<< Previous :: Next >> By Date :: Top Recent :: Top 30 days :: Top 365 days :: Back

Buffalo Wild Wings Q2 Total Revenue Increased 26.4%

2011-07-27

Send

PDF

Bookmark

Text Size:

Buffalo Wild Wings Same-store sales increased 5.9% at company-owned restaurants and 2.7% at franchised restaurants

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.

Advertisement

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, 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.



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		1,209		1,086
Accounts receivable – other		10,250		7,947
Inventory		4,344		4,158
Prepaid expenses		2,428		3,505
Refundable income taxes		834		6,366
Deferred income taxes		7,470		6,069
Restricted assets		32,731		32,937
Total current assets		145,369		134,204

Property and equipment, net		257,434		224,970
Other assets		13,286		9,937
Goodwill		12,192		11,246
Total assets	$	428,281		380,357

Liabilities and Stockholders’ Equity
Current liabilities:
Unearned franchise fees	$	2,049		2,109
Accounts payable		24,681		17,632
Accrued compensation and benefits		20,261		19,324
Accrued expenses		6,449		5,696
Current portion of deferred lease credits		—		293
System-wide payables		32,943		34,062
Total current liabilities		86,383		79,116

Long-term liabilities:
Other liabilities		1,674		1,574
Deferred income taxes		31,638		24,557
Deferred lease credits, net of current portion		19,901		18,289
Total liabilities		139,596		123,536

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 18,343,604 and 18,214,065 respectively		108,813		102,484
Retained earnings		179,881		154,346
Accumulated other comprehensive loss		(9	)	(9	)
Total stockholders’ equity		288,685		256,821
Total liabilities and stockholders’ equity	$	428,281		380,357


BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands)
(unaudited)

	Six months ended
	June 26,			June 27,
	2011			2010
Cash flows from operating activities:
Net earnings	$	25,534		19,727
Adjustments to reconcile net earnings to cash provided by operations:
Depreciation		22,574		18,699
Amortization		379		307
Loss on asset disposals and store closures		904		847
Deferred lease credits		1,568		929
Deferred income taxes		4,795		(2,123	)
Stock-based compensation		5,952		2,538
Excess tax benefit from stock issuance		(211	)	(116	)
Change in operating assets and liabilities:
Trading securities		(246	)	(748	)
Accounts receivable		(2,643	)	124
Inventory		(186	)	244
Prepaid expenses		1,077		967
Other assets		(1,534	)	(312	)
Unearned franchise fees		(60	)	(347	)
Accounts payable		4,072		2,472
Income taxes		5,743		1,014
Accrued expenses		2,525		(2,749	)
Net cash provided by operating activities		70,243		41,473

Cash flows for investing activities:
Acquisition of property and equipment		(55,159	)	(25,506	)
Purchase of marketable securities		(54,790	)	(61,114	)
Proceeds of marketable securities		63,597		46,005
Net cash used in investing activities		(46,352	)	(40,615	)

Cash flows for financing activities:
Issuance of common stock		867		782
Tax payments for restricted stock units		(2,481	)	(1,625	)
Excess tax benefit from stock issuance		211		116
Net cash used in financing activities		(1,403	)	(727	)
Effect of exchange rate changes on cash and cash equivalents		39		—
Net increase in cash and cash equivalents		22,527		131
Cash and cash equivalents at beginning of period		15,309		9,580
Cash and cash equivalents at end of period	$	37,836		9,711

Restaurant Count

Company-owned Restaurants:
	Q1	Q2	Q3	Q4
2011	263	277
2010	235	234	244	259
2009	206	215	220	232
2008	165	169	187	197
2007	140	145	148	161


Franchised Restaurants:
	Q1	Q2	Q3	Q4
2011	488	492
2010	430	447	457	473
2009	373	383	400	420
2008	340	346	348	363
2007	299	301	313	332


Same-Store Sales

Company-owned Restaurants:

	Q1		Q2		Q3		Q4		Year
2011	3.9	%	5.9	%
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	%
2007	8.7	%	8.1	%	8.3	%	3.4	%	6.9	%

Franchised Restaurants:

	Q1		Q2		Q3		Q4		Year
2011	1.6	%	2.7	%
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	%
2007	3.3	%	4.0	%	5.9	%	2.3	%	3.9	%

Average Weekly Sales Volumes

Company-owned Restaurants:

	Q1		Q2	Q3	Q4	Year
2011	$	48,845	47,970
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
2007		39,254	36,655	38,498	40,485	38,757

Franchised Restaurants:

	Q1		Q2	Q3	Q4	Year
2011	$	52,744	50,995
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
2007		46,439	43,998	45,879	47,293	45,901