Buffalo Wild Wings, Inc. Announces First Quarter Earnings per Share of $0.87

Net Earnings Growth Goal for 2013 Unchanged

MINNEAPOLIS, April 29, 2013 // GLOBE NEWSWIRE // -- Buffalo Wild Wings, Inc. (Nasdaq:BWLD), announced today financial results for the first quarter ended March 31, 2013. Highlights for the first quarter versus the same period a year ago were:

  • Total revenue increased 21.2% to $304.4 million
  • Company-owned restaurant sales grew 22.4% to $284.4 million
  • Same-store sales increased 1.4% at company-owned restaurants and 2.2% at franchised restaurants
  • Net earnings decreased 10.2% to $16.4 million from $18.2 million, and earnings per diluted share decreased 11.2% to $0.87 from $0.98

Sally Smith, President and Chief Executive Officer, commented, "We're pleased with our strong revenue growth in the first quarter of over 21%. For the quarter, same-store sales in company-owned locations increased 1.4%, outpacing the negative same-stores sales in the casual dining category. If you recall, our first quarter includes one less week of the NFL season compared to last year, and our same-store sales at the time of the February earnings call were negative 2.8%, so we're very pleased with the upswing that brought our full quarter same-store sales to a positive 1.4%. This trend continues in April with same-store sales of 5.2%. Our first quarter results are also comping over a substantial same-store sales increase of 9.2% in 2012. Similarly, same-store sales in franchised locations increased 2.2% for the first quarter over strong results of 7.3% last year. We also expanded our presence in North America, with 20 additional restaurants, including our 900th location."

Ms. Smith continued, "For the first quarter, we achieved earnings per diluted share of $0.87. We continued investing capital and labor for our future success, even though we faced the challenge of high wing costs and fluctuating wing yields. We're excited about our Guest Experience business model as it further enhances our brand and we've seen this strategy build incremental sales. In the first quarter, this model incurred higher labor costs than we had last year when it was not in place. We continue to refine this already strong model for operating our restaurants."

Total revenue increased 21.2% to $304.4 million in the first quarter compared to $251.1 million in the first quarter of 2012. Company-owned restaurant sales for the quarter increased 22.4% over the same period in 2012, to $284.4 million, driven by a company-owned same-store sales increase of 1.4% and 70 additional company-owned restaurants at the end of first quarter 2013 relative to the same period in 2012. Franchise royalties and fees increased 6.0% to $19.9 million for the quarter versus $18.8 million in the first quarter of 2012. This increase is attributed to a franchise same-store sales increase of 2.2% and 9 additional franchised restaurants at the end of the period versus a year ago.

Average weekly sales for company-owned restaurants were $56,953 for the first quarter of 2013 compared to $55,131 for the same quarter last year, a 3.3% increase. Franchised restaurants averaged $60,050 for the period versus $57,282 in the first quarter a year ago, a 4.8% increase.

For the first quarter, net earnings decreased 10.2% to $16.4 million versus $18.2 million in the first quarter of 2012. Earnings per diluted share were $0.87, as compared to first quarter 2012 earnings per diluted share of $0.98.

2013 Outlook

Ms. Smith remarked, "We're pleased with our strong same-store sales trend to date in the second quarter of 5.2% at our company-owned restaurants and 5.8% at franchised locations, and we continue to outpace the casual dining industry. We'll have increased advertising in the second quarter with more TV spots in NBA games and our NCAA sponsorship provides new marketing opportunities throughout the year. Wing costs are trending down, easing pressure on our margins, and when we transition to selling wings in consistent portions in July, it will lessen the impact of yield variances."

Ms. Smith concluded, "We believe in our ability to provide a rewarding experience for our Guests while diligently managing our business for long-term success. We have new Guest-facing technologies and have enhanced the sports programming in our restaurants. Our restaurants are beginning to incorporate our new design and we're creating flavorful new products. With continued same-store sales momentum and moderating wing costs, and our disciplined management of labor, we are confident we will achieve 17% net earnings growth for 2013, equating to 25% on a 52-week basis."

Buffalo Wild Wings will be hosting a conference call today, April 29, 2013 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 6, 2013. To access this replay, please dial 1.858.384.5517 password 4613355.

About Buffalo Wild Wings, Inc.

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 20 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 917 Buffalo Wild Wings locations across 49 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 2013 and beyond, including but not limited to those relating to our second quarter sales trends and projected unit and net earnings growth rates for 2013 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), success of acquired restaurants, success of investments in new or emerging concepts, 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 system standards, 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 30, 2012, 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  

 

March 31,

2013

March 25,

2012

Revenue:

 

 

Restaurant sales

$ 284,425

 232,316

Franchise royalties and fees

 19,939

 18,806

Total revenue

 304,364

 251,122

 

 

 

Costs and expenses:

 

 

Restaurant operating costs:

 

 

Cost of sales

 93,091

 72,151

Labor

 85,831

 68,268

Operating

 41,105

 32,797

Occupancy

 16,126

 12,800

Depreciation and amortization

 20,143

 15,531

General and administrative

 21,297

 19,424

Preopening

 4,271

 2,591

Loss on asset disposals and store closures

 571

 737

Total costs and expenses

 282,435

 224,299

 

 

 

Income from operations

 21,929

 26,823

Investment income

 345

 410

Earnings before income taxes

 22,274

 27,233

Income tax expense

 5,895

 8,988

Net earnings

$ 16,379

 18,245

 

 

 

Earnings per common share — basic

$ 0.87

 0.98

Earnings per common share — diluted

 0.87

 0.98

Weighted average shares outstanding — basic

 18,748

 18,555

Weighted average shares outstanding — diluted

 18,803

 18,638

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  

 

March 31,

2013

March 25,

2012

Revenue:

 

 

Restaurant sales

 93.4%

 92.5%

Franchising royalties and fees

 6.6

 7.5

Total revenue

 100.0

 100.0

 

 

 

Costs and expenses:

 

 

Restaurant operating costs:

 

 

Cost of sales

 32.7

 31.1

Labor

 30.2

 29.4

Operating

 14.5

 14.1

Occupancy

 5.7

 5.5

Depreciation and amortization

 6.6

 6.2

General and administrative

 7.0

 7.7

Preopening

 1.4

 1.0

Loss on asset disposals and store closures

 0.2

 0.3

Total costs and expenses

 92.8

 89.3

 

 

 

Income from operations

 7.2

 10.7

Investment income

 0.1

 0.2

Earnings before income taxes

 7.3

 10.8

Income tax expense

 1.9

 3.6

Net earnings

 5.4 %

 7.3 %

 

BUFFALO WILD WINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollar amounts in thousands)

(unaudited)

 

 

 

 

 

 

March 31,

2013

December 30,

2012

Assets

 

 

Current assets:

 

 

Cash and cash equivalents

$ 8,035

 21,340

Marketable securities

 6,807

 9,579

Accounts receivable, net of allowance of $25

 20,404

 20,203

Inventory

 8,718

 7,820

Prepaid expenses

 3,589

 3,869

Refundable income taxes

 — 

 4,122

Deferred income taxes

 8,886

 5,774

Restricted assets

 36,575

 52,829

Total current assets

 93,014

 125,536

 

 

 

Property and equipment, net

 402,207

 386,570

Reacquired franchise rights, net

 37,263

 37,370

Goodwill

 32,415

 32,365

Other assets

 15,681

 9,246

Total assets

$ 580,580

 591,087

 

 

 

Liabilities and Stockholders' Equity

 

 

Current liabilities:

 

 

Unearned franchise fees

$ 1,935

 1,763

Accounts payable

 29,922

 36,418

Accrued compensation and benefits

 24,727

 39,637

Accrued expenses

 10,443

 11,461

Income tax payable

 2,094

 — 

Line of credit

 5,000

 — 

System--wide payables

 36,649

 51,564

Total current liabilities

 110,770

 140,843

 

 

 

Long-term liabilities:

 

 

Other liabilities

 1,862

 1,752

Deferred income taxes

 38,759

 37,128

Deferred lease credits, net of current portion

 29,115

 27,992

Total liabilities

 180,506

 207,715

 

 

 

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 18,757,239 and 18,623,370, respectively

 122,230

 121,450

Retained earnings

 278,426

 262,047

Accumulated other comprehensive loss

 (582)

 (125)

Total stockholders' equity

 400,074

 383,372

Total liabilities and stockholders' equity

$ 580,580

 591,087

 

 

 

 

 

BUFFALO WILD WINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollar amounts in thousands)

(unaudited)

 

 

 

Three months ended  

 

March 31,

2013

March 25,

2012

Cash flows from operating activities:

 

 

Net earnings

$ 16,379

 18,245

Adjustments to reconcile net earnings to net cash provided by operations:

 

 

Depreciation

 18,906

 14,852

Amortization

 1,237

 679

Loss on asset disposals and store closures

 556

 723

Deferred lease credits

 823

 838

Deferred income taxes

(1,481)

(711)

Stock-based compensation

 870

 1,232

Excess tax benefit from stock issuance

(131)

(259)

Change in operating assets and liabilities, net of effect of acquisition:

 

 

Trading securities

(510)

(519)

Accounts receivable

 1,624

(5,676)

Inventory

(795)

 85

Prepaid expenses

 332

 270

Other assets

(418)

 72

Unearned franchise fees

 172

(151)

Accounts payable

(4,716)

(934)

Income taxes

 6,347

 9,116

Accrued expenses

(11,377)

 4,378

Net cash provided by operating activities

 27,818

 42,240

 

 

 

Cash flows from investing activities:

 

 

Acquisition of property and equipment

(34,538)

(23,845)

Acquisition of businesses/investments in affiliates

(10,171)

 — 

Purchase of marketable securities

 —

(19,669)

Proceeds from marketable securities

 3,282

 16,003

Net cash used in investing activities

(41,427)

(27,511)

 

 

 

Cash flows from financing activities:

 

 

Proceeds from line of credit

 5,000

 —

Issuance of common stock

 174

 256

Excess tax benefit from stock issuance

 131

 259

Tax payments for restricted stock

(4,813)

(8,447)

Net cash provided by (used in) financing activities

 492

(7,932)

Effect of exchange rate changes on cash and cash equivalents

(188)

 15

Net increase (decrease) in cash and cash equivalents

(13,305)

 6,812

Cash and cash equivalents at beginning of period

 21,340

 20,530

Cash and cash equivalents at end of period

$ 8,035

 27,342

 

 

 

BUFFALO WILD WINGS, INC. AND SUBSIDIARIES

Supplemental Information

 

 

 

 

 

 

Restaurant Count

 

 

 

 

 

 

Company-owned Restaurants:

 

 

 

 

 

 

 

Q1

Q2

Q3

Q4

 

2013

397

 

 

 

 

2012

327

330

343

381

 

2011

263

277

288

319

 

2010

235

234

244

259

 

2009

206

215

220

232

 

 

 

 

 

 

 

Franchised Restaurants:

 

 

 

 

 

 

 

Q1

Q2

Q3

Q4

 

2013

514

 

 

 

 

2012

505

505

511

510

 

2011

488

492

498

498

 

2010

430

447

457

473

 

2009

373

383

400

420

 

 

 

 

 

 

 

Same-Store Sales

 

 

 

 

 

 

Company-owned Restaurants:

 

 

 

 

 

 

 

Q1

Q2

Q3

Q4

Year

2013

1.4%

 

 

 

 

2012

9.2%

5.3%

6.2%

5.8%

6.6%

2011

3.9%

5.9%

5.7%

8.9%

6.1%

2010

0.1%

(0.1%)

2.6%

(0.3%)

0.6%

2009

6.4%

2.8%

0.8%

2.6%

3.1%

 

 

 

 

 

 

Franchised Restaurants:

 

 

 

 

 

 

 

Q1

Q2

Q3

Q4

Year

2013

2.2%

 

 

 

 

2012

7.3%

5.5%

5.8%

7.4%

6.5%

2011

1.6%

2.7%

4.2%

5.9%

3.6%

2010

0.7%

(0.7%)

0.3%

(1.1%)

(0.2%)

2009

6.0%

3.7%

1.9%

2.0%

3.4%

 

 

 

BUFFALO WILD WINGS, INC. AND SUBSIDIARIES

Supplemental Information

 

 

 

 

 

 

Average Weekly Sales Volumes

 

 

 

 

 

 

Company-owned Restaurants:

 

 

 

 

 

 

 

Q1

Q2

Q3

Q4

Year

2013

$56,953

 

 

 

 

2012

55,131

51,524

52,561

55,595

53,783

2011

48,845

47,970

49,461

51,983

49,627

2010

45,327

43,021

44,394

45,595

44,601

2009

45,593

42,938

42,602

44,583

43,912

 

 

 

 

 

 

Franchised Restaurants:

 

 

 

 

 

 

 

Q1

Q2

Q3

Q4

Year

2013

$60,050

 

 

 

 

2012

57,282

54,766

55,608

58,490

56,570

2011

52,744

50,995

51,350

53,385

52,081

2010

51,532

 49,051

49,005

49,837

49,835

2009

50,729

 48,619

48,458

50,115

49,479

Investor Relations Contact:

Mary Twinem
952.253.0731

Source: Buffalo Wild Wings, Inc.

###

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