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Buffalo Wild Wings, Inc. Announces Third Quarter Earnings Per Share of $1.00

By: Buffalo Wild Wings |  0 Shares     89 Reads

MINNEAPOLIS - October 28, 2015 - (BUSINESS WIRE) - Buffalo Wild Wings, Inc. (NASDAQ: BWLD) announced today financial results for the third quarter ended September 27, 2015. Highlights for the third quarter versus the same period a year ago were:

• Total revenue increased 22.0% to $455.5 million
• Company-owned restaurant sales increased 23.2% to $431.8 million
• Same-store sales increased 3.9% at company-owned restaurants and 1.2% at franchised restaurants
• Net earnings decreased 11.6% to $19.2 million from $21.8 million, and earnings per diluted share decreased 12.2% to $1.00 from $1.14

Sally Smith, President and Chief Executive Officer, commented, "During the third quarter we acquired 41 franchised locations in Texas, New Mexico, and Hawaii, which includes two restaurants under development. We sincerely thank the hundreds of Team Members across the country that were part of the successful transition to company ownership. Combined with our ongoing company-owned development and other franchise acquisitions during the last 12 months, we've increased our company-owned Buffalo Wild Wings locations by 24% compared to a year ago."

Ms. Smith continued, "Our same-store sales in the third quarter increased 3.9% at company-owned restaurants and 1.2% at franchised locations, despite a shift in the sports calendar resulting in one less week of football and fewer pay-per-view events than last year. We estimate this negatively impacted our same-store sales by 80 basis points. Cost of sales and labor as a percentage of restaurant sales were higher compared to the prior year, and, with the additional depreciation, amortization, and other expenses related to the recently completed franchise acquisition, our earnings per diluted share decreased year-over-year to $1.00."

Total revenue increased 22.0% to $455.5 million in the third quarter, compared to $373.5 million in the third quarter of 2014. Company-owned restaurant sales for the quarter increased 23.2% over the same period in 2014, to $431.8 million, driven by a same-store sales increase at company-owned Buffalo Wild Wings restaurants of 3.9% and 109 additional Buffalo Wild Wings restaurants at the end of the third quarter of 2015. Franchise royalties and fees increased 3.6% to $23.8 million for the quarter versus $22.9 million in the third quarter of 2014. This increase is attributed to increased international franchise fees and increased same-store sales of 1.2% for the franchised Buffalo Wild Wings restaurants in operation at the end of the period compared to the same period in 2014.

Average weekly sales for company-owned Buffalo Wild Wings restaurants were $61,831 for the third quarter of 2015, compared to $59,643 for the same quarter last year, a 3.7% increase. Franchised Buffalo Wild Wings restaurants in the United States averaged $62,819 for the period versus $61,586 in the third quarter a year ago, a 2.0% increase.

For the third quarter, net earnings decreased 11.6% to $19.2 million versus $21.8 million in the third quarter of 2014. Earnings per diluted share were $1.00, compared to third quarter 2014 earnings per diluted share of $1.14.

2015 and 2016 Outlook

Ms. Smith remarked, "Same-store sales increased 2.8% at company-owned restaurants and 0.8% at franchised locations for the first four weeks of the fourth quarter of 2015 compared to 5.4% and 5.1%, respectively, for the same period last year. As we approach year end, we know our Guests will be rooting for their favorite NFL teams to reach the Super Bowl and their favorite college teams to reach a bowl game. We're excited to be the title sponsor of the Buffalo Wild Wings Citrus Bowl again this year."

Ms. Smith continued, "In anticipation of our purchase of the 41 franchised locations, we previously revised our 2015 net earnings growth goal to 13% to account for the incremental expense and transition costs we expected to incur in the third and fourth quarters. Based on our year-to-date results and updated outlook for the fourth quarter, we are now anticipating single-digit net earnings growth for the year."

Ms. Smith concluded, "We remain confident the Buffalo Wild Wings brand is strong and we're continually investing in our Guest Experience to increase sales. We're looking forward to 2016 and plan to open 50 company-owned Buffalo Wild Wings. Buffalo Wild Wings franchisees in the United States anticipate opening 30 restaurants and international franchisees should open approximately 15 locations. R Taco and PizzaRev will continue their growth plans through both company-owned and franchise development next year. As a result of this unit expansion combined with our ongoing sales-driving and operational initiatives, we believe net earnings growth in 2016 should exceed 20%."

Buffalo Wild Wings will be hosting a conference call today, October 28, 2015 at 4:00 p.m. Central Daylight 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 November 4, 2015. To access this replay, please dial 1.858.384.5517 password 391456.

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 1,140 Buffalo Wild Wings locations around the world.

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 fourth quarter sales trends and projected unit and net earnings growth rates for 2015, 2016, 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," "goal," "intends," "may," "plans," "potential," "predicts," "should," "scheduled," 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 and supply chain consistency, 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 28, 2014, 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							Nine months ended
		September 27, 2015				September 28, 2014			September 27, 2015			September 28, 2014
Revenue:
Restaurant sales		$	431,763			350,524			1,248,595			1,038,610
Franchise royalties and fees			23,763			22,934			73,904			68,697
Total revenue			455,526			373,458			1,322,499			1,107,307
Costs and expenses:
Restaurant operating costs:
Cost of sales			126,878			101,886			370,398			296,210
Labor			138,897			111,897			398,585			324,663
Operating			63,343			52,364			178,716			151,419
Occupancy			24,210			19,796			68,554			58,048
Depreciation and amortization			33,610			24,776			90,887			71,354
General and administrative			33,714			27,784			97,937			86,163
Preopening			4,777			3,594			9,251			8,369
Loss on asset disposals and impairment			1,269			1,371			4,180			3,369
Total costs and expenses			426,698			343,468			1,218,508			999,595
Income from operations			28,828			29,990			103,991			107,712
Other expense			(1,400	)		(236	)		(1,434	)		(128	)
Earnings before income taxes			27,428			29,754			102,557			107,584
Income tax expense			8,261			8,001			32,973			33,812
Net earnings including noncontrolling interests			19,167			21,753			69,584			73,772
Net loss attributable to noncontrolling interests			(69	)		—			(214	)		—
Net earnings attributable to Buffalo Wild Wings		$	19,236			21,753			69,798			73,772
Earnings per common share - basic		$	1.01			1.15			3.67			3.90
Earnings per common share - diluted		$	1.00			1.14			3.65			3.89
Weighted average shares outstanding - basic			19,022			18,923			19,006			18,900
Weighted average shares outstanding - diluted			19,167			19,021			19,118			18,985

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						Nine months ended
		September 27, 2015			September 28, 2014			September 27, 2015			September 28, 2014
Revenue:
Restaurant sales		94.8	%		93.9	%		94.4	%		93.8	%
Franchise royalties and fees		5.2			6.1			5.6			6.2
Total revenue		100.0			100.0			100.0			100.0
Costs and expenses:
Restaurant operating costs:
Cost of sales		29.4			29.1			29.7			28.5
Labor		32.2			31.9			31.9			31.3
Operating		14.7			14.9			14.3			14.6
Occupancy		5.6			5.6			5.5			5.6
Depreciation and amortization		7.4			6.6			6.9			6.4
General and administrative		7.4			7.4			7.4			7.8
Preopening		1.0			1.0			0.7			0.8
Loss on asset disposals and impairment		0.3			0.4			0.3			0.3
Total costs and expenses		93.7			92.0			92.1			90.3
Income from operations		6.3			8.0			7.9			9.7
Other expense		(0.3	)		(0.1	)		(0.1	)		(0.0	)
Earnings before income taxes		6.0			8.0			7.8			9.7
Income tax expense		1.8			2.1			2.5			3.1
Net earnings including noncontrolling interests		4.2			5.8			5.3			6.7
Net loss attributable to noncontrolling interests		(0.0	)		—			(0.0	)		—
Net earnings attributable to Buffalo Wild Wings		4.2	%		5.8	%		5.3	%		6.7	%

 

BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands)
(unaudited)
		September 27, 2015				December 28, 2014
Assets
Current assets:
Cash and cash equivalents		$	11,479			93,329
Marketable securities			8,721			19,547
Accounts receivable, net of allowance of $25			35,168			28,322
Inventory			13,378			11,893
Prepaid expenses			8,815			4,215
Refundable income taxes			10,322			9,779
Deferred income taxes			17,419			15,807
Restricted assets			48,400			81,037
Total current assets			153,702			263,929
Property and equipment, net			604,300			494,401
Reacquired franchise rights, net			132,993			37,631
Other assets			28,424			19,399
Goodwill			99,678			38,106
Total assets		$	1,019,097			853,466
Liabilities and Stockholders' Equity
Current liabilities:
Unearned franchise fees		$	2,148			2,099
Accounts payable			55,573			37,241
Accrued compensation and benefits			40,613			59,161
Accrued expenses			19,624			16,573
Current portion of long-term debt			1,927			—
Current portion of deferred lease credits			—			743
Due to related party			31,634			—
System-wide payables			48,778			79,668
Total current liabilities			200,297			195,485
Long-term liabilities:
Other liabilities			17,674			6,388
Deferred income taxes			27,191			39,815
Long-term debt			74,856			—
Deferred lease credits			44,170			37,479
Total liabilities			364,188			279,167
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 19,033,253 and 18,937,131, respectively			160,510			148,114
Retained earnings			497,493			427,695
Accumulated other comprehensive loss			(3,466	)		(2,096	)
Total stockholders' equity			654,537			573,713
Noncontrolling interests			372			586
Total equity			654,909			574,299
Total liabilities and equity		$	1,019,097			853,466

 

BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands)
(unaudited)
		Nine months ended
		September 27, 2015				September 28, 2014
Cash flows from operating activities:
Net earnings including noncontrolling interests		$	69,584			73,772
Adjustments to reconcile net earnings to net cash provided by operations:
Depreciation			86,119			67,932
Amortization			4,768			3,422
Loss on asset disposals and impairment			4,180			3,369
Deferred lease credits			4,260			4,209
Deferred income taxes			(13,561	)		(18,774	)
Stock-based compensation			11,689			10,251
Excess tax benefit from stock issuance			(1,088	)		217
Change in operating assets and liabilities, net of effect of acquisitions:
Trading securities			(173	)		(657	)
Accounts receivable			(4,982	)		(3,323	)
Inventory			(421	)		(400	)
Prepaid expenses			(868	)		(7,245	)
Other assets			74			(160	)
Unearned franchise fees			104			333
Accounts payable			6,901			4,128
Income taxes			545			6,541
Accrued expenses			(248	)		99
Net cash provided by operating activities			166,883			143,714
Cash flows from investing activities:
Acquisition of property and equipment			(124,233	)		(95,347	)
Acquisition of businesses			(209,713	)		(7,307	)
Purchase of marketable securities			(12,301	)		(17,993	)
Proceeds from marketable securities			23,300			—
Net cash used in investing activities			(322,947	)		(120,647	)
Cash flows from financing activities:
Proceeds from line of credit			197,422			—
Repayments of line of credit			(150,467	)		—
Proceeds from related party borrowing			31,634			—
Other financing activities			(580	)		—
Issuance of common stock			2,903			1,829
Excess tax benefit from stock issuance			1,088			(217	)
Tax payments for restricted stock units			(7,847	)		(7,474	)
Net cash provided by (used in) financing activities			74,153			(5,862	)
Effect of exchange rate changes on cash and cash equivalents			61			(612	)
Net increase (decrease) in cash and cash equivalents			(81,850	)		16,593
Cash and cash equivalents at beginning of period			93,329			57,502
Cash and cash equivalents at end of period		$	11,479			74,095

 

BUFFALO WILD WINGS, INC. AND SUBSIDIARIES Supplemental Information
Restaurant Count
Company-owned Restaurants (includes Buffalo Wild Wings, R Taco, and Buffalo Wild Wings-owned PizzaRev locations):
		Q1		Q2		Q3		Q4
2015		501		517		573
2014		443		449		463		491
2013		397		407		415		434
2012		327		330		343		381
2011		263		277		288		319
Franchised Restaurants (includes Buffalo Wild Wings and R Taco locations):
		Q1		Q2		Q3		Q4
2015		593		593		569
2014		569		579		588		591
2013		514		525		534		559
2012		505		505		511		510
2011		488		492		498		498

 

Restaurant Count Rollforward:
		Nine months ended
		September 27, 2015						September 28, 2014
		Corporate		Franchise		Total		Corporate		Franchise		Total
Buffalo Wild Wings
Beginning of period		487		584		1,071		434		559		993
Opened		29		37		66		24		32		56
Acquired		54		(54)		—		3		(3)		—
Closed/Relocated		(2)		(4)		(6)		(2)		(7)		(9)
End of period		568		563		1,131		459		581		1,040
R Taco
Beginning of period		2		7		9		—		—		—
Opened		—		—		—		—		—		—
Acquired		1		(1)		—		2		7		9
Closed/Relocated		—		—		—		—		—		—
End of period		3		6		9		2		7		9
PizzaRev
Beginning of period		2		n/a		2		—		n/a		—
Opened		—		n/a		—		2		n/a		2
Acquired		—		n/a		—		—		n/a		—
Closed/Relocated		—		n/a		—		—		n/a		—
End of period		2		n/a		2		2		n/a		2
Consolidated
End of the period		573		569		1,142		463		588		1,051

 

BUFFALO WILD WINGS, INC. AND SUBSIDIARIES Supplemental Information
Same-Store Sales at Buffalo Wild Wings locations in United States and Canada
Company-owned Restaurants:
			Q1		Q2		Q3		Q4		Year
2015			7.0%		4.2%		3.9%
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%
Franchised Restaurants:
			Q1		Q2		Q3		Q4		Year
2015			6.0%		2.5%		1.2%
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%
Average Weekly Sales Volumes at Buffalo Wild Wings locations in United States and Canada
Company-owned Restaurants:
			Q1		Q2		Q3		Q4		Year
2015		$	64,851		61,960		61,831
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
Franchised Restaurants:
			Q1		Q2		Q3		Q4		Year
2015		$	67,075		63,904		62,819
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

SOURCE Buffalo Wild Wings, Inc.

Contact:

Heather Pribyl
Buffalo Wild Wings, Inc.
Investor Relations
952-253-0731

 

 

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