Buffalo Wild Wings, Inc. Announces Fourth Quarter Earnings per Share of $0.55 and Annual Net Earnings Growth of Over 25% for 2010
MINNEAPOLIS, Feb 08, 2011 (BUSINESS WIRE) --
Buffalo 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(TM) 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(TM) 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(TM) to Blazin'(R). 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, December 27, December 26, December 27, 2010 2009 2010 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 restaurantsales:
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, December 27, 2010 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
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, December 27, 2010 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
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