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:
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Total revenue increased 21.2% to $304.4 million
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Company-owned restaurant sales grew 22.4% to $284.4 million
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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 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 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.
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BUFFALO WILD WINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Dollar and share amounts in thousands except per share data) (unaudited) |
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| Three months ended | ||
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March 31, 2013 |
March 25, 2012 |
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| 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 | ||
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March 31, 2013 |
March 25, 2012 |
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| 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 % |
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BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Dollar amounts in thousands) (unaudited) |
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March 31, 2013 |
December 30, 2012 |
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| 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 |
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BUFFALO WILD WINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollar amounts in thousands) (unaudited) |
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| Three months ended | ||
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March 31, 2013 |
March 25, 2012 |
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| 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 |
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BUFFALO WILD WINGS, INC. AND SUBSIDIARIES Supplemental Information |
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| 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% |
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BUFFALO WILD WINGS, INC. AND SUBSIDIARIES Supplemental Information |
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| 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 |