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8-K - 8-K - BUFFALO WILD WINGS INCa11-5514_18k.htm

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

 

 

Investor Relations Contact:

Mary Twinem

952.253.0731

Sally Smith – President and CEO

 

Mary Twinem – CFO

 

Buffalo Wild Wings, Inc. Announces
Fourth Quarter Earnings per Share of $0.55 and
Annual Net Earnings Growth of Over 25% for 2010

 

Minneapolis, Minnesota, February 8, 2011Buffalo 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,
2010

 

December 27,
2009

 

December 26,
2010

 

December 27,
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,
2010

 

December 27,
2009

 

December 26,
2010

 

December 27,
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,
2010

 

December 27,
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,
2010

 

December 27,
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