciation and amortization
12,748 9,766 35,701 28,772 General and administrative (1) 18,336
14,003 53,394 38,958 Preopening 3,864 2,789 10,367 5,101 Loss on
asset disposals and store closures 612 682 1,515
1,619 Total costs and expenses 181,730 139,433
509,816 407,587 Income from operations 16,033 11,915 54,198
41,733 Investment income (loss) (374 ) 305 (170 ) 334
Earnings before income taxes 15,659 12,220 54,028 42,067 Income tax
expense 4,393 3,716 17,228 13,836 Net earnings
$ 11,266 8,504 36,800 28,231 Earnings per common
share – basic $ 0.61 0.47 2.01 1.55 Earnings per common share –
diluted 0.61 0.47 2.00 1.55 Weighted average shares outstanding –
basic 18,352 18,187 18,330 18,167 Weighted average shares
outstanding – diluted 18,520 18,253 18,433 18,238
(1) Includes stock-based compensation of $2,691, $2,041, $8,642,
and $4,579, 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 25,
September 26, September 25,
September 26, 2011 2010 2011
2010 Revenue: Restaurant sales 91.5 % 90.5 % 91.2 % 90.5 %
Franchising royalties and fees 8.5 9.5 8.8 9.5
Total revenue 100.0 100.0 100.0 100.0
Costs and expenses: Restaurant operating costs: Cost of
sales 28.5 27.9 27.9 29.0 Labor 30.3 30.7 30.1 30.2 Operating 15.8
16.7 15.2 16.1 Occupancy 6.2 6.7 6.2 6.6 Depreciation and
amortization 6.4 6.5 6.3 6.4 General and administrative 9.3 9.3 9.5
8.7 Preopening 2.0 1.8 1.8 1.1 Loss on asset disposals and store
closures 0.3 0.5 0.3 0.4 Total costs
and expenses 91.9 92.1 90.4 90.7 Income
from operations 8.1 7.9 9.6 9.3 Investment income (loss) (0.2 ) 0.2
0.0 0.1 Earnings before income taxes 7.9 8.1
9.6 9.4 Income tax expense 2.2 2.5 3.1 3.1
Net earnings 5.7 5.6 6.5 6.3
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Dollar amounts in
thousands) (unaudited) September
25, December 26, 2011 2010
Assets Current assets: Cash and cash equivalents $ 50,200
15,309 Marketable securities 41,094 56,827 Accounts receivable –
franchisees, net of allowance of $73 and $25 1,388 1,086 Accounts
receivable – other 13,266 7,947 Inventory 4,786 4,158 Prepaid
expenses 4,522 3,505 Refundable income taxes 4,189 6,366 Deferred
income taxes 8,074 6,069 Restricted assets 42,327
32,937 Total current assets 169,846 134,204 Property
and equipment, net 281,832 224,970 Other assets 14,891 9,937
Goodwill 12,399 11,246 Total assets $ 478,968
380,357
Liabilities and Stockholders’
Equity Current liabilities: Unearned franchise fees $ 1,985
2,109 Accounts payable 35,845 17,632 Accrued compensation and
benefits 26,726 19,324 Accrued expenses 10,744 5,696 Current
portion of deferred lease credits — 293 System-wide payables
42,595 34,062 Total current liabilities 117,895
79,116 Long-term liabilities: Other liabilities 1,601 1,574
Deferred income taxes 35,667 24,557 Deferred lease credits, net of
current portion 21,092 18,289 Total
liabilities 176,255 123,536 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 and outstanding
18,352,396 and 18,214,065, respectively 111,995 102,484 Retained
earnings 191,146 154,346 Accumulated other comprehensive loss
(428 ) (9 ) Total stockholders’ equity 302,713
256,821 Total liabilities and stockholders’ equity $ 478,968
380,357
BUFFALO WILD WINGS, INC. AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands) (unaudited)
Nine months ended September 25,
September 26, 2011 2010 Cash flows from
operating activities: Net earnings $ 36,800 28,231 Adjustments to
reconcile net earnings to cash provided by operations: Depreciation
35,065 28,312 Amortization 636 460 Loss on asset disposals and
store closures 1,279 1,425 Deferred lease credits 2,703 1,468
Deferred income taxes 8,220 2,328 Stock-based compensation 8,642
4,579 Excess tax benefit from stock issuance (700 ) (172 ) Change
in operating assets and liabilities: Trading securities 37 (1,072 )
Accounts receivable (5,752 ) (1,432 ) Inventory (632 ) 13 Prepaid
expenses (1,019 ) (953 ) Other assets (2,216 ) (654 ) Unearned
franchise fees (124 ) (441 ) Accounts payable 5,704 3,165 Income
taxes 2,877 (3,553 ) Accrued expenses 13,322 1,342
Net cash provided by operating activities 104,842
63,046 Cash flows for investing activities:
Acquisition of property and equipment (84,651 ) (45,546 ) Purchase
of marketable securities (78,690 ) (84,398 ) Proceeds of marketable
securities 94,387 65,264 Net cash used in
investing activities (68,954 ) (64,680 ) Cash flows
for financing activities: Issuance of common stock 870 795 Tax
payments for restricted stock units (2,481 ) (1,625 ) Excess tax
benefit from stock issuance 700 172 Net cash
used in financing activities (911 ) (658 ) Effect of
exchange rate changes on cash and cash equivalents (86 ) —
Net increase (decrease) in cash and cash equivalents 34,891
(2,292 ) Cash and cash equivalents at beginning of period
15,309 9,580 Cash and cash equivalents at end of
period $ 50,200 7,288
BUFFALO WILD
WINGS, INC. AND SUBSIDIARIES Supplemental Information
Restaurant Count
Company-owned Restaurants:
Q1
Q2
Q3 Q4
2011 263 277 288
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 488 492
498
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 % 5.9
% 5.7 %
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 % 2.7 % 4.2 %
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
47,970 49,461
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 50,995 51,350
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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