Buffalo Wild Wings, Inc. Announces First Quarter Earnings Per Share of $1.49

By GlobeNewswire,  April 28, 2014, 04:01:00 PM EDT


Net Earnings Growth Goal for 2014 Increased to 25%

MINNEAPOLIS, April 28, 2014 (GLOBE NEWSWIRE) -- Buffalo Wild Wings, Inc. (Nasdaq:BWLD), announced today financial results for the first quarter ended March 30, 2014. Highlights for the first quarter versus the same period a year ago were:

  • Total revenue increased 20.9% to $367.9 million
  • Company-owned restaurant sales grew 21.3% to $344.9 million
  • Same-store sales increased 6.6% at company-owned restaurants and 5.0% at franchised restaurants
  • Net earnings increased 72.9% to $28.3 million from $16.4 million, and earnings per diluted share increased 71.3% to $1.49 from $0.87

Sally Smith, President and Chief Executive Officer, commented, "Our first quarter was a great start to 2014. We're pleased with our strong revenue growth of 20.9%. For the quarter, same-store sales at company-owned restaurants increased 6.6% and same-store sales at franchised locations increased 5.0%. Sales momentum grew during February and March with the excitement of the Winter Olympics and March Madness bringing guests into our restaurants."

Ms. Smith continued, "Our net earnings increased 72.9%, outpacing the top line growth. Strong net earnings growth is primarily attributable to 46 additional company-owned restaurants compared to the prior year, the strength of same-store sales, and a 440-basis point improvement in cost of sales that was the result of significantly lower traditional chicken wing prices and our July 2013 transition to selling wings by portion."

Total revenue increased 20.9% to $367.9 million in the first quarter, compared to $304.4 million in the first quarter of 2013. Company-owned restaurant sales for the quarter increased 21.3% over the same period in 2013, to $344.9 million, driven by a company-owned same-store sales increase of 6.6% and 46 additional company-owned restaurants at the end of first quarter 2014 relative to the end of the same period in 2013. Franchise royalties and fees increased 14.9% to $22.9 million for the quarter versus $19.9 million in the first quarter of 2013. This increase is attributed to a franchise same-store sales increase of 5.0% and 55 additional franchised restaurants at the end of the period versus a year ago.

Average weekly sales for company-owned restaurants were $60,966 for the first quarter of 2014 compared to $56,953 for the same quarter last year, a 7.0% increase. Franchised restaurants averaged $63,852 for the period versus $60,050 in the first quarter a year ago, a 6.3% increase.

For the first quarter, net earnings increased 72.9% to $28.3 million versus $16.4 million in the first quarter of 2013. Earnings per diluted share were $1.49, as compared to first quarter 2013 earnings per diluted share of $0.87.

2014 Outlook

Ms. Smith remarked, "We're pleased with our strong same-store sales to date in the second quarter of 5.7% at our company-owned restaurants and 4.4% at franchised locations. We estimate that Easter occurring in the first four weeks of the second quarter of 2014 had a negative impact of 90 basis points. During the second quarter, sports fans continue their enthusiasm with the growing excitement around the NBA and NHL playoffs. Later in the quarter, we'll promote Buffalo Wild Wings as the place to watch the 2014 FIFA World Cup™ tournament through increased advertising spend and unique games centered on the World Cup."

Ms. Smith concluded, "Based on our first quarter results, second quarter trends in same-store sales, and anticipated food costs, we believe we will achieve net earnings growth of 25% for 2014, an increase from our previous goal for the year. We are building for long-term earnings growth by investing in Buffalo Wild Wings in the United States and Canada, international franchising, and emerging brands. These investments will allow us to achieve our vision of being a company of 3,000 restaurants worldwide creating the ultimate experience for our guests, and providing sustained growth for our shareholders."

Buffalo Wild Wings will be hosting a conference call today, April 28, 2014 at 4:00 p.m. Central Time to discuss these results. There will be a simultaneous webcast conducted at our investor relations website ir.buffalowildwings.com.

A replay of the call will be available until May 5, 2014. To access this replay, please dial 1.858.384.5517 password 4678926.

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® 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 1,010 Buffalo Wild Wings locations in the United States, Canada, and Mexico.

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 for 2014 and beyond, including but not limited to those relating to our second quarter sales trends and projected unit and net earnings growth rates for 2014 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  
  March 30,

2014
March 31,

2013
Revenue:    
Restaurant sales $ 344,945  284,425
Franchise royalties and fees 22,910  19,939
Total revenue 367,855  304,364
     
Costs and expenses:    
Restaurant operating costs:    
Cost of sales 97,487  93,091
Labor 105,334  85,831
Operating 49,038  41,105
Occupancy 18,969  16,126
Depreciation and amortization 22,832  20,143
General and administrative 28,156  21,297
Preopening 2,578  4,271
Loss on asset disposals and impairment 787  571
Total costs and expenses 325,181  282,435
     
Income from operations 42,674  21,929
Other income (loss) (127)  345
Earnings before income taxes 42,547  22,274
Income tax expense 14,231  5,895
Net earnings $ 28,316  16,379
Earnings per common share - basic  1.50  0.87
Earnings per common share - diluted  1.49  0.87
Weighted average shares outstanding - basic 18,873  18,748
Weighted average shares outstanding - diluted 18,953  18,803

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 30,

2014
March 31,

2013
Revenue:    
Restaurant sales  93.8%  93.4%
Franchising royalties and fees  6.2  6.6 
Total revenue  100.0   100.0 
     
Costs and expenses:    
Restaurant operating costs:    
Cost of sales  28.3  32.7 
Labor  30.5  30.2 
Operating  14.2   14.5 
Occupancy  5.5   5.7 
Depreciation and amortization  6.2   6.6 
General and administrative  7.7   7.0 
Preopening  0.7   1.4 
Loss on asset disposals and impairment  0.2   0.2 
Total costs and expenses  88.4   92.8 
     
Income from operations  11.6   7.2 
Other income (loss) (0.0)  0.1 
Earnings before income taxes  11.6   7.3 
Income tax expense  3.9   1.9 
Net earnings  7.7%  5.4%
 
 
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands)
(unaudited)
 
  March 30,

2014
December 29,

2013
Assets    
Current assets:    
Cash and cash equivalents $ 72,548  57,502
Marketable securities  7,674  7,584
Accounts receivable, net of allowance of $25  26,821  21,845
Inventory  10,339  9,492
Prepaid expenses  6,925  4,509
Refundable income taxes   —  4,329
Deferred income taxes  10,176  9,287
Restricted assets  42,375  68,208
Total current assets  176,858 182,756
     
Property and equipment, net  438,346 440,538
Reacquired franchise rights, net  32,270 33,403
Other assets  16,366 16,498
Goodwill  32,533 32,533
Total assets $ 696,373  705,728
Liabilities and Stockholders' Equity    
Current liabilities:    
Unearned franchise fees $ 1,692  1,818
Accounts payable  22,935  31,806
Accrued compensation and benefits  33,881  52,049
Accrued expenses  12,320  13,784
Income tax payable  15,514  —
Current portion of deferred lease credits  457  —
Line of credit  —  —
System-wide payables  42,208  67,017
Total current liabilities  129,007  166,474
     
Long--term liabilities:    
Other liabilities  3,820  1,913
Deferred income taxes  31,516  37,822
Deferred lease credits, net of current portion  34,786  33,711
Total liabilities  199,129  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 18,896,686 and 18,803,663, respectively  136,817   133,203
Retained earnings  361,917  333,601
Accumulated other comprehensive loss (1,490) (996)
Total stockholders' equity  497,244  465,808
Total liabilities and stockholders' equity $ 696,373  705,728
 
 
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands)
(unaudited)
 
  Three months ended
  March 30,

2014
March 31,

2013
Cash flows from operating activities:    
Net earnings $ 28,316  16,379
Adjustments to reconcile net earnings to net cash provided by operations:    
Depreciation  21,699  18,906
Amortization 1,133 1,237
Loss on asset disposals and impairment  787  556
Deferred lease credits  998  823
Deferred income taxes (6,892) (1,481)
Stock-based compensation  3,615  870
Excess tax benefit from stock issuance (29) (131)
Change in operating assets and liabilities, net of effect of acquisition:    
Trading securities (90) (510)
Accounts receivable (3,403) 1,624
Inventory (859) (795)
Prepaid expenses (2,423)  332
Other assets 121 (418)
Unearned franchise fees (126) 172
Accounts payable (4,211) (4,716)
Income taxes  19,872  6,347
Accrued expenses (10,414) (11,377)
Net cash provided by operating activities  48,094  27,818
Cash flows from investing activities:    
Acquisition of property and equipment (25,732) (34,538)
Acquisition of businesses/investments in affiliates  —  (10,171)
Proceeds from marketable securities  —  3,282
Net cash used in investing activities (25,732) (41,427)
Cash flows from financing activities:    
Proceeds from line of credit  —   5,000
Issuance of common stock  244  174
Excess tax benefit from stock issuance  29  131
Tax payments for restricted stock  (7,474)  (4,813)
Net cash provided by (used in) financing activities (7,201) 492
Effect of exchange rate changes on cash and cash equivalents  (115)  (188)
Net increase (decrease) in cash and cash equivalents 15,046 (13,305)
Cash and cash equivalents at beginning of period  57,502  21,340
Cash and cash equivalents at end of period $ 72,548  8,035
 
 
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
Supplemental Information
 
Restaurant Count
 
Company-owned Restaurants:
 
  Q1 Q2 Q3 Q4
2014 443      
2013 397 407 415 434
2012 327 330 343 381
2011 263 277 288 319
2010 235 234 244 259
 
Franchised Restaurants:
 
  Q1 Q2 Q3 Q4
2014 569      
2013 514 525 534 559
2012 505 505 511 510
2011 488 492 498 498
2010 430 447 457 473
 
Same-Store Sales
 
Company-owned Restaurants:
 
  Q1 Q2 Q3 Q4 Year
2014 6.6%        
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%        
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
 
Company-owned Restaurants:
 
  Q1 Q2 Q3 Q4 Year
2014 60,966        
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        
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
CONTACT: Investor Relations Contact:
         Heather Pribyl
         952.253.0731
Source: Buffalo Wild Wings, Inc.

This article appears in: News Headlines

Referenced Stocks: BWLD


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