BUFFALO WILD WINGS : Buffalo Wild Wings, Inc. Announces Second Quarter Earnings per Share of $0.58 and Quarterly Net Earnings Growth of 16.4%
07/26/2011| 04:05pm US/Eastern
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Buffalo
Wild Wings, Inc. (NASDAQ: BWLD),
announced today financial results for the second quarter ended June 26,
2011. Highlights for the second quarter versus the same period a year
ago were:
Total revenue increased 26.4% to $184.1 million
Company-owned restaurant sales grew 27.6% to $167.9 million
Same-store sales increased 5.9% at company-owned restaurants and 2.7%
at franchised restaurants
Net earnings increased 16.4% to $10.7 million from $9.2 million, and
earnings per diluted share increased 16.0% to $0.58 from $0.50
Sally
Smith, President and Chief Executive Officer, commented, "The appeal
of our brand is evident in the strong same-store sales we saw in the
second quarter, with an increase of 5.9% at company-owned locations and
2.7% at franchised locations. Our same-store sales, combined with our
unit growth, fueled the substantial increase in revenue of 26.4%. In
May, we celebrated the opening of our first international location near
Toronto. We're entering numerous major markets this year, and we
increased our presence across the United States with 18 additional
locations in the second quarter. To ensure that we successfully launch
our brand in these new markets we incurred year-over-year increases in
preopening costs and general and administrative expenses. Net earnings
grew by over 16% in the second quarter, providing value to our
shareholders with earnings per diluted share of $0.58, even with these
investments in our future."
Total revenue increased 26.4% to $184.1 million in the second quarter
compared to $145.7 million in the second quarter of 2010. Company-owned
restaurant sales for the quarter increased 27.6% over the same period in
2010, to $167.9 million, driven by a company-owned same-store sales
increase of 5.9% and 43 additional company-owned restaurants at the end
of second quarter 2011 relative to the same period in 2010. Franchise
royalties and fees increased 14.4% to $16.2 million versus $14.2 million
in the second quarter of 2010. This increase is attributed to a
franchise same-store sales increase of 2.7% and 45 additional franchised
restaurants at the end of the period versus a year ago.
Average weekly sales for company-owned restaurants were $47,970 for the
second quarter of 2011 compared to $43,021 for the same quarter last
year, an 11.5% increase. Franchised restaurants averaged $50,995 for the
period versus $49,051 in the second quarter a year ago, a 4.0% increase.
For the second quarter, net earnings increased 16.4% to $10.7 million
versus $9.2 million in the second quarter of 2010. Earnings per diluted
share were $0.58, as compared to second quarter 2010 earnings per
diluted share of $0.50.
2011 Outlook
Ms. Smith remarked, "Same-store sales remain impressive with an increase
of 4.9% at company-owned and 3.0% at franchised locations to date in the
third quarter. We join with our Guests in anticipation of the upcoming
football season and Tablegating? at Buffalo Wild Wings. Our restaurant
teams are gearing up to deliver the great game day experience we're
known for. We'll have an increased media presence throughout the third
and fourth quarters and we have marketing and operations plans in place
to engage our passionate Buffalo Wild Wings fans."
Ms. Smith concluded, "We're investing in our unit growth, particularly
as we enter new markets. In the second half of 2011, we expect to open
29 company-owned restaurants in the United States and three in Canada
and our franchisees should open about 37 locations, attaining our 13%
unit growth goal for the year. Our net earnings growth for the first
half of 2011 is over 29%, exceeding our stated annual goal of over 18%
growth. With the strength of our bottom-line performance to date, the
NFL season intact, and continuing same-store sales momentum, we should
achieve net earnings growth of more than 20% for the year."
Buffalo
Wild Wings will be hosting a conference call today, July 26, 2011 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 August 2, 2011. To access
this replay, please dial 1.858.384.5517 password 4454245.
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 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 18 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 773 Buffalo
Wild Wings locations across 45 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 2011 and beyond,
including but not limited to those relating to our second quarter sales
trends and projected unit, revenue and net earnings growth rates for
2011 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), 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 practices, policies and
procedures, 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, disruption to sports seasons, 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 26, 2010, 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
Six months ended
June 26,
June 27,
June 26,
June 27,
2011
2010
2011
2010
Revenue:
Restaurant sales
$
167,896
131,531
333,423
269,493
Franchise royalties and fees
16,205
14,170
32,828
28,479
Total revenue
184,101
145,701
366,251
297,972
Costs and expenses:
Restaurant operating costs:
Cost of sales
45,735
37,601
91,999
79,825
Labor
51,309
40,089
100,187
80,774
Operating
25,048
21,173
49,597
42,628
Occupancy
10,659
8,807
20,886
17,717
Depreciation and amortization
11,931
9,456
22,953
19,006
General and administrative (1)
18,766
12,929
35,058
24,955
Preopening
4,116
1,197
6,503
2,312
Loss on asset disposals and store closures
492
526
903
937
Total costs and expenses
168,056
131,778
328,086
268,154
Income from operations
16,045
13,923
38,165
29,818
Investment income (loss)
(152
)
(156
)
204
29
Earnings before income taxes
15,893
13,767
38,369
29,847
Income tax expense
5,220
4,601
12,835
10,120
Net earnings
$
10,673
9,166
25,534
19,727
Earnings per common share - basic
$
0.58
0.50
1.39
1.09
Earnings per common share - diluted
0.58
0.50
1.39
1.08
Weighted average shares outstanding - basic
18,330
18,167
18,318
18,157
Weighted average shares outstanding - diluted
18,401
18,234
18,389
18,230
(1) Includes stock-based compensation of $3,399, $1,313,
$5,952, and $2,538, 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
Six months ended
June 26,
June 27,
June 26,
June 27,
2011
2010
2011
2010
Revenue:
Restaurant sales
91.2
%
90.3
%
91.0
%
90.4
%
Franchising royalties and fees
8.8
9.7
9.0
9.6
Total revenue
100.0
100.0
100.0
100.0
Costs and expenses:
Restaurant operating costs:
Cost of sales
27.2
28.6
27.6
29.6
Labor
30.6
30.5
30.0
30.0
Operating
14.9
16.1
14.9
15.8
Occupancy
6.3
6.7
6.3
6.6
Depreciation and amortization
6.5
6.5
6.3
6.4
General and administrative
10.2
8.9
9.6
8.4
Preopening
2.2
0.8
1.8
0.8
Loss on asset disposals and store closures
0.3
0.4
0.2
0.3
Total costs and expenses
91.3
90.4
89.6
90.0
Income from operations
8.7
9.6
10.4
10.0
Investment income (loss)
(0.1
)
(0.1
)
0.1
0.0
Earnings before income taxes
8.6
9.4
10.5
10.0
Income tax expense
2.8
3.2
3.5
3.4
Net earnings
5.8
6.3
7.0
6.6
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands)
(unaudited)
June 26,
December 26,
2011
2010
Assets
Current assets:
Cash and cash equivalents
$
37,836
15,309
Marketable securities
48,267
56,827
Accounts receivable - franchisees, net of allowance of $88 and $25
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