News Column

Buffalo Wild Wings, Inc. Announces Fourth Quarter Earnings per Share of $1.10

February 4, 2014

MINNEAPOLIS , Feb. 4, 2014 (GLOBE NEWSWIRE) -- Buffalo Wild Wings, Inc. (Nasdaq:BWLD) announced today financial results for the fourth quarter and fiscal year ended December 29, 2013 . Highlights for the fourth quarter versus the same period a year ago were: Total revenue increased 12.4% to $341.5 million Company - owned restaurant sales grew 13.1% to $319.8 million Same - store sales increased 5.2% at company - owned restaurants and 3.1% at franchised locations Net earnings increased 24.9% to $20.8 million from $16.7 million , and earnings per diluted share increased 23.6% to $1.10 from $0.89 As a reminder, Buffalo Wild Wings utilizes a 52- or 53-week fiscal year. The fiscal year ended December 29, 2013 was a 52-week year, with the fourth quarter of 2013 having thirteen weeks. The fiscal year ended December 30, 2012 was a 53-week year, with the fourth quarter of 2012 including fourteen weeks. Sally Smith , President and Chief Executive Officer, commented, "The fourth quarter completed a great year for Buffalo Wild Wings . In 2013 we continued to build the brand for future success by focusing on several key initiatives, including selling chicken wings by portion, our new Stadia restaurant design, continued rollout of our guest experience model, launch of Game Changer beer brewed by Redhook, continued international expansion, and a minority investment in PizzaRev." Ms. Smith continued, "Same-store sales growth, along with 53 additional company-owned and 49 franchised restaurants, helped drive the total revenue increase of 12.4% in the fourth quarter. Excluding the fourteenth week of the fourth quarter of 2012, total revenue increased 22.0%. Cost of sales and labor improved as a percentage of company-owned restaurant sales in the fourth quarter compared to last year. As a result, our net earnings grew 24.9% and earnings per diluted share increased 23.6% for the quarter when compared to the fourth quarter of 2012. Excluding the fourteenth week in fourth quarter last year, our 2013 fourth quarter net earnings grew 59.6% and earnings per diluted share increased 57.1%." Total revenue increased 12.4% to $341.5 million in the fourth quarter compared to $303.8 million in the fourth quarter of 2012. Company - owned restaurant sales for the quarter increased 13.1% over the same period in 2012, to $319.8 million , driven by a company - owned same - store sales increase of 5.2% and 53 additional company - owned restaurants at the end of fourth quarter 2013 relative to the same period in 2012. Franchise royalties and fees increased 2.7% to $21.7 million for the quarter versus $21.1 million in the fourth quarter of 2012. This increase is attributed to a franchised same - store sales increase of 3.1% and 49 additional franchised restaurants at the end of the period versus a year ago. The revenue increases were calculated using the thirteen weeks of operation in the fourth quarter of 2013 compared to the fourteen weeks of operation in the fourth quarter of 2012. Average weekly sales for company-owned restaurants were $58,204 for the fourth quarter of 2013 compared to $55,595 for the same quarter last year, a 4.7% increase. Franchised restaurants averaged $61,167 for the period versus $58,490 in the fourth quarter a year ago, a 4.6% increase. For the fourth quarter, net earnings increased 24.9% to $20.8 million versus $16.7 million in the fourth quarter of 2012. Earnings per diluted share were $1.10 as compared to fourth quarter 2012 earnings per diluted share of $0.89 . 2014 Outlook Ms. Smith remarked, "With our wall-to-wall televisions and big screens, Buffalo Wild Wings was the place for our guests to Tablegate™ and watch football - from NCAA bowl games to the NFL playoffs culminating with the Super Bowl. Same-store sales for the first five weeks of 2014 were 4.8% at company-owned restaurants and 2.1% at franchised locations compared to (0.2%) and 1.0%, respectively, for the same period last year. The excitement of March Madness is just around the corner and we'll launch our Blazin' Bracket Challenge to engage guests online and in restaurant. In the first quarter we expect to open nine company-owned restaurants, we anticipate our franchise partners in the United States will open 13 locations, and our international franchisees in Mexico have already opened two restaurants." Ms. Smith concluded, "We continue to evolve Buffalo Wild Wings as a vibrant and strong brand. We recently achieved a significant milestone with the opening of our 1,000 th location. We are rolling out new guest-facing technologies, including tabletop tablets and proprietary TV content, to further enhance guest engagement. In addition to continued unit growth, net earnings will be driven by same-store sales momentum and continued operational diligence. We reaffirm our 20% net earnings growth goal for 2014." Buffalo Wild Wings will be hosting a conference call today, February 4, 2014 at 4:00 p.m. Central Standard Time to discuss these results. There will be a simultaneous webcast conducted at our investor website ir.buffalowildwings.com . A replay of the call will be available until February 11, 2014 . To access this replay, please dial 1-858-384-5517 password 4659693. 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 ฎ 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' ฎ . 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 1,000 Buffalo Wild Wings locations across 49 states 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 store performance measures and growth goals for 2014 and beyond, including but not limited to those relating to our first 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 and 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. BUFFALO WILD WINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Dollar and share amounts in thousands except per share data) (unaudited) Three months ended Twelve months ended December 29 , 2013 December 30 , 2012 December 29 , 2013 December 30 , 2012 Revenue: Restaurant sales $ 319,830 282,679 1,185,351 963,963 Franchise royalties and fees 21,717 21,147 81,368 76,567 Total revenue 341,547 303,826 1,266,719 1,040,530 Costs and expenses: Restaurant operating costs: Cost of sales 95,345 90,440 363,755 303,653 Labor 95,802 85,457 360,302 289,167 Operating 47,353 41,645 174,338 141,417 Occupancy 18,127 14,798 68,394 54,147 Depreciation and amortization 22,164 19,023 84,978 67,462 General and administrative 26,620 21,936 96,182 84,149 Preopening 4,965 5,968 14,647 14,630 Loss on asset disposals and impairment 1,560 1,169 3,262 3,291 Total costs and expenses 311,936 280,436 1,165,858 957,916 Income from operations 29,611 23,390 100,861 82,614 Investment income 30 41 674 754 Earnings before income taxes 29,641 23,431 101,535 83,368 Income tax expense 8,826 6,771 29,981 26,093 Net earnings $ 20,815 16,660 71,554 57,275 Earnings per common share – basic $ 1.11 0.90 3.81 3.08 Earnings per common share – diluted 1.10 0.89 3.79 3.06 Weighted average shares outstanding – basic 18,787 18,608 18,770 18,582 Weighted average shares outstanding – diluted 18,965 18,789 18,872 18,705 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 Twelve months ended December 29 , 2013 December 30 , 2012 December 29 , 2013 December 30 , 2012 Revenue: Restaurant sales 93.6% 93.0% 93.6% 92.6% Franchising royalties and fees 6.4 7.0 6.4 7.4 Total revenue 100.0 100.0 100.0 100.0 Costs and expenses: Restaurant operating costs: Cost of sales 29.8 32.0 30.7 31.5 Labor 30.0 30.2 30.4 30.0 Operating 14.8 14.7 14.7 14.7 Occupancy 5.7 5.2 5.8 5.6 Depreciation and amortization 6.5 6.3 6.7 6.5 General and administrative 7.8 7.2 7.6 8.1 Preopening 1.5 2.0 1.2 1.4 Loss on asset disposals and impairment 0.5 0.4 0.3 0.3 Total costs and expenses 91.3 92.3 92.0 92.1 Income from operations 8.7 7.7 8.0 7.9 Investment income 0.0 0.0 0.1 0.1 Earnings before income taxes 8.7 7.7 8.0 8.0 Income tax expense 2.6 2.2 2.4 2.5 Net earnings 6.1 5.5 5.6 5.5 BUFFALO WILD WINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollar amounts in thousands) (unaudited) December 29 , 2013 December 30 , 2012 Assets Current assets: Cash and cash equivalents $ 57,502 21,340 Marketable securities 7,584 9,579 Accounts receivable – net of allowance of $25 21,845 20,203 Inventory 9,492 7,820 Prepaid expenses 4,509 3,869 Refundable income taxes 4,329 4,122 Deferred income taxes 9,287 5,774 Restricted assets 68,208 52,829 Total current assets 182,756 125,536 Property and equipment, net 440,538 386,570 Reacquired franchise rights, net 33,403 37,370 Goodwill 32,533 32,365 Other assets 16,498 9,246 Total assets $ 705,728 591,087 Liabilities and Stockholders' Equity Current liabilities: Unearned franchise fees $ 1,818 1,763 Accounts payable 31,806 36,418 Accrued compensation and benefits 52,049 39,637 Accrued expenses 13,784 11,461 System-wide payables 67,017 51,564 Total current liabilities 166,474 140,843 Long-term liabilities: Other liabilities 1,913 1,752 Deferred income taxes 37,822 37,128 Deferred lease credits 33,711 27,992 Total liabilities 239,920 207,715 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 18,803,663 and 18,623,370, respectively 133,203 121,450 Retained earnings 333,601 262,047 Accumulated other comprehensive loss (996) (125) Total stockholders' equity 465,808 383,372 Total liabilities and stockholders' equity $ 705,728 591,087 BUFFALO WILD WINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollar amounts in thousands) (unaudited) Twelve months ended December 29 , 2013 December 30 , 2012 Cash flows from operating activities: Net earnings $ 71,554 57,275 Adjustments to reconcile net earnings to cash provided by operations: Depreciation 79,881 64,154 Amortization 5,097 3,308 Loss on asset disposals and impairment 3,253 2,883 Deferred lease credits 5,247 4,322 Deferred income taxes (2,209) (835) Stock-based compensation 11,496 8,119 Excess tax benefit from stock issuance (5,471) (4,151) Change in operating assets and liabilities: Trading securities (1,287) (992) Accounts receivable (2,012) (11,797) Inventory (1,581) (1,088) Prepaid expenses (647) (46) Other assets (1,218) (2,071) Unearned franchise fees 55 (89) Accounts payable (1,467) 3,172 Income taxes 5,264 7,590 Accrued expenses 13,405 15,434 Net cash provided by operating activities 179,360 145,188 Cash flows for investing activities: Acquisition of property and equipment (138,735) (130,542) Acquisition of businesses/investments in affiliates (10,288) (43,580) Purchase of marketable securities — (132,140) Proceeds from marketable securities 3,282 163,509 Net cash used in investing activities (145,741) (142,753) Cash flows for financing activities: Proceeds from line of credit 5,000 — Repayments of line of credit (5,000) — Issuance of common stock 2,514 2,783 Excess tax benefit from stock issuance 5,471 4,151 Tax payments for restricted stock units (4,946) (8,522) Net cash provided by (used in) financing activities 3,039 (1,588) Effect of exchange rate changes on cash and cash equivalents (496) (37) Net increase in cash and cash equivalents 36,162 810 Cash and cash equivalents at beginning of year 21,340 20,530 Cash and cash equivalents at end of year $ 57,502 21,340 BUFFALO WILD WINGS, INC. AND SUBSIDIARIES Supplemental Information Restaurant Count Company-owned Restaurants : Q1 Q2 Q3 Q4 2013 397 407 415 434 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 514 525 534 559 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% 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% 2009 6.4% 2.8% 0.8% 2.6% 3.1% Franchised Restaurants : Q1 Q2 Q3 Q4 Year 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%) 2009 6.0% 3.7% 1.9% 2.0% 3.4% BUFFALO WILD WINGS, INC. AND SUBSIDIARIES Supplemental Information Average Weekly Sales Volumes Company-owned Restaurants: Q1 Q2 Q3 Q4 Year 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 2009 45,593 42,938 42,602 44,583 43,912 Franchised Restaurants : Q1 Q2 Q3 Q4 Year 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 2009 50,729 48,619 48,458 50,115 49,479 CONTACT: Investor Relations Contact: Heather Pribyl 952.253.0731 Source: Buffalo Wild Wings, Inc.


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