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Buffalo Wild Wings, Inc. Announces First Quarter Earnings Per Share of $1.49

(April 28, 2014)

MINNEAPOLIS, April 28, 2014 (GLOBE NEWSWIRE) -- Buffalo Wild Wings, Inc. (Nasdaq:BWLD), announced today financial results for the first quarter ended March 30, 2014. Highlights for the first quarter versus the same period a year ago were:




  • Total revenue increased 20.9% to $367.9 million


  • Company-owned restaurant sales grew 21.3% to $344.9 million


  • Same-store sales increased 6.6% at company-owned restaurants and 5.0% at franchised restaurants


  • Net earnings increased 72.9% to $28.3 million from $16.4 million, and earnings per diluted share increased 71.3% to $1.49 from $0.87



Sally Smith, President and Chief Executive Officer, commented, "Our first quarter was a great start to 2014. We're pleased with our strong revenue growth of 20.9%. For the quarter, same-store sales at company-owned restaurants increased 6.6% and same-store sales at franchised locations increased 5.0%. Sales momentum grew during February and March with the excitement of the Winter Olympics and March Madness bringing guests into our restaurants."



Ms. Smith continued, "Our net earnings increased 72.9%, outpacing the top line growth. Strong net earnings growth is primarily attributable to 46 additional company-owned restaurants compared to the prior year, the strength of same-store sales, and a 440-basis point improvement in cost of sales that was the result of significantly lower traditional chicken wing prices and our July 2013 transition to selling wings by portion."


Total revenue increased 20.9% to $367.9 million in the first quarter, compared to $304.4 million in the first quarter of 2013. Company-owned restaurant sales for the quarter increased 21.3% over the same period in 2013, to $344.9 million, driven by a company-owned same-store sales increase of 6.6% and 46 additional company-owned restaurants at the end of first quarter 2014 relative to the end of the same period in 2013. Franchise royalties and fees increased 14.9% to $22.9 million for the quarter versus $19.9 million in the first quarter of 2013. This increase is attributed to a franchise same-store sales increase of 5.0% and 55 additional franchised restaurants at the end of the period versus a year ago.




Average weekly sales for company-owned restaurants were $60,966 for the first quarter of 2014 compared to $56,953 for the same quarter last year, a 7.0% increase. Franchised restaurants averaged $63,852 for the period versus $60,050 in the first quarter a year ago, a 6.3% increase.



For the first quarter, net earnings increased 72.9% to $28.3 million versus $16.4 million in the first quarter of 2013. Earnings per diluted share were $1.49, as compared to first quarter 2013 earnings per diluted share of $0.87.



2014 Outlook



Ms. Smith remarked, "We're pleased with our strong same-store sales to date in the second quarter of 5.7% at our company-owned restaurants and 4.4% at franchised locations. We estimate that Easter occurring in the first four weeks of the second quarter of 2014 had a negative impact of 90 basis points. During the second quarter, sports fans continue their enthusiasm with the growing excitement around the NBA and NHL playoffs. Later in the quarter, we'll promote Buffalo Wild Wings as the place to watch the 2014 FIFA World Cup™ tournament through increased advertising spend and unique games centered on the World Cup."



Ms. Smith concluded, "Based on our first quarter results, second quarter trends in same-store sales, and anticipated food costs, we believe we will achieve net earnings growth of 25% for 2014, an increase from our previous goal for the year. We are building for long-term earnings growth by investing in Buffalo Wild Wings in the United States and Canada, international franchising, and emerging brands. These investments will allow us to achieve our vision of being a company of 3,000 restaurants worldwide creating the ultimate experience for our guests, and providing sustained growth for our shareholders."



Buffalo Wild Wings will be hosting a conference call today, April 28, 2014 at 4:00 p.m. Central Time to discuss these results. There will be a simultaneous webcast conducted at our investor relations website ir.buffalowildwings.com.



A replay of the call will be available until May 5, 2014. To access this replay, please dial 1.858.384.5517 password 4678926.



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® 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'®. 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 1,010 Buffalo Wild Wings locations 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 restaurant performance measures and growth goals for 2014 and beyond, including but not limited to those relating to our second 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, 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 29, 2013, 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  

 

March 30,

2014

March 31,

2013

Revenue:

 

 

Restaurant sales

$ 344,945

 284,425

Franchise royalties and fees

22,910

 19,939

Total revenue

367,855

 304,364

 

 

 

Costs and expenses:

 

 

Restaurant operating costs:

 

 

Cost of sales

97,487

 93,091

Labor

105,334

 85,831

Operating

49,038

 41,105

Occupancy

18,969

 16,126

Depreciation and amortization

22,832

 20,143

General and administrative

28,156

 21,297

Preopening

2,578

 4,271

Loss on asset disposals and impairment

787

 571

Total costs and expenses

325,181

 282,435

 

 

 

Income from operations

42,674

 21,929

Other income (loss)

(127)

 345

Earnings before income taxes

42,547

 22,274

Income tax expense

14,231

 5,895

Net earnings

$ 28,316

 16,379

Earnings per common share – basic

 1.50

 0.87

Earnings per common share – diluted

 1.49

 0.87

Weighted average shares outstanding – basic

18,873

 18,748

Weighted average shares outstanding – diluted

18,953

 18,803


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

 

March 30,

2014

March 31,

2013

Revenue:

 

 

Restaurant sales

 93.8%

 93.4%

Franchising royalties and fees

 6.2

 6.6 

Total revenue

 100.0 

 100.0 

 

 

 

Costs and expenses:

 

 

Restaurant operating costs:

 

 

Cost of sales

 28.3

 32.7 

Labor

 30.5

 30.2 

Operating

 14.2 

 14.5 

Occupancy

 5.5 

 5.7 

Depreciation and amortization

 6.2 

 6.6 

General and administrative

 7.7 

 7.0 

Preopening

 0.7 

 1.4 

Loss on asset disposals and impairment

 0.2 

 0.2 

Total costs and expenses

 88.4 

 92.8 

 

 

 

Income from operations

 11.6 

 7.2 

Other income (loss)

(0.0)

 0.1 

Earnings before income taxes

 11.6 

 7.3 

Income tax expense

 3.9 

 1.9 

Net earnings

 7.7%

 5.4%






















































































































































































































































 

 

BUFFALO WILD WINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollar amounts in thousands)

(unaudited)

 

 

March 30,

2014

December 29,

2013

Assets

 

 

Current assets:

 

 

Cash and cash equivalents

$ 72,548

 57,502

Marketable securities

 7,674

 7,584

Accounts receivable, net of allowance of $25

 26,821

 21,845

Inventory

 10,339

 9,492

Prepaid expenses

 6,925

 4,509

Refundable income taxes

  —

 4,329

Deferred income taxes

 10,176

 9,287

Restricted assets

 42,375

 68,208

Total current assets

 176,858

182,756

 

 

 

Property and equipment, net

 438,346

440,538

Reacquired franchise rights, net

 32,270

33,403

Other assets

 16,366

16,498

Goodwill

 32,533

32,533

Total assets

$ 696,373

 705,728

Liabilities and Stockholders' Equity

 

 

Current liabilities:

 

 

Unearned franchise fees

$ 1,692

 1,818

Accounts payable

 22,935

 31,806

Accrued compensation and benefits

 33,881

 52,049

Accrued expenses

 12,320

 13,784

Income tax payable

 15,514

 —

Current portion of deferred lease credits

 457

 —

Line of credit

 —

 —

System-wide payables

 42,208

 67,017

Total current liabilities

 129,007

 166,474

 

 

 

Long--term liabilities:

 

 

Other liabilities

 3,820

 1,913

Deferred income taxes

 31,516

 37,822

Deferred lease credits, net of current portion

 34,786

 33,711

Total liabilities

 199,129

 239,920

 

 

 

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 18,896,686 and 18,803,663, respectively

 136,817

  133,203

Retained earnings

 361,917

 333,601

Accumulated other comprehensive loss

(1,490)

(996)

Total stockholders' equity

 497,244

 465,808

Total liabilities and stockholders' equity

$ 696,373

 705,728























































































































































































































 

 

BUFFALO WILD WINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollar amounts in thousands)

(unaudited)

 

 

Three months ended

 

March 30,

2014

March 31,

2013

Cash flows from operating activities:

 

 

Net earnings

$ 28,316

 16,379

Adjustments to reconcile net earnings to net cash provided by operations:

 

 

Depreciation

 21,699

 18,906

Amortization

1,133

1,237

Loss on asset disposals and impairment

 787

 556

Deferred lease credits

 998

 823

Deferred income taxes

(6,892)

(1,481)

Stock-based compensation

 3,615

 870

Excess tax benefit from stock issuance

(29)

(131)

Change in operating assets and liabilities, net of effect of acquisition:

 

 

Trading securities

(90)

(510)

Accounts receivable

(3,403)

1,624

Inventory

(859)

(795)

Prepaid expenses

(2,423)

 332

Other assets

121

(418)

Unearned franchise fees

(126)

172

Accounts payable

(4,211)

(4,716)

Income taxes

 19,872

 6,347

Accrued expenses

(10,414)

(11,377)

Net cash provided by operating activities

 48,094

 27,818

Cash flows from investing activities:

 

 

Acquisition of property and equipment

(25,732)

(34,538)

Acquisition of businesses/investments in affiliates

 — 

(10,171)

Proceeds from marketable securities

 — 

3,282

Net cash used in investing activities

(25,732)

(41,427)

Cash flows from financing activities:

 

 

Proceeds from line of credit

 — 

 5,000

Issuance of common stock

 244

 174

Excess tax benefit from stock issuance

 29

 131

Tax payments for restricted stock

 (7,474)

 (4,813)

Net cash provided by (used in) financing activities

(7,201)

492

Effect of exchange rate changes on cash and cash equivalents

 (115)

 (188)

Net increase (decrease) in cash and cash equivalents

15,046

(13,305)

Cash and cash equivalents at beginning of period

 57,502

 21,340

Cash and cash equivalents at end of period

$ 72,548

 8,035










































































 

 

BUFFALO WILD WINGS, INC. AND SUBSIDIARIES

Supplemental Information

 

Restaurant Count

 

Company-owned Restaurants:

 

 

Q1

Q2

Q3

Q4

2014

443

 

 

 

2013

397

407

415

434

2012

327

330

343

381

2011

263

277

288

319

2010

235

234

244

259
























































 

Franchised Restaurants:

 

 

Q1

Q2

Q3

Q4

2014

569

 

 

 

2013

514

525

534

559

2012

505

505

511

510

2011

488

492

498

498

2010

430

447

457

473




































































 

Same-Store Sales

 

Company-owned Restaurants:

 

 

Q1

Q2

Q3

Q4

Year

2014

6.6%

 

 

 

 

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%






























































 

Franchised Restaurants:

 

 

Q1

Q2

Q3

Q4

Year

2014

5.0%

 

 

 

 

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%)
















































































 

 

BUFFALO WILD WINGS, INC. AND SUBSIDIARIES

Supplemental Information

 

Average Weekly Sales Volumes

 

Company-owned Restaurants:

 

 

Q1

Q2

Q3

Q4

Year

2014

60,966

 

 

 

 

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






























































 

Franchised Restaurants:

 

 

Q1

Q2

Q3

Q4

Year

2014

63,852

 

 

 

 

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

CONTACT: Investor Relations Contact:
Heather Pribyl
952.253.0731

Page: 1


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