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Buffalo Wild Wings, Inc. Announces Second Quarter Earnings Per Share of $1.25

(July 29, 2014)


- Net Earnings Growth to Exceed 25% and Could Reach 30% -



MINNEAPOLIS, July 29, 2014 (GLOBE NEWSWIRE) -- Buffalo Wild Wings, Inc. (Nasdaq:BWLD) announced today financial results for the second quarter ended June 29, 2014. Highlights for the second quarter versus the same period a year ago were:




  • Total revenue increased 20.0% to $366.0 million


  • Company-owned restaurant sales grew 20.2% to $343.1 million


  • Same-store sales increased 7.7% at company-owned restaurants and 6.5% at franchised restaurants


  • Net earnings increased 43.8% to $23.7 million from $16.5 million, and earnings per diluted share increased 42.0% to $1.25 from $0.88



Sally Smith, President and Chief Executive Officer, commented, "We're pleased with our strong results in the second quarter. Same-store sales increased 7.7% at company-owned restaurants and 6.5% at franchised locations. Same-store sales were strong during the Final Four and continued through the NBA and NHL playoffs. We love it when playoff series have more games and extend into overtime! With the 2014 World Cup, we had an opportunity to showcase the brand and capture sales from the growing U.S. soccer audience. Sales during the tournament were robust, contributing 100 basis points to our company-owned same-store sales increase for the quarter."


Ms. Smith continued, "Our cost of sales percentage was lower than last year, primarily driven by a decrease in the price per pound for traditional chicken wings. Strong sales growth, combined with lower costs and leveraging expenses, produced net earnings growth of 43.8% and earnings per diluted share of $1.25."




Total revenue increased 20.0% to $366.0 million in the second quarter compared to $305.0 million in the second quarter of 2013. Company-owned restaurant sales for the quarter increased 20.2% over the same period in 2013, to $343.1 million, driven by a company-owned same-store sales increase of 7.7% and 41 additional company-owned Buffalo Wild Wings restaurants at the end of second quarter 2014 relative to the same period in 2013. Franchise royalties and fees increased 16.6% to $22.9 million for the quarter versus $19.6 million in the second quarter of 2013. This increase is attributed to a franchised same-store sales increase of 6.5% and 54 additional franchised restaurants at the end of the period versus a year ago.



Average weekly sales for company-owned restaurants were $59,403 for the second quarter of 2014 compared to $54,759 for the same quarter last year, an 8.5% increase. Franchised restaurants averaged $61,845 for the period versus $58,186 in the second quarter a year ago, a 6.3% increase.



For the second quarter, net earnings increased 43.8% to $23.7 million versus $16.5 million in the second quarter of 2013. Earnings per diluted share were $1.25, as compared to second quarter 2013 earnings per diluted share of $0.88.



2014 Outlook



Ms. Smith remarked, "Our same-store sales for the first four weeks of the third quarter were 8.2% at company-owned restaurants and 7.4% at franchised locations. Company-owned same-store sales include a benefit of 330 basis points from the World Cup. Looking ahead, we are preparing for our favorite time of the year, football season. Buffalo Wild Wings is the best place to host your fantasy football draft party and to watch all the games with friends. We believe that draft parties kick off a great football season at Buffalo Wild Wings."



Ms. Smith concluded, "We're very pleased with our sales momentum in the first seven months of 2014. We are investing for long-term growth and delivering impressive net earnings growth to Buffalo Wild Wings shareholders. Based on our year-to-date performance, our current same-store sales trends, and anticipated food costs and labor expense, we believe net earnings growth will exceed 25% for 2014, and could reach 30%."



Buffalo Wild Wings will be hosting a conference call today, July 29, 2014 at 4:00 p.m. Central Daylight 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 August 5, 2014. To access this replay, please dial 1.858.384.5517 password 1728851.



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 1,025 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, including but not limited to those relating to our third 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

Six months ended

 

June 29,

June 30,

June 29,

June 30,

 

2014

2013

2014

2013

Revenue:

 

 

 

 

Restaurant sales

$343,141

285,403

688,086

569,828

Franchise royalties and fees

22,853

19,604

45,763

39,543

 

 

 

 

 

Total revenue

365,994

305,007

733,849

609,371

 

 

 

 

 

Costs and expenses:

 

 

 

 

Restaurant operating costs:

 

 

 

 

Cost of sales

96,837

86,630

194,324

179,721

Labor

107,432

88,929

212,766

174,760

Operating

50,017

41,212

99,055

82,317

Occupancy

19,283

16,865

38,252

32,991

Depreciation and amortization

23,746

21,084

46,578

41,227

General and administrative

30,223

23,601

58,379

44,898

Preopening

2,197

2,420

4,775

6,691

Loss on asset disposals and impairment

1,211

229

1,998

800

 

 

 

 

 

Total costs and expenses

330,946

280,970

656,127

563,405

 

 

 

 

 

Income from operations

35,048

24,037

77,722

45,966

Other income (loss)

235

(84)

108

261

 

 

 

 

 

Earnings before income taxes

35,283

23,953

77,830

46,227

Income tax expense

11,580

7,464

25,811

13,359

 

 

 

 

 

Net earnings

$23,703

16,489

52,019

32,868

 

 

 

 

 

Earnings per common share – basic

$1.25

0.88

2.75

1.75

Earnings per common share – diluted

1.25

0.88

2.74

1.75

Weighted average shares outstanding – basic

18,904

18,768

18,888

18,758

Weighted average shares outstanding – diluted

18,981

18,827

18,967

18,815


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 29,

June 30,

June 29,

June 30,

 

2014

2013

2014

2013

 

 

 

 

 

Revenue:

 

 

 

 

Restaurant sales

93.8%

93.6%

93.8%

93.5%

Franchising royalties and fees

6.2

6.4

6.2

6.5

 

 

 

 

 

Total revenue

100.0

100.0

100.0

100.0

 

 

 

 

 

Costs and expenses:

 

 

 

 

Restaurant operating costs:

 

 

 

 

Cost of sales

28.2

30.4

28.2

31.5

Labor

31.3

31.2

30.9

30.7

Operating

14.6

14.4

14.4

14.4

Occupancy

5.6

5.9

5.6

5.8

Depreciation and amortization

6.5

6.9

6.3

6.8

General and administrative

8.3

7.7

8.0

7.4

Preopening

0.6

0.8

0.7

1.1

Loss on asset disposals and impairment

0.3

0.1

0.3

0.1

 

 

 

 

 

Total costs and expenses

90.4

92.1

89.4

92.5

 

 

 

 

 

Income from operations

9.6

7.9

10.6

7.5

Other income (loss)

0.1

(0.0)

0.0

0.0

 

 

 

 

 

Earnings before income taxes

9.6

7.9

10.6

7.6

Income tax expense

3.2

2.4

3.5

2.2

 

 

 

 

 

Net earnings

6.5%

5.4%

7.1%

5.4%











































































































































































































































































































 

BUFFALO WILD WINGS, INC. AND SUBSIDIARIES

 

CONSOLIDATED BALANCE SHEETS

 

(Dollar amounts in thousands)

 

(unaudited)

 

 

 

 

 

 

 

June 29,

December 29,

 

2014

2013

 

 

 

Assets

 

 

Current assets:

 

 

Cash and cash equivalents

$80,902

57,502

Marketable securities

20,149

7,584

Accounts receivable, net of allowance of $125 and $25 respectively

22,560

21,845

Inventory

10,100

9,492

Prepaid expenses

11,134

4,509

Refundable income taxes


4,329

Deferred income taxes

10,749

9,287

Restricted assets

43,401

68,208

 

 

 

Total current assets

198,995

182,756

 

 

 

Property and equipment, net

449,149

440,538

Reacquired franchise rights, net

31,137

33,403

Other assets

19,499

16,498

Goodwill

32,533

32,533

 

 

 

Total assets

$731,313

705,728

 

 

 

Liabilities and Stockholders' Equity

 

 

Current liabilities:

 

 

Unearned franchise fees

$1,760

1,818

Accounts payable

32,031

31,806

Accrued compensation and benefits

44,884

52,049

Accrued expenses

12,798

13,784

Income tax payable

1,438


Current portion of deferred lease credits

429


System-wide payables

43,037

67,017

 

 

 

Total current liabilities

136,377

166,474

 

 

 

Long-term liabilities:

 

 

Other liabilities

3,863

1,913

Deferred income taxes

28,638

37,822

Deferred lease credits, net of current portion

35,470

33,711

 

 

 

Total liabilities

204,348

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 18,920,578 and 18,803,663, respectively

142,377

133,203

Retained earnings

385,620

333,601

Accumulated other comprehensive loss

(1,032)

(996)

 

 

 

Total stockholders' equity

526,965

465,808

 

 

 

Total liabilities and stockholders' equity

$731,313

705,728





































































































































































































































































































 

BUFFALO WILD WINGS, INC. AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(Dollar amounts in thousands)

 

(unaudited)

 

 

 

 

 

 

 

Six months ended

 

June 29,

June 30,

 

2014

2013

 

 

 

Cash flows from operating activities:

 

 

Net earnings

$52,019

32,868

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

 

 

Depreciation

44,312

38,704

Amortization

2,266

2,524

Loss on asset disposals and impairment

1,998

800

Deferred lease credits

2,998

2,105

Deferred income taxes

(10,623)

(1,542)

Stock-based compensation

7,665

4,014

Excess tax benefit from stock issuance

(118)

(147)

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

 

 

Trading securities

(569)

(348)

Accounts receivable

(347)

3,478

Inventory

(608)

(678)

Prepaid expenses

(6,618)

1,653

Other assets

(2)

(852)

Unearned franchise fees

(58)

410

Accounts payable

69

(8,135)

Income taxes

5,885

2,133

Accrued expenses

1,019

(221)

 

 

 

Net cash provided by operating activities

99,288

76,766

 

 

 

Cash flows from investing activities:

 

 

Acquisition of property and equipment

(54,864)

(63,910)

Acquisition of businesses/investments in affiliates

(3,000)

(10,288)

Purchase of marketable securities

(11,996)


Proceeds from marketable securities


3,282

 

 

 

Net cash used in investing activities

(69,860)

(70,916)

 

 

 

Cash flows from financing activities:

 

 

Proceeds from line of credit


5,000

Repayments of line of credit


(5,000)

Issuance of common stock

1,665

1,152

Excess tax benefit from stock issuance

118

147

Tax payments for restricted stock units

(7,474)

(4,813)

 

 

 

Net cash used in financing activities

(5,691)

(3,514)

 

 

 

Effect of exchange rate changes on cash and cash equivalents

(337)

(177)

 

 

 

 

 

 

Net increase in cash and cash equivalents

23,400

2,159

Cash and cash equivalents at beginning of period

57,502

21,340

 

 

 

Cash and cash equivalents at end of period

$80,902

23,499









































































































































































































































































 

BUFFALO WILD WINGS, INC. AND SUBSIDIARIES

Supplemental Information

 

 

 

 

 

 

Restaurant Count

Company-owned Restaurants:

 

 

Q1

Q2

Q3

Q4

 

2014

443

449

 

 

 

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

579

 

 

 

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%

7.7%

 

 

 

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%

6.5%

 

 

 

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 at United States and Canada Buffalo Wild Wings

 

 

 

 

 

 

Company-owned Restaurants:

 

Q1

Q2

Q3

Q4

Year

2014

60,966

59,403

 

 

 

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

61,845

 

 

 

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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