Buffalo Wild Wings, Inc. Announces Fourth Quarter Earnings Per Share of $0.89 and Annual Net Earnings Growth of Over 13% for 2012

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| Source: Buffalo Wild Wings, Inc.

MINNEAPOLIS, Feb. 12, 2013 (GLOBE NEWSWIRE) -- Buffalo Wild Wings, Inc. (Nasdaq:BWLD), announced today financial results for the fourth quarter ended December 30, 2012. Highlights for the fourth quarter versus the same period a year ago were:

  • Total revenue increased 37.8% to $303.8 million
  • Company-owned restaurant sales grew 39.3% to $282.7 million
  • Same-store sales increased 5.8% at company-owned restaurants and 7.4% at franchised restaurants
  • Net earnings increased 22.3% to $16.7 million from $13.6 million, and earnings per diluted share increased 21.9% to $0.89 from $0.73

As a reminder, Buffalo Wild Wings utilizes a 52- or 53-week fiscal year. The fiscal year ended December 30, 2012 was a 53-week year, with the fourth quarter of 2012 having fourteen weeks, while the fourth quarter of 2011 included thirteen weeks.

Sally Smith, President and Chief Executive Officer, commented, "We achieved a 37.8% increase in revenue for the fourth quarter as a result of strong same-store sales of 5.8% at company-owned restaurants and 7.4% at franchised locations, 62 additional company-owned locations in 2012, and incremental revenue from our fourteenth fiscal week. For the year, our total revenue exceeded $1 billion, a new milestone for Buffalo Wild Wings! High cost of sales continued in the fourth quarter, offsetting some of the bottom-line benefit of the fourteenth week, resulting in net earnings growth of 22.3% for the fourth quarter and 13.6% for the year."

Total revenue increased 37.8% to $303.8 million in the fourth quarter compared to $220.5 million in the fourth quarter of 2011. Company-owned restaurant sales for the quarter increased 39.3% over the same period in 2011, to $282.7 million, driven by a company-owned same-store sales increase of 5.8% and 62 additional company-owned restaurants at the end of fourth quarter 2012 relative to the same period in 2011. Same-store sales for the fourth quarter are calculated on a thirteen-week basis. The fourteenth week in the fourth quarter contributed $22.3 million of restaurant sales. Franchise royalties and fees increased 20.6% to $21.1 million for the quarter versus $17.5 million in the fourth quarter of 2011. This increase is attributed to a franchise same-store sales increase of 7.4%, an additional 12 franchised restaurants at the end of the period versus a year ago, and the incremental $1.5 million of franchise royalties and fees in the fourteenth week.

Average weekly sales for company-owned restaurants were $55,595 for the fourth quarter of 2012 compared to $51,983 for the same quarter last year, a 6.9% increase. Franchised restaurants averaged $58,490 for the period versus $53,385 in the fourth quarter a year ago, a 9.6% increase.

For the fourth quarter, net earnings increased 22.3% to $16.7 million versus $13.6 million in the fourth quarter of 2011. For the year, net earnings increased 13.6% to $57.3 million versus $50.4 million in 2011. Earnings per diluted share were $0.89, as compared to fourth quarter 2011 earnings per diluted share of $0.73. For the year, earnings per diluted share for 2012 were $3.06, a 12.1% increase over earnings per diluted share of $2.73 in 2011. The benefit from the additional week of operations in 2012 is estimated at $0.19 earnings per diluted share.

2013 Outlook

Ms. Smith remarked, "We are energized and determined to achieve net earnings growth of 25% for 2013 when compared on a 52-week basis to last year, which equates to 17% over full-year 2012. We are creating the ultimate sports-viewing experience for our Guests, innovating around our products and technology, and rolling out our new restaurant design. Our recently announced multi-year partnership with the NCAA gives us exclusive marketing and promotional opportunities, and makes Buffalo Wild Wings the 'Official Hangout' of NCAA March Madness®. We'll increase the presence and popularity of the Buffalo Wild Wings brand and look forward to achieving a successful year of unit and net earnings growth."

Ms. Smith continued, "As we begin 2013, our same-store sales are challenging to interpret, as sporting events do not align due to the 53rd week in 2012. Through the first six weeks of the first quarter of 2013, same-store sales are (2.8%) at company-owned restaurants and (1.7%) at franchised locations. However, if we calculate our same-store sales to align the timing of the college and NFL football seasons for both years, we estimate our same-store sales would be 2.6% at our company-owned restaurants and 1.6% at franchised locations. We also note that same-store sales increases in the first six weeks of 2012 were particularly high at 12.9% at company-owned restaurants and 10.8% at franchised locations."

Ms. Smith concluded, "Our development efforts continue to be a key driver of our success and we expect to open 60 company-owned and 45 franchised Buffalo Wild Wings restaurants during the year. We recently put a three-year $100 million unsecured line of credit in place that allows us to remain nimble for future investment in franchised acquisitions and emerging brands as we build the foundation for continued growth of this dynamic company."

Buffalo Wild Wings will be hosting a conference call today, February 12, 2013 at 4:00 p.m. Central Standard 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 February 19, 2013. To access this replay, please dial 1.858.384.5517 password 4589813.

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 nearly 900 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 first 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, 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, 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 25, 2011, 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  Fiscal years ended 
  December 30, December 25, December 30, December 25,
  2012 2011 2012 2011
         
Revenue:         
Restaurant sales  $282,679 202,936 963,963 717,395
Franchise royalties and fees  21,147 17,528 76,567 67,083
Total revenue  303,826 220,464 1,040,530 784,478
         
Costs and expenses:         
Restaurant operating costs:         
Cost of sales  90,440 59,637 303,653 203,291
Labor  85,457 60,679 289,167 215,649
Operating  41,645 31,520 141,417 109,654
Occupancy  14,798 11,924 54,147 44,005
Depreciation and amortization  19,023 14,212 67,462 49,913
General and administrative  21,936 19,295 84,149 72,689
Preopening  5,968 4,197 14,630 14,564
Loss on asset disposals and store closures  1,169 414 3,291 1,929
Total costs and expenses  280,436 201,878 957,916 711,694
Income from operations  23,390 18,586 82,614 72,784
Investment income  41 288 754 118
Earnings before income taxes  23,431 18,874 83,368 72,902
Income tax expense  6,771 5,248 26,093 22,476
Net earnings  $16,660 13,626 57,275 50,426
Earnings per common share – basic  $0.90 0.74 3.08 2.75
Earnings per common share – diluted  0.89 0.73 3.06 2.73
Weighted average shares outstanding – basic  18,608 18,361 18,582 18,337
Weighted average shares outstanding – diluted  18,789 18,633 18,705 18,483
         

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  Fiscal years ended 
  December 30,
2012
December 25,
2011
December 30,
2012
December 25,
2011
         
Revenue:        
Restaurant sales 93.0% 92.0% 92.6% 91.4%
Franchising royalties and fees 7.0 8.0 7.4 8.6
Total revenue 100.0 100.0 100.0 100.0
         
Costs and expenses:        
Restaurant operating costs:        
Cost of sales 32.0 29.4 31.5 28.3
Labor 30.2 29.9 30.0 30.1
Operating 14.7 15.5 14.7 15.3
Occupancy 5.2 5.9 5.6 6.1
Depreciation and amortization 6.3 6.4 6.5 6.4
General and administrative 7.2 8.8 8.1 9.3
Preopening 2.0 1.9 1.4 1.9
Loss on asset disposals and store closures 0.4 0.2 0.3 0.2
Total costs and expenses 92.3 91.6 92.1 90.7
         
Income from operations 7.7 8.4 7.9 9.3
Investment income 0.0 0.1 0.1 — 
Earnings before income taxes 7.7 8.6 8.0 9.3
Income tax expense 2.2 2.4 2.5 2.9
Net earnings 5.5% 6.2% 5.5% 6.4%
 
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands)
(unaudited)
  December 30, December 25,
  2012 2011
     
Assets    
Current assets:    
Cash and cash equivalents $21,340 $20,530
Marketable securities 9,579 39,956
Accounts receivable, net of allowance of $25 20,203 12,165
Inventory 7,820 6,311
Prepaid expenses 3,869 3,707
Refundable income taxes 4,122 7,561
Deferred income taxes 5,774 6,323
Restricted assets 52,829 42,692
Total current assets 125,536 139,245
Property and equipment, net 386,570 310,170
Other assets 46,616 28,174
Goodwill 32,365 17,770
Total assets $591,087 $495,359
Liabilities and Stockholders' Equity    
Current liabilities:    
Unearned franchise fees $1,763 $1,852
Accounts payable 36,418 30,089
Accrued compensation and benefits 39,637 30,499
Accrued expenses 11,461 7,580
System-wide payables 51,564 44,250
Total current liabilities 140,843 114,270
Long-term liabilities:    
Other liabilities 1,752 1,544
Deferred income taxes 37,128 38,512
Deferred lease credits 27,992 23,047
Total liabilities 207,715 177,373
Commitments and contingencies     
Stockholders' equity:    
Undesignated stock, 1,000,000 shares authorized, none issued —   —  
Common stock, no par value. Authorized 44,000,000 shares; issued and outstanding 18,623,370 and 18,377,920, respectively 121,450 113,509
Retained earnings 262,047 204,772
Accumulated other comprehensive loss (125) (295)
Total stockholders' equity 383,372 317,986
Total liabilities and stockholders' equity $591,087 $495,359
 
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands)
(unaudited)
     
  Fiscal years ended
  December 30, December 25,
  2012 2011
     
Cash flows from operating activities:    
Net earnings  $ 57,275  $ 50,426
Adjustments to reconcile net earnings to cash provided by operations:    
Depreciation 64,154 49,003
Amortization 3,308 910
Loss on asset disposals and store closures  2,883 1,680
Deferred lease credits 4,322 3,632
Deferred income taxes (835) 12,816
Stock-based compensation 8,119 11,383
Excess tax benefit from stock issuance (4,151) (4,462)
Change in operating assets and liabilities, net of effect of acquisition:    
Trading securities (992) (317)
Accounts receivable (11,797) (1,222)
Inventory (1,088) (1,840)
Prepaid expenses (46) 20
Other assets (2,071) (2,550)
Unearned franchise fees (89) (257)
Accounts payable 3,172 17,676
Income taxes 7,590 3,267
Accrued expenses 15,434 8,095
Net cash provided by operating activities 145,188 148,260
     
Cash flows from investing activities:    
Acquisition of property and equipment (130,542) (130,127)
Purchase of marketable securities (132,140) (97,148)
Proceeds of marketable securities 163,509 114,337
Acquisition of franchised restaurants (43,580) (33,744)
Net cash used in investing activities (142,753) (146,682)
     
Cash flows from financing activities:    
Issuance of common stock 2,783 1,709
Excess tax benefit from stock issuance 4,151 4,462
Tax payments for restricted stock units (8,522) (2,481)
Net cash provided by (used in) financing activities (1,588) 3,690
Effect of exchange rate changes on cash and cash equivalents (37) (47)
Net increase in cash and cash equivalents 810 5,221
Cash and cash equivalents at beginning of year 20,530 15,309
Cash and cash equivalents at end of year $21,340 20,530
 
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
Supplemental Information
           
    Restaurant Count      
Company-owned Restaurants:  
  Q1 Q2 Q3 Q4  
2012 327 330 343 381  
2011 263 277 288 319  
2010 235 234 244 259  
2009 206 215 220 232  
2008 165 169 187 197  
           
Franchised Restaurants:  
  Q1 Q2 Q3 Q4  
2012 505 505 511 510  
2011 488 492 498 498  
2010 430 447 457 473  
2009 373 383 400 420  
2008 340 346 348 363  
           
    Same-Store Sales      
Company-owned Restaurants:
  Q1 Q2 Q3 Q4 Year
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%
2008 4.1% 8.3% 6.8% 4.5% 5.9%
           
Franchised Restaurants:
  Q1 Q2 Q3 Q4 Year
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%
2008 2.1% 4.5% 2.1% 2.5% 2.8%
 
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
Supplemental Information
           
Average Weekly Sales Volumes
           
Company-owned Restaurants:        
  Q1 Q2 Q3 Q4 Year
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
2008 41,438 40,572 42,400 43,864 42,141
           
Franchised Restaurants:          
  Q1 Q2 Q3 Q4 Year
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
2008 47,812 46,390 46,889 48,424 47,382
Investor Relations Contact:
Mary Twinem
952.253.0731