Buffalo Wild Wings, Inc. Announces Fourth Quarter Earnings per Share of $1.07

2014 Net Earnings Increased 31.5% to $94.1 Million 

MINNEAPOLIS, Feb. 5, 2015 // GLOBE NEWSWIRE // -- Buffalo Wild Wings, Inc. (Nasdaq:BWLD) announced today financial results for the fourth quarter and fiscal year ended December 28, 2014. Highlights for the fourth quarter versus the same period a year ago were:

  • Total revenue increased 19.7% to $408.9 million
  • Company-owned restaurant sales increased 20.2% to $384.4 million
  • Same-store sales grew 5.9% at company-owned restaurants and 5.1% at franchised restaurants
  • Net earnings decreased (2.4%) to $20.3 million from 20.8 million, and earnings per diluted share decreased (2.7%) to $1.07 from $1.10

Net earnings decreased (2.4%) to $20.3 million from 20.8 million, and earnings per diluted share decreased (2.7%) to $1.07 from $1.10
Sally Smith, President and Chief Executive Officer, commented, "Buffalo Wild Wings had a great year. We grew our net earnings over 31% in 2014, achieving earnings per diluted share of $4.95. Our 2014 same-store sales increased 6.5% at company-owned restaurants and 5.6% at franchised locations. With wall-to-wall televisions and big screens, Buffalo Wild Wings remains the place to cheer on your favorite sports teams. Our restaurants deliver memorable game-day experiences to Guests no matter what the season!"

Ms. Smith continued, "We're exceptionally pleased with our restaurants' performance in the fourth quarter and, in particular, with our same-store sales results of 5.9% at company-owned restaurants and 5.1% at franchised locations. As previously communicated, we anticipated higher food and labor costs compared to the prior year. Food costs rose as the cost per pound for traditional chicken wings increased over the fourth quarter last year. Labor as a percentage of restaurant sales increased primarily due to expansion in states with higher wage rates and staffing of all company-owned restaurants with Guest Experience Captains. Captains are an essential part of the Guest Experience Business Model, which we believe drives sales. We achieved net earnings per share of $1.07 for the quarter, a slight decline from 2013 as a result of the increased food and labor costs."

Total revenue increased 19.7% to $408.9 million in the fourth quarter compared to $341.5 million in the fourth quarter of 2013. Company-owned restaurant sales for the quarter increased 20.2% over the same period in 2013, to $384.4 million, driven by a same-store sales increase at company-owned Buffalo Wild Wings restaurants of 5.9% and 53 additional company-owned Buffalo Wild Wings restaurants at the end of the fourth quarter of 2014 relative to the same period in 2013. Franchise royalties and fees increased 13.0% to $24.5 million for the quarter versus $21.7 million in the fourth quarter of 2013. This increase is attributed to a same-store sales increase at franchised Buffalo Wild Wings locations of 5.1% and 25 additional franchised Buffalo Wild Wings locations at the end of the period versus a year ago.

Average weekly sales for company-owned Buffalo Wild Wings restaurants were $62,119 for the fourth quarter of 2014 compared to $58,204 for the same quarter last year, a 6.7% increase. Franchised Buffalo Wild Wings locations in the United States averaged $63,949 for the period versus $61,167 in the fourth quarter a year ago, a 4.5% increase.

For the fourth quarter, net earnings decreased (2.4%) to $20.3 million versus $20.8 million in the fourth quarter of 2013. Earnings per diluted share were $1.07, as compared to fourth quarter 2013 earnings per diluted share of $1.10.

2015 Outlook

Ms. Smith remarked, "Same-store sales increased 11.9% at company-owned restaurants and 11.1% at franchised locations for the first five weeks of the first quarter of 2015 compared to 4.8% and 2.1%, respectively, for the same period last year. Sales were particularly strong during the college bowl games, including the Buffalo Wild Wings Citrus Bowl™ and the national championship game. With the football season complete, our Guests are looking forward to the excitement and intense competition of the college basketball tournament. As the Official Hangout of NCAA® March Madness®, we'll feature food and beverage items inspired by the tournament's four regions, launch a new national advertising campaign, and have basketball-inspired GameBreak™ competitions."

Ms. Smith concluded, "We will continue our coast-to-coast development this year with the addition of 50 company-owned restaurants and 40 franchised locations, building toward our goal of 1,700 Buffalo Wild Wings in the United States and Canada. Our franchise partner in the Philippines opened their first restaurant in January and franchised locations in Saudi Arabia and United Arab Emirates are expected to open soon. In 2015, we will complete the roll out of tabletop tablets and we are testing menu ordering from tablets in the first half of the year. We are building a platform for long-term sustained growth for our shareholders and remain confident in our 18% net earnings growth goal for 2015."

Buffalo Wild Wings will be hosting a conference call today, February 5, 2015 at 4:00 p.m. Central Standard Time to discuss these results. There will be a simultaneous webcast conducted at our investor website IR.BuffaloWildWings.com.

A replay of the call will be available until February 12, 2015. To access this replay, please dial 1.858.384.5517 password 7200827.

NCAA® and March Madness® are trademarks of the National Collegiate Athletic Association.

About Buffalo Wild Wings, Inc.

Buffalo Wild Wings, Inc., founded in 1982 and headquartered in Minneapolis, is a growing owner, operator and franchisor of Buffalo Wild Wings® 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 21 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 1,070 Buffalo Wild Wings locations in the United States, Canada, and Mexico.

To stay up-to-date on all the latest events and offers for sports fans and wing lovers, like Buffalo Wild Wings on Facebook, follow @BWWings on Twitter and visit www.BuffaloWildWings.com.

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 restaurant performance measures and growth goals, including, but not limited to, those relating to our first quarter sales trends and projected unit and net earnings growth rates for 2015, 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 29, 2013, 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

Twelve months ended

 

December 28,

    December 29,

   December 28,

   December 29,

 

2014

2013

2014

2013

Revenue:

 

 

 

 

Restaurant sales

 $ 384,380

319,830

1,422,990

1,185,351

Franchise royalties and fees

24,536

21,717

93,233

81,368

Total revenue

408,916

341,547

1,516,223

1,266,719

Costs and expenses:

 

 

 

 

Restaurant operating costs:

 

 

 

 

Cost of sales

117,680

95,345

413,890

363,755

Labor

119,569

95,802

444,232

360,302

Operating

58,164

47,353

209,583

174,338

Occupancy

20,883

18,127

78,931

68,394

Depreciation and amortization

27,100

22,164

98,454

84,978

General and administrative

31,875

26,620

118,038

96,182

Preopening

5,175

4,965

13,544

14,647

Loss on asset disposals and impairment

458

1,560

3,827

3,262

Total costs and expenses

380,904

311,936

1,380,499

1,165,858

Income from operations

28,012

29,611

135,724

100,861

Investment income (loss)

(189)

30

(317)

674

Earnings before income taxes

27,823

29,641

135,407

101,535

Income tax expense

7,540

8,826

41,352

29,981

Net earnings including noncontrolling interests

20,283

20,815

94,055

71,554

Net loss attributable to noncontrolling interests

(39)

(39)

Net earnings attributable to Buffalo Wild Wings

 $ 20,322

20,815

94,094

71,554

Earnings per common share - basic

 $ 1.07

1.11

4.98

3.81

Earnings per common share - diluted

 $ 1.07

1.10

4.95

3.79

Weighted average shares outstanding - basic

18,931

18,787

18,908

18,770

Weighted average shares outstanding - diluted

19,051

18,965

19,002

18,872

 

 

 

 

 

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

Twelve months ended

 

December 28,

   December 29,

   December 28,

   December 29,

 

2014

2013

2014

2013

Revenue:

 

 

 

 

Restaurant sales

94.0%

93.6%

93.9%

93.6%

Franchise royalties and fees

6.0

6.4

6.1

6.4

Total revenue

100.0

100.0

100.0

100.0

Costs and expenses:

 

 

 

 

Restaurant operating costs:

 

 

 

 

Cost of sales

30.6

29.8

29.1

30.7

Labor

31.1

30.0

31.2

30.4

Operating

15.1

14.8

14.7

14.7

Occupancy

5.4

5.7

5.5

5.8

Depreciation and amortization

6.6

6.5

6.5

6.7

General and administrative

7.8

7.8

7.8

7.6

Preopening

1.3

1.5

0.9

1.2

Loss on asset disposals and impairment

0.1

0.5

0.3

0.3

Total costs and expenses

93.1

91.3

91.0

92.0

Income from operations

6.9

8.7

9.0

8.0

Investment income (loss)

0.1

Earnings before income taxes

6.8

8.7

8.9

8.0

Income tax expense

1.8

2.6

2.7

2.4

Net earnings including noncontrolling interests

5.0

6.1

6.2

5.6

Net loss attributable to noncontrolling interests

Net earnings attributable to Buffalo Wild Wings

5.0%

6.1%

6.2%

5.6%

 

 

 

 

 

 

 

 

 

 

 

BUFFALO WILD WINGS, INC. AND SUBSIDIARIES

 

CONSOLIDATED BALANCE SHEET

 

(Dollar amounts in thousands)

 

(unaudited)

 

 

 

 

December 28,

December 29,

 

2014

2013

Assets

 

 

Current assets:

 

 

Cash and cash equivalents

 $ 93,329

57,502

Marketable securities

19,547

7,584

Accounts receivable, net of allowance of $25

28,322

21,845

Inventory

11,893

9,492

Prepaid expenses

4,215

4,509

Refundable income taxes

9,779

4,329

Deferred income taxes

15,807

9,287

Restricted assets

81,037

68,208

Total current assets

263,929

182,756

 

 

 

Property and equipment, net

494,401

440,538

Reacquired franchise rights, net

37,631

33,403

Other assets

19,399

16,498

Goodwill

38,106

32,533

Total assets

 $ 853,466

705,728

 

 

 

Liabilities and Stockholders' Equity

 

 

Current liabilities:

 

 

Unearned franchise fees

 $ 2,099

1,818

Accounts payable

37,241

31,806

Accrued compensation and benefits

59,161

52,049

Accrued expenses

16,573

13,784

Current portion of deferred lease credits

743

System-wide payables

79,668

67,017

Total current liabilities

195,485

166,474

 

 

 

Long-term liabilities:

 

 

Other liabilities

6,388

1,913

Deferred income taxes

39,815

37,822

Deferred lease credits

37,479

33,711

Total liabilities

279,167

239,920

 

 

 

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 18,937,131 and 18,803,663, respectively

148,114

133,203

Retained earnings

427,695

333,601

Accumulated other comprehensive loss

(2,096)

(996)

Total stockholders' equity

573,713

465,808

Noncontrolling interest

586

Total equity

574,299

465,808

Total liabilities and equity

 $ 853,466

705,728

 

 

 

 

 

 

 

BUFFALO WILD WINGS, INC. AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(Dollar amounts in thousands)

 

(unaudited)

 

 

 

 

Twelve months ended

 

December 28,

    December 29,

 

2014

2013

Cash flows from operating activities:

 

 

Net earnings including noncontrolling interests

 $ 94,055

71,554

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

 

 

Depreciation

93,773

79,881

Amortization

4,681

5,097

Loss on asset disposals and impairment

3,827

3,253

Deferred lease credits

4,331

5,247

Deferred income taxes

(3,946)

(2,209)

Stock-based compensation

14,253

11,496

Excess tax benefit from stock issuance

(2,500)

(5,471)

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

 

 

Trading securities

(972)

(1,287)

Accounts receivable

(3,443)

(2,012)

Inventory

(2,178)

(1,581)

Prepaid expenses

383

(647)

Other assets

(139)

(1,218)

Unearned franchise fees

191

55

Accounts payable

5,343

(1,467)

Income taxes

(2,948)

5,264

Accrued expenses

13,155

13,405

Net cash provided by operating activities

217,866

179,360

Cash flows from investing activities:

 

 

Acquisition of property and equipment

(137,466)

(138,735)

Acquisition of businesses/investments in affiliates

(30,572)

(10,288)

Purchase of marketable securities

(22,991)

Proceeds from marketable securities

12,000

3,282

Net cash used in investing activities

(179,029)

(145,741)

Cash flows from financing activities:

 

 

Proceeds from line of credit

5,000

Repayments of line of credit

(5,000)

Issuance of common stock

3,032

2,514

Excess tax benefit from stock issuance

2,500

5,471

Tax payments for restricted stock units

(7,474)

(4,946)

Net cash used in financing activities

(1,942)

3,039

Effect of exchange rate changes on cash and cash equivalents

(1,068)

(496)

Net increase in cash and cash equivalents

35,827

36,162

Cash and cash equivalents at beginning of period

57,502

21,340

Cash and cash equivalents at end of period

 $ 93,329

57,502

 

 

 

 

 

 

 

BUFFALO WILD WINGS, INC. AND SUBSIDIARIES

Supplemental Information

 

 

 

 

 

Restaurant Count

Company-owned Restaurants (includes Buffalo Wild Wings, Rusty Taco, and Buffalo Wild Wings-owned PizzaRev locations):

 

 

 

 

 

 

Q1

Q2

Q3

Q4

2014

443

449

463

491

2013

397

407

415

434

2012

327

330

343

381

2011

263

277

288

319

2010

235

234

244

259

 

 

 

 

 

Franchised Restaurants (includes Buffalo Wild Wings and Rusty Taco locations):

 

 

 

 

 

 

Q1

Q2

Q3

Q4

2014

569

579

588

591

2013

514

525

534

559

2012

505

505

511

510

2011

488

492

498

498

2010

430

447

457

473

 

 

 

 

 

 

 

 

 

 

 

Same-Store Sales at Buffalo Wild Wings locations in United States and Canada

 

Company-owned Restaurants:

 

 

 

 

 

 

 

Q1

Q2

Q3

Q4

Year

2014

6.6%

7.7%

6.0%

5.9%

6.5%

2013

1.4%

3.8%

4.8%

5.2%

3.9%

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%

 

 

 

 

 

 

Franchised Restaurants:

 

 

 

 

 

 

 

Q1

Q2

Q3

Q4

Year

2014

5.0%

6.5%

5.7%

5.1%

5.6%

2013

2.2%

4.1%

3.9%

3.1%

3.3%

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%)

 

 

 

 

 

 

 

 

 

 

 

 

 

BUFFALO WILD WINGS, INC. AND SUBSIDIARIES

Supplemental Information

 

 

 

 

 

 

Average Weekly Sales Volumes at Buffalo Wild Wings locations in United States and Canada

 

 

 

 

 

 

Company-owned Restaurants:

 

 

 

 

 

 

 

Q1

Q2

Q3

Q4

Year

2014

 $ 60,966

59,403

59,643

62,119

60,470

2013

56,953

54,759

55,592

58,204

56,392

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

 

 

 

 

 

 

Franchised Restaurants:

 

 

 

 

 

 

 

Q1

Q2

Q3

Q4

Year

2014

 $ 63,852

61,845

61,586

63,949

62,595

2013

60,050

58,186

58,926

61,167

59,594

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

 

 

 

 

 

 

SOURCE: Buffalo Wild Wings, Inc.

Investor Contact:

Heather Pribyl
952.253.0731

###

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