- Earnings per diluted share increase of 57% to $0.22 -MINNEAPOLIS, Jul 31, 2007 (BUSINESS WIRE) -- Buffalo Wild Wings, Inc. (Nasdaq:BWLD), announced today financial
results for the second quarter ended July 1, 2007. Highlights for the
second quarter versus the same period a year ago were:
-- Total revenue increased 22.1% to $76.0 million
-- Company-owned restaurant sales grew 22.7% to $67.5 million
-- Same-store sales increased 8.1% at company-owned restaurants
and 4.0% at franchised restaurants
-- Earnings per diluted share increased 57% to $0.22 from $0.14
Sally Smith, President and Chief Executive Officer, commented,
"Our second quarter same-store sales were again industry-leading, with
an 8.1% increase at company-owned restaurants and a 4.0% increase at
franchised restaurants, demonstrating that Buffalo Wild Wings is
executing on its brand promise YOU HAVE TO BE HERE(TM). Nearly every
line of our statement of earnings for the second quarter showed margin
improvement over last year, delivering earnings per diluted share of
$0.22, an impressive 57% increase."
Total revenue, which includes company-owned restaurant sales and
franchise royalties and fees, increased 22.1% to $76.0 million in the
second quarter compared to $62.3 million in the second quarter of
2006. Company-owned restaurant sales for the quarter increased 22.7%
to $67.5 million driven by a company-owned same-store sales increase
of 8.1% and 16 more company-owned restaurants in operation at the end
of second quarter 2007 relative to the same period in 2006. Franchise
royalties and fees increased 17.2% to $8.5 million versus $7.2 million
in the prior year. This increase was due to a franchised same-store
sales increase of 4.0% and 31 more franchised restaurants at the end
of the period versus a year ago.
Average weekly sales for company-owned restaurants were $36,655
for the second quarter of 2007 compared to $33,660 for the same
quarter last year, an 8.9% increase. Franchised restaurants averaged
$43,998 for the period versus $42,338 in the second quarter a year
ago, a 3.9% increase.
For the second quarter, earnings per diluted share were $0.22, as
compared to second quarter 2006 earnings per diluted share of $0.14.
2007 Outlook
Ms. Smith concluded, "We are on track to meet our growth goals for
2007. We enthusiastically look forward to the kick-off of football
season. With our guest-focused operations plan, enhanced media
program, and the anticipated purchase of our Las Vegas franchised
restaurants, along with a busy restaurant opening schedule, the
remainder of the year will be exciting."
Buffalo Wild Wings will be hosting a conference call today, July
31, 2007 at 4:00 p.m. Central Daylight Time to discuss these results.
There will be a simultaneous webcast conducted at our website
http://www.buffalowildwings.com.
A replay of the call will be available until August 7, 2007. To
access this replay, please dial 1.973.341.3080, password 9046989.
About the Company
Buffalo Wild Wings, Inc., founded in 1982 and headquartered in
Minneapolis, Minnesota, is a growing owner, operator and franchisor of
restaurants featuring a variety of boldly-flavored, made-to-order menu
items including Buffalo-style chicken wings spun in one of 14
signature sauces. Buffalo Wild Wings is an inviting neighborhood
destination with widespread appeal and is the recipient of dozens of
"Best Wings" and "Best Sports Bar" awards from across the country.
There are currently over 445 Buffalo Wild Wings locations across 37
states.
Forward-looking Statements
Certain statements in this release that are not historical facts,
including, without limitation, those relating to our anticipated Las
Vegas restaurant acquisition and our expectations to meet our 2007
growth goals, are forward-looking statements that involve risks and
uncertainties. Such statements are based upon the current beliefs and
expectations of our management. Actual results may vary materially
from those contained in forward-looking statements based on a number
of factors including, without limitation, the timing, outcome and
impact of the Las Vegas acquisition, the actual number of locations
opening in the future, the sales at these and our other company-owned
and franchised locations, our ability to successfully operate in new
markets, the cost of fresh chicken wings, the success of our marketing
initiatives, our ability to control restaurant labor and other
restaurant operating costs and other factors disclosed from time to
time in our filings with the U.S. Securities and Exchange Commission.
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 amounts in thousands except share and per share data)
(unaudited)
Three months ended Six months ended
---------------------- ---------------------
July 1, June 25, July 1, June 25,
2007 2006 2007 2006
----------- ---------- ---------- ----------
Revenue:
Restaurant sales $ 67,535 55,036 138,594 112,128
Franchise royalties and
fees 8,464 7,224 17,307 14,393
----------- ---------- ---------- ----------
Total
revenue 75,999 62,260 155,901 126,521
----------- ---------- ---------- ----------
Costs and expenses:
Restaurant operating
costs:
Cost of sales 20,591 17,028 42,649 35,033
Labor 21,050 16,562 42,157 33,157
Operating 10,729 9,236 22,201 18,679
Occupancy 4,892 4,269 9,610 8,358
Depreciation 4,028 3,433 7,920 6,763
General and
administrative (1) 8,538 7,441 17,155 14,519
Preopening 987 1,034 1,305 1,521
Loss on equipment
disposal 153 44 232 254
----------- ---------- ---------- ----------
Total costs
and expenses 70,968 59,047 143,229 118,284
----------- ---------- ---------- ----------
Income from operations 5,031 3,213 12,672 8,237
Interest income 755 500 1,455 970
----------- ---------- ---------- ----------
Earnings before income
taxes 5,786 3,713 14,127 9,207
Income tax expense 1,945 1,281 4,745 3,259
----------- ---------- ---------- ----------
Net earnings $ 3,841 2,432 9,382 5,948
=========== ========== ========== ==========
Earnings per common share
- basic $ 0.22 0.14 0.54 0.35
Earnings per common share
- diluted 0.22 0.14 0.53 0.34
Weighted average shares
outstanding - basic 17,560,163 17,111,178 17,504,096 17,087,382
Weighted average shares
outstanding - diluted 17,743,876 17,509,790 17,715,613 17,492,466
--------------------------
(1) Contains stock-based compensation of $1,065, $683, $2,332, and
$1,539
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
------------------ -----------------
July 1, June 25, July 1, June 25,
2007 2006 2007 2006
--------- -------- -------- --------
Revenue:
Restaurant sales 88.9% 88.4% 88.9% 88.6%
Franchising royalties and fees 11.1 11.6 11.1 11.4
--------- -------- -------- --------
Total revenue 100.0 100.0 100.0 100.0
--------- -------- -------- --------
Costs and expenses:
Restaurant operating costs:
Cost of sales 30.5 30.9 30.8 31.2
Labor 31.2 30.1 30.4 29.6
Operating 15.9 16.8 16.0 16.7
Occupancy 7.2 7.8 6.9 7.5
Depreciation 5.3 5.5 5.1 5.3
General and administrative 11.2 12.0 11.0 11.5
Preopening 1.3 1.7 0.8 1.2
Loss on equipment disposal 0.2 0.1 0.1 0.2
--------- -------- -------- --------
Total costs and
expenses 93.4 94.8 91.9 93.5
--------- -------- -------- --------
Income from operations 6.6 5.2 8.1 6.5
Interest income 1.0 0.8 0.9 0.8
--------- -------- -------- --------
Earnings before income taxes 7.6 6.0 9.1 7.3
Income tax expense 2.6 2.1 3.0 2.6
--------- -------- -------- --------
Net earnings 5.1 3.9 6.0 4.7
========= ======== ======== ========
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands)
(unaudited)
July 1, December 31,
2007 2006
------------- ------------
Assets
Current assets:
Cash and cash equivalents $ 6,602 11,756
Marketable securities 64,505 52,829
Accounts receivable - franchisees, net
of allowance of $25 and $47,
respectively 769 929
Accounts receivable - other 5,282 5,212
Inventory 1,952 1,767
Income tax receivable 1,529 --
Prepaid expenses 1,471 1,052
Deferred income taxes 2,132 1,405
------------- ------------
Total current assets 84,242 74,950
Property and equipment, net 82,464 78,137
Restricted cash 7,066 6,007
Other assets 1,752 1,720
Goodwill 369 369
------------- ------------
Total assets $ 175,893 161,183
============= ============
Liabilities and Stockholders' Equity
Current liabilities:
Unearned franchise fees $ 2,364 2,347
Accounts payable 6,801 5,874
Income tax payable -- 264
Accrued compensation and benefits 9,846 10,963
Accrued expenses 5,219 5,538
Current portion of deferred lease
credits 276 794
Total current liabilities 24,506 25,780
Long-term liabilities:
Other liabilities 1,220 478
Marketing fund payables 7,066 6,007
Deferred income taxes 2,937 3,162
Deferred lease credits, net of current
portion 9,967 9,540
------------- ------------
Total liabilities 45,696 44,967
------------- ------------
Commitments and contingencies (note 9)
Stockholders' equity:
Undesignated stock, 1,000,000 and
5,600,000 shares authorized,
respectively -- --
Common stock, no par value. Authorized
20,200,000 and 15,600,000 shares,
respectively, issued and outstanding
17,889,682 and 17,591,180, respectively 79,629 75,030
Retained earnings 50,568 41,186
------------- ------------
Total stockholders' equity 130,197 116,216
------------- ------------
Total liabilities and stockholders'
equity $ 175,893 161,183
============= ============
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands)
(unaudited)
Six months ended
------------------
July 1, June 25,
2007 2006
--------- --------
Cash flows from operating activities:
Net earnings $ 9,382 5,948
Adjustments to reconcile net earnings to cash
provided by operations:
Depreciation 7,920 6,763
Amortization (43) (101)
Loss on equipment disposal 232 254
Deferred lease credits 391 220
Deferred income taxes (952) (1,742)
Stock-based compensation 2,332 1,539
Excess tax benefit from the exercise of stock
options (720) (181)
Change in operating assets and liabilities:
Purchase of marketable securities (210) --
Accounts receivable (392) (560)
Inventory (185) (42)
Prepaid expenses (419) 1,385
Other assets (32) (36)
Unearned franchise fees 17 (42)
Accounts payable 217 1,992
Income tax payable (1,073) (18)
Accrued expenses 1,176 206
--------- --------
Net cash provided by operating
activities 17,641 15,585
--------- --------
Cash flows from investing activities:
Acquisition of property and equipment (11,769) (12,381)
Purchase of marketable securities (93,339) (54,759)
Proceeds of marketable securities 81,916 54,108
--------- --------
Net cash used in investing
activities (23,192) (13,032)
--------- --------
Cash flows from financing activities:
Issuance of common stock 860 490
Tax payments for restricted stock (1,183) (687)
Excess tax benefit from the exercise of stock
options 720 181
--------- --------
Net cash provided by (used in)
financing activities 397 (16)
--------- --------
Net increase (decrease) in cash and
cash equivalents (5,154) 2,537
Cash and cash equivalents at beginning of period 11,756 3,986
--------- --------
Cash and cash equivalents at end of period $ 6,602 6,523
========= ========
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
Supplemental Information
Restaurant Count
Company-owned Restaurants:
Q1 Q2 Q3 Q4
--------- --------- --------- ---------
2007 140 145
2006 124 129 134 139
2005 106 110 116 122
2004 88 92 97 103
2003 73 74 77 84
Franchised Restaurants:
Q1 Q2 Q3 Q4
--------- --------- --------- ---------
2007 299 301
2006 260 270 278 290
2005 212 224 234 248
2004 168 175 189 203
2003 131 138 142 161
Same-Store Sales
Company-owned Restaurants:
Q1 Q2 Q3 Q4 Year
--------- --------- --------- --------- ----------
2007 8.7% 8.1%
2006 7.7% 8.2% 11.8% 13.2% 10.4%
2005 6.1% 2.7% 1.8% 2.5% 3.2%
2004 11.1% 10.6% 9.9% 7.6% 9.7%
2003 (1.4%) 2.7% 6.7% 8.5% 4.3%
Franchised Restaurants:
Q1 Q2 Q3 Q4 Year
--------- --------- --------- --------- ----------
2007 3.3% 4.0%
2006 6.7% 4.7% 6.4% 6.5% 6.1%
2005 3.2% 1.8% 1.1% 2.6% 2.2%
2004 12.0% 10.4% 5.7% 3.7% 7.6%
2003 (0.4%) 2.3% 8.5% 10.7% 5.6%
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
Supplemental Information
Average Weekly Sales Volumes
Company-owned Restaurants:
Q1 Q2 Q3 Q4 Year
--------- --------- --------- --------- ----------
2007 $ 39,254 36,655
2006 35,857 33,660 35,380 38,800 36,033
2005 33,195 30,531 31,361 33,953 32,304
2004 32,289 30,248 30,983 33,038 31,663
2003 28,782 27,132 28,281 31,171 28,886
Franchised Restaurants:
Q1 Q2 Q3 Q4 Year
--------- --------- --------- --------- ----------
2007 $ 46,439 43,998
2006 44,342 42,338 42,963 46,008 43,975
2005 41,309 39,824 40,149 42,533 40,999
2004 39,678 38,072 38,727 40,926 39,402
2003 33,920 33,393 35,289 39,014 35,491
Average Wing Price Per Pound
Q1 Q2 Q3 Q4 Year
--------- --------- --------- --------- ----------
2007 $ 1.40 1.25
2006 1.24 1.10 1.14 1.21 1.17
2005 1.45 1.14 1.08 1.17 1.20
2004 1.49 1.46 1.35 1.30 1.39
2003 1.01 1.02 1.00 1.21 1.06
SOURCE: Buffalo Wild Wings, Inc.
Buffalo Wild Wings, Inc.
Investor Relations Contact:
Mary Twinem, 952-253-0731
