Buffalo Wild Wings, Inc. Announces Fourth Quarter 2009 Results

- Same-store sales increases of 2.6% at company-owned and 2.0% at franchised restaurants
- Earnings per diluted share increase of 7.0% to $0.46 -


MINNEAPOLIS, Feb 11, 2010 (BUSINESS WIRE) -- Buffalo Wild Wings, Inc. (NASDAQ: BWLD), announced today financial results for the fourth quarter ended December 27, 2009. Highlights for the fourth quarter versus the same period a year ago were:

  • Total revenue increased 19.6% to $145.0 million
  • Company-owned restaurant sales grew 19.5% to $131.2 million
  • Same-store sales increased 2.6% at company-owned restaurants and 2.0% at franchised restaurants
  • Net earnings increased 7.9% to $8.3 million from $7.7 million, and earnings per diluted share increased 7.0% to $0.46 from $0.43

Sally Smith, President and Chief Executive Officer, commented, "The fourth quarter capped off another successful year that exceeded all of our annual growth goals. Our fast-paced unit growth throughout 2009 further established our position as a leader in the casual dining category as we opened 92 additional locations, a 16% increase in total units. Our 2009 revenue increase of nearly 28% is testimony that our restaurant team members remained dedicated to creating a compelling dining experience for our Guests. And, our focus on bottom-line performance is validated by impressive annual net earnings growth of over 25%."

Ms. Smith continued, "In the fourth quarter, we achieved strong top-line performance as revenue increased 20%, fueled in part by 2.6% same-store sales increases at company-owned restaurants and 2.0% at franchised locations. Net earnings increased 7.9% for the quarter, yet didn't hamper our ability to exceed our annual net earnings goal even though we experienced a quarterly increase in insurance costs and stock compensation expense."

Total revenue increased 19.6% to $145.0 million in the fourth quarter compared to $121.2 million in the fourth quarter of 2008. Company-owned restaurant sales for the quarter increased 19.5% over the same period in 2008, to $131.2 million driven by a company-owned same-store sales increase of 2.6% and 35 additional company-owned restaurants in operation at the end of fourth quarter 2009 relative to the same period in 2008. Franchise royalties and fees increased 21.1% to $13.8 million versus $11.4 million in the fourth quarter of 2008. This increase was the result of a franchised same-store sales increase of 2.0% and 57 additional franchised restaurants at the end of the period versus a year ago.

Average weekly sales for company-owned restaurants were $44,583 for the fourth quarter of 2009 compared to $43,864 for the same quarter last year, a 1.6% increase. Franchised restaurants averaged $50,115 for the period versus $48,424 in the fourth quarter a year ago, a 3.5% increase.

For the fourth quarter, net earnings increased 7.9% to $8.3 million versus $7.7 million in the fourth quarter of 2008. Earnings per diluted share were $0.46, as compared to fourth quarter 2008 earnings per diluted share of $0.43.

2010 Outlook

"The first quarter is an exciting time for Buffalo Wild Wings and a great time of year for sports fans!" Ms. Smith remarked. "The excitement of the Super Bowl, one of our biggest sales days, is still buzzing as we transition into the Winter Olympics and begin gearing up for the college basketball tournaments. We'll debut a new menu and a new TV spot. In addition, we are operationally focused on building sales and profitability, with an intense dedication toward delivering a fun and unique dining experience."

Ms. Smith concluded, "We are moving full speed ahead! Buffalo Wild Wings is a great brand with tremendous opportunity. Despite the challenges of our economy, our momentum has continued and we achieved the healthy annual growth goals we set for ourselves. We are confident we can achieve our new annual goals of 13% to 15% unit growth and 20% net earnings growth in 2010."

Buffalo Wild Wings will be hosting a conference call today, February 11, 2010 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 18, 2010. To access this replay, please dial 1.303.590.3030, password 4205262.

About the Company

Buffalo Wild Wings, Inc., founded in 1982 and headquartered in Minneapolis, Minnesota, is a growing owner, operator and franchisor of restaurants featuring a variety of boldly-flavored, made-to-order menu items including Buffalo-style chicken wings spun in one of 14 signature sauces. Buffalo Wild Wings is an inviting neighborhood destination with widespread appeal and is the recipient of dozens of "Best Wings" and "Best Sports Bar" awards from across the country. There are currently 658 Buffalo Wild Wings locations across 42 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 fourth quarter sales and projected unit, revenue and earnings growth rates for 2010 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, without limitation, 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 2010 and beyond, market acceptance in the new geographic regions we enter, unforeseen obstacles in developing nontraditional sites, 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 28, 2008, 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 27, December 28, December 27, December 28,
2009 2008 2009 2008
Revenue:
Restaurant sales $ 131,225 109,836 488,702 379,686
Franchising royalties and fees 13,781 11,377 50,222 42,731
Total revenue 145,006 121,213 538,924 422,417
Costs and expenses:
Restaurant operating costs:
Cost of sales 39,720 32,181 147,659 113,266
Labor 38,581 32,442 146,555 114,609
Operating 20,989 17,398 76,358 60,205
Occupancy 8,588 7,285 32,362 25,157
Depreciation and amortization 8,955 6,902 32,605 23,622
General and administrative (1) 13,268 11,079 49,404 40,151
Preopening 2,471 2,511 7,702 7,930
Loss on asset disposals and impairment 639 15 1,928 2,083
Total costs and expenses 133,211 109,813 494,573 387,023
Income from operations 11,795 11,400 44,351 35,394
Investment income 209 (126 ) 1,077 970
Earnings before income taxes 12,004 11,274 45,428 36,364
Income tax expense 3,666 3,547 14,757 11,929
Net earnings $ 8,338 7,727 30,671 24,435
Earnings per common share - basic $ 0.46 0.43 1.70 1.37
Earnings per common share - diluted 0.46 0.43 1.69 1.36
Weighted average shares outstanding - basic 18,038 17,854 18,010 17,813
Weighted average shares outstanding - diluted 18,208 18,011 18,177 17,995
(1) Includes stock-based compensation of $2,212, $1,679, $6,490, and $4,900, 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 27, December 28, December 27, December 28,
2009 2008 2009 2008
Revenue:
Restaurant sales 90.5 % 90.6 % 90.7 % 89.9 %
Franchising royalties and fees 9.5 9.4 9.3 10.1
Total revenue 100.0 100.0 100.0 100.0
Costs and expenses:
Restaurant operating costs:
Cost of sales 30.3 29.3 30.2 29.8
Labor 29.4 29.5 30.0 30.2
Operating 16.0 15.8 15.6 15.9
Occupancy 6.5 6.6 6.6 6.6
Depreciation and amortization 6.2 5.7 6.1 5.6
General and administrative 9.1 9.1 9.2 9.5
Preopening 1.7 2.1 1.4 1.9
Loss on asset disposals and impairment 0.4 0.0 0.4 0.5
Total costs and expenses 91.9 90.6 91.8 91.6
Income from operations 8.1 9.4 8.2 8.4
Investment income 0.1 (0.1 ) 0.2 0.2
Earnings before income taxes 8.3 9.3 8.4 8.6
Income tax expense 2.5 2.9 2.7 2.8
Net earnings 5.8 % 6.4 % 5.7 % 5.8 %
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 27, 2009 and December 28, 2008
(Dollar amounts in thousands)
(unaudited)
December 27, December 28,
2009 2008
Assets
Current assets:
Cash and cash equivalents $ 9,580 8,347
Marketable securities 43,632 36,157
Accounts receivable - franchisees, net of allowance of $25 2,118 895
Accounts receivable - other 7,383 5,759
Inventory 3,644 3,104
Prepaid expenses 2,972 3,294
Refundable income taxes 1,872 1,611
Deferred income taxes 2,938 1,731
Total current assets 74,139 60,898
Property and equipment, net 189,639 154,432
Restricted assets 24,384 7,670
Other assets 9,665 9,846
Goodwill 11,246 10,972
Total assets $ 309,073 243,818
Liabilities and Stockholders' Equity
Current liabilities:
Unearned franchise fees $ 2,706 2,514
Accounts payable 13,436 16,691
Accrued compensation and benefits 19,554 14,155
Accrued expenses 6,540 7,116
Current portion of deferred lease credits 84 56
Total current liabilities 42,320 40,532
Long-term liabilities:
Other liabilities 1,422 1,270
System-wide payables 24,384 7,670
Deferred income taxes 14,940 8,916
Deferred lease credits, net of current portion 16,174 13,837
Total liabilities 99,240 72,225
Commitments and contingencies
Stockholders' equity:
Undesignated stock, 1,000,000 shares authorized -- --
Common stock, no par value. Authorized 44,000,000 shares; issued and 93,887 86,318
outstanding 18,054,375 and 17,887,271, respectively
Retained earnings 115,946 85,275
Total stockholders' equity 209,833 171,593
Total liabilities and stockholders' equity $ 309,073 243,818
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands)
(unaudited)
Fiscal years ended
December 27, December 28,
2009 2008
Cash flows from operating activities:
Net earnings $ 30,671 24,435
Adjustments to reconcile net earnings to cash provided by operations:
Depreciation 31,993 23,415
Amortization 612 207
Loss on asset disposals and impairment 1,928 2,083
Deferred lease credits 2,181 1,955
Deferred income taxes 4,817 6,322
Stock-based compensation 6,490 4,900
Excess tax benefit from stock issuance (1,453 ) (615 )
Change in operating assets and liabilities, net of effect of
acquisition:
Trading securities (2,051 ) 23
Accounts receivable (2,663 ) 375
Inventory (540 ) (473 )
Prepaid expenses 322 (152 )
Other assets (490 ) (608 )
Unearned franchise fees 192 198
Accounts payable 1,150 809
Income taxes 1,192 890
Accrued expenses 4,935 2,343
Net cash provided by operating activities 79,286 66,107
Cash flows from investing activities:
Acquisition of property and equipment (73,748 ) (67,396 )
Purchase of marketable securities (57,024 ) (116,259 )
Proceeds of marketable securities 51,600 146,592
Acquisition of franchised restaurants -- (23,071 )
Net cash used in investing activities (79,172 ) (60,134 )
Cash flows from financing activities:
Issuance of common stock 1,179 1,227
Excess tax benefit from stock issuance 1,453 615
Tax payments for restricted stock (1,513 ) (989 )
Net cash provided by financing activities 1,119 853
Net increase in cash and cash equivalents 1,233 6,826
Cash and cash equivalents at beginning of year 8,347 1,521
Cash and cash equivalents at end of year $ 9,580 8,347
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
Supplemental Information
Restaurant Count
Company-owned Restaurants:
Q1 Q2 Q3 Q4
2009 206 215 220 232
2008 165 169 187 197
2007 140 145 148 161
2006 124 129 134 139
2005 106 110 116 122
Franchised Restaurants:
Q1 Q2 Q3 Q4
2009 373 383 400 420
2008 340 346 348 363
2007 299 301 313 332
2006 260 270 278 290
2005 212 224 234 248
Same-Store Sales
Company-owned Restaurants:
Q1 Q2 Q3 Q4 Year
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 %
2005 6.1 % 2.7 % 1.8 % 2.5 % 3.2 %
Franchised Restaurants:
Q1 Q2 Q3 Q4 Year
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 %
2005 3.2 % 1.8 % 1.1 % 2.6 % 2.2 %
Average Weekly Sales Volumes
Company-owned Restaurants:
Q1 Q2 Q3 Q4 Year
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
2005 33,195 30,531 31,361 33,953 32,304
Franchised Restaurants:
Q1 Q2 Q3 Q4 Year
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
2005 41,309 39,824 40,149 42,533 40,999


SOURCE: Buffalo Wild Wings, Inc.

###

Share this Story:

Comments:

comments powered by Disqus

Franchise News Room »


News By Industry »


Featured Opportunities

ProSource
ProSource is America's largest wholesale home improvement franchise; a truly unique B2B franchise model. Our owners enjoy strong cash flow with...
Firehouse Subs
We are currently looking for hard-working, dedicated people to become Area Representatives in markets throughout the United States.
Learning Express
Learning Express is the nation's leading specialty toy store franchise - dedicated to providing toys that encourage learning through play, a...
Club Pilates
Are you looking for an opportunity to explore other paths in your life? Are you trying to change things up or find something that offers you more...
Tony Roma's
After two decades of fast-paced international expansion, we are introducing a new generation of domestic customers to the Tony Roma’s experience....

Subscribe to Franchising.com Express

A Franchise Update Media Production
Franchise Update Media | P.O. Box 20547 // San Jose, CA 95160 // PH. (408) 402-5681
Copyright © 2001 - 2017. All Rights Reserved.

In Loving Memory Of Timothy Gardner (1987-2014)