Attached files
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| 8-K - FORM 8-K - BUFFALO WILD WINGS INC | bww_8k-042412.htm |
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FOR IMMEDIATE RELEASE
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Investor Relations Contact:
Mary Twinem
952.253.0731
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Mary Twinem – CFO
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Buffalo Wild Wings, Inc. Announces
First Quarter Earnings per Share of $0.98 and
Quarterly Net Earnings Growth of Over 22%
Minneapolis, Minnesota, April 24, 2012 – Buffalo Wild Wings, Inc. (NASDAQ: BWLD), announced today financial results for the first quarter ended March 25, 2012. Highlights for the first quarter versus the same period a year ago were:
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Total revenue increased 37.9% to $251.1 million
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Company-owned restaurant sales grew 40.3% to $232.3 million
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Same-store sales increased 9.2% at company-owned restaurants and 7.3% at franchised restaurants
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Net earnings increased 22.8% to $18.2 million from $14.9 million, and earnings per diluted share increased 21.0% to $0.98 from $0.81
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Sally Smith, President and Chief Executive Officer, commented, “We are pleased with our solid start in 2012, with first quarter same-store sales increases of 9.2% at company-owned restaurants and 7.3% at franchised locations. The combination of strong same-store sales, new restaurant performance, and sales from franchised restaurants acquired in 2011 fueled our substantial revenue increase of 37.9%. We continued to invest in the infrastructure necessary to support our expansion in North America and internationally. Through leveraging expenses at the restaurant level, we limited the impact of higher wing costs. For the first quarter, we achieved net earnings growth of over 22%, and provided value to our shareholders with earnings per diluted share of $0.98.”
Total revenue increased 37.9% to $251.1 million in the first quarter compared to $182.2 million in the first quarter of 2011. Company-owned restaurant sales for the quarter increased 40.3% over the same period in 2011, to $232.3 million, driven by a company-owned same-store sales increase of 9.2% and 64 additional company-owned restaurants at the end of first quarter 2012 relative to the same period in 2011. Franchise royalties and fees increased 13.1% to $18.8 million for the quarter versus $16.6 million in the first quarter of 2011. This increase is attributed to a franchise same-store sales increase of 7.3% and 17 additional franchised restaurants at the end of the period versus a year ago.
Average weekly sales for company-owned restaurants were $55,131 for the first quarter of 2012 compared to $48,845 for the same quarter last year, a 12.9% increase. Franchised restaurants averaged $57,282 for the period versus $52,744 in the first quarter a year ago, an 8.6% increase.
For the first quarter, net earnings increased 22.8% to $18.2 million versus $14.9 million in the first quarter of 2011. Earnings per diluted share were $0.98, as compared to first quarter 2011 earnings per diluted share of $0.81.
2012 Outlook
Ms. Smith remarked, “For the first four weeks of the second quarter, same-store sales are 6.7% at company-owned restaurants and 6.6% at our franchised locations. We’re increasing our advertising over last year with national radio to cover all of our markets and we’re airing a new TV spot. Our Operations Excellence team remains keenly focused on the fundamentals of providing great service to our guests and driving restaurant-level profitability. With solid first quarter results, ongoing same-store sales strength, the benefit of a 53rd week, and expense leveraging, we believe we will achieve our net earnings growth goal of 20% for 2012.”
Ms. Smith concluded, “We continue to implement strategies for long-term growth. Our plans include a development pace to achieve 1,500 locations in North America in the next five to seven years. We’re also actively pursuing international franchising opportunities and investigating potential concepts for acquisition that would provide additional growth. We are innovating around the critical aspects of the Buffalo Wild Wings brand, including our facilities, food and beverage, sports and entertainment, technology, and our service strategy. We believe that with a dedicated focus on our Guest experience and unit-level profitability, we will prudently expand our presence across the globe and generate industry-leading net earnings growth well into the future.”
Buffalo Wild Wings will be hosting a conference call today, April 24, 2012 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 1, 2012. To access this replay, please dial 1.858.384.5517 password 4530757.
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 more than 835 Buffalo Wild Wings locations across 48 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 2012 and beyond, including but not limited to those relating to our second quarter sales trends and projected unit and net earnings growth rates for 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 25, 2011, 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)
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Three months ended
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March 25,
2012
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March 27,
2011
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Revenue:
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Restaurant sales
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$ | 232,316 | 165,527 | |||||
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Franchise royalties and fees
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18,806 | 16,623 | ||||||
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Total revenue
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251,122 | 182,150 | ||||||
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Costs and expenses:
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Restaurant operating costs:
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Cost of sales
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72,151 | 46,264 | ||||||
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Labor
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68,268 | 48,878 | ||||||
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Operating
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32,797 | 24,549 | ||||||
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Occupancy
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12,800 | 10,227 | ||||||
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Depreciation and amortization
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15,531 | 11,022 | ||||||
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General and administrative
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19,424 | 16,292 | ||||||
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Preopening
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2,591 | 2,387 | ||||||
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Loss on asset disposals and store closures
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737 | 411 | ||||||
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Total costs and expenses
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224,299 | 160,030 | ||||||
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Income from operations
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26,823 | 22,120 | ||||||
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Investment income
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410 | 356 | ||||||
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Earnings before income taxes
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27,233 | 22,476 | ||||||
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Income tax expense
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8,988 | 7,615 | ||||||
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Net earnings
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$ | 18,245 | 14,861 | |||||
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Earnings per common share – basic
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$ | 0.98 | 0.81 | |||||
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Earnings per common share – diluted
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0.98 | 0.81 | ||||||
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Weighted average shares outstanding – basic
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18,555 | 18,306 | ||||||
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Weighted average shares outstanding – diluted
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18,638 | 18,375 | ||||||
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:
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Three months ended
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March 25,
2012
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March 27,
2011
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Revenue:
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Restaurant sales
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92.5 | % | 90.9 | % | ||||
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Franchising royalties and fees
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7.5 | 9.1 | ||||||
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Total revenue
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100.0 | 100.0 | ||||||
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Costs and expenses:
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Restaurant operating costs:
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Cost of sales
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31.1 | 27.9 | ||||||
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Labor
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29.4 | 29.5 | ||||||
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Operating
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14.1 | 14.8 | ||||||
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Occupancy
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5.5 | 6.2 | ||||||
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Depreciation and amortization
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6.2 | 6.1 | ||||||
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General and administrative
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7.7 | 8.9 | ||||||
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Preopening
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1.0 | 1.3 | ||||||
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Loss on asset disposals and store closures
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0.3 | 0.2 | ||||||
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Total costs and expenses
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89.3 | 87.9 | ||||||
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Income from operations
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10.7 | 12.1 | ||||||
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Investment income
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0.2 | 0.2 | ||||||
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Earnings before income taxes
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10.8 | 12.3 | ||||||
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Income tax expense
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3.6 | 4.2 | ||||||
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Net earnings
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7.3 | % | 8.2 | % | ||||
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands)
(unaudited)
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March 25,
2012
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December 25,
2011
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Assets
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Current assets:
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Cash and cash equivalents
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$ | 27,342 | 20,530 | |||||
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Marketable securities
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44,141 | 39,956 | ||||||
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Accounts receivable, net of allowance of $25
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16,166 | 12,165 | ||||||
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Inventory
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6,228 | 6,311 | ||||||
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Prepaid expenses
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3,439 | 3,707 | ||||||
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Refundable income taxes
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— | 7,561 | ||||||
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Deferred income taxes
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6,663 | 6,323 | ||||||
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Restricted assets
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32,797 | 42,692 | ||||||
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Total current assets
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136,776 | 139,245 | ||||||
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Property and equipment, net
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312,585 | 310,170 | ||||||
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Other assets
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27,404 | 28,174 | ||||||
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Goodwill
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17,770 | 17,770 | ||||||
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Total assets
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$ | 494,535 | 495,359 | |||||
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Liabilities and Stockholders’ Equity
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Current liabilities:
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Unearned franchise fees
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$ | 1,701 | 1,852 | |||||
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Income tax payable
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1,296 | — | ||||||
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Accounts payable
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22,831 | 30,089 | ||||||
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Accrued compensation and benefits
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27,405 | 30,499 | ||||||
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Accrued expenses
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9,627 | 7,580 | ||||||
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Current portion of deferred lease credits
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367 | — | ||||||
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System-wide payables
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32,919 | 44,250 | ||||||
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Total current liabilities
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96,146 | 114,270 | ||||||
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Long-term liabilities:
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Other liabilities
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1,605 | 1,544 | ||||||
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Deferred income taxes
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38,141 | 38,512 | ||||||
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Deferred lease credits, net of current portion
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23,149 | 23,047 | ||||||
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Total liabilities
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159,041 | 177,373 | ||||||
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Commitments and contingencies
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Stockholders’ equity:
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Undesignated stock, 1,000,000 shares authorized
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— | — | ||||||
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Common stock, no par value. Authorized 44,000,000 shares; issued and outstanding 18,564,152 and 18,377,920 respectively
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112,637 | 113,509 | ||||||
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Retained earnings
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223,017 | 204,772 | ||||||
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Accumulated other comprehensive loss
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(160 | ) | (295 | ) | ||||
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Total stockholders’ equity
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335,494 | 317,986 | ||||||
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Total liabilities and stockholders’ equity
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$ | 494,535 | 495,359 | |||||
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands)
(unaudited)
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Three months ended
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March 25,
2012
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March 27,
2011
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Cash flows from operating activities:
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Net earnings
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$ | 18,245 | 14,861 | |||||
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Adjustments to reconcile net earnings to cash provided by operations:
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Depreciation
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14,852 | 10,871 | ||||||
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Amortization
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679 | 151 | ||||||
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Loss on asset disposals and store closures
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723 | 411 | ||||||
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Deferred lease credits
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838 | 802 | ||||||
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Deferred income taxes
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(711 | ) | 2,806 | |||||
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Stock-based compensation
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1,232 | 2,553 | ||||||
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Excess tax benefit from the exercise of stock options
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(259 | ) | (140 | ) | ||||
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Change in operating assets and liabilities:
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Trading securities
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(519 | ) | (289 | ) | ||||
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Accounts receivable
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(5,676 | ) | (2,796 | ) | ||||
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Inventory
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85 | 39 | ||||||
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Prepaid expenses
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270 | 425 | ||||||
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Other assets
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72 | (468 | ) | |||||
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Unearned franchise fees
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(151 | ) | 5 | |||||
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Accounts payable
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(934 | ) | 2,236 | |||||
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Income taxes
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9,116 | 3,777 | ||||||
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Accrued expenses
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4,378 | 4,565 | ||||||
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Net cash provided by operating activities
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42,240 | 39,809 | ||||||
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Cash flows from investing activities:
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Acquisition of property and equipment
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(23,845 | ) | (18,746 | ) | ||||
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Purchase of marketable securities
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(19,669 | ) | (27,185 | ) | ||||
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Proceeds of marketable securities
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16,003 | 23,401 | ||||||
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Net cash used in investing activities
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(27,511 | ) | (22,530 | ) | ||||
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Cash flows from financing activities:
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Issuance of common stock
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256 | 168 | ||||||
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Excess tax benefit from the exercise of stock options
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259 | 140 | ||||||
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Tax payments for restricted stock
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(8,447 | ) | (2,481 | ) | ||||
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Net cash used in financing activities
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(7,932 | ) | (2,173 | ) | ||||
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Effect of exchange rate changes on cash and cash equivalents
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15 | (4 | ) | |||||
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Net increase in cash and cash equivalents
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6,812 | 15,102 | ||||||
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Cash and cash equivalents at beginning of period
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20,530 | 15,309 | ||||||
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Cash and cash equivalents at end of period
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$ | 27,342 | 30,411 | |||||
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
Supplemental Information
Restaurant Count
Company-owned Restaurants:
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Q1
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Q2
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Q3
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Q4
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2012
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327
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2011
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263
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277
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288
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319
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2010
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235
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234
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244
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259
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2009
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206
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215
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220
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232
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2008
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165
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169
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187
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197
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Franchised Restaurants:
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Q1
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Q2
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Q3
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Q4
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2012
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505
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2011
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488
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492
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498
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498
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2010
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430
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447
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457
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473
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2009
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373
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383
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400
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420
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2008
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340
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346
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348
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363
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Same-Store Sales
Company-owned Restaurants:
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Q1
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Q2
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Q3
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Q4
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Year
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2012
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9.2%
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2011
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3.9%
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5.9%
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5.7%
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8.9%
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6.1%
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2010
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0.1%
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(0.1%)
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2.6%
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(0.3%)
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0.6%
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2009
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6.4%
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2.8%
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0.8%
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2.6%
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3.1%
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2008
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4.1%
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8.3%
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6.8%
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4.5%
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5.9%
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Franchised Restaurants:
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Q1
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Q2
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Q3
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Q4
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Year
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| 2012 | 7.3% | ||||
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2011
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1.6%
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2.7%
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4.2%
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5.9%
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3.6%
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2010
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0.7%
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(0.7%)
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0.3%
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(1.1%)
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(0.2%)
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2009
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6.0%
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3.7%
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1.9%
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2.0%
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3.4%
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2008
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2.1%
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4.5%
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2.1%
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2.5%
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2.8%
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BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
Supplemental Information
Average Weekly Sales Volumes
Company-owned Restaurants:
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Q1
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Q2
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Q3
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Q4
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Year
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2012
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$55,131
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2011
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48,845
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47,970
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49,461
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51,983
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49,627
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2010
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45,327
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43,021
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44,394
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45,595
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44,601
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2009
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45,593
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42,938
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42,602
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44,583
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43,912
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2008
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41,438
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40,572
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42,400
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43,864
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42,141
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Franchised Restaurants:
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Q1
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Q2
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Q3
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Q4
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Year
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2012
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$57,282
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2011
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52,744
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50,995
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51,350
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53,385
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52,081
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2010
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51,532
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49,051
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49,005
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49,837
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49,835
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2009
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50,729
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48,619
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48,458
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50,115
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49,479
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2008
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47,812
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46,390
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46,889
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48,424
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47,382
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