BWLD Buffalo Wild Wings, Inc. (delisted)

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