Buffalo Wild Wings, Inc. (NASDAQ: BWLD) announced today
financial results for the third quarter ended September 27,
2015. Highlights for the third quarter versus the same period a
year ago were:
- Total revenue increased 22.0% to $455.5
million
- Company-owned restaurant sales
increased 23.2% to $431.8 million
- Same-store sales increased 3.9%
at company-owned restaurants and 1.2% at franchised
restaurants
- Net earnings decreased 11.6% to $19.2
million from $21.8 million, and earnings per diluted share
decreased 12.2% to $1.00 from $1.14
Sally Smith, President and Chief Executive Officer, commented,
“During the third quarter we acquired 41 franchised locations in
Texas, New Mexico, and Hawaii, which includes two restaurants under
development. We sincerely thank the hundreds of Team Members across
the country that were part of the successful transition to company
ownership. Combined with our ongoing company-owned development and
other franchise acquisitions during the last 12 months, we've
increased our company-owned Buffalo Wild Wings locations by 24%
compared to a year ago.”
Ms. Smith continued, “Our same-store sales in the third quarter
increased 3.9% at company-owned restaurants and 1.2% at
franchised locations, despite a shift in the sports calendar
resulting in one less week of football and fewer pay-per-view
events than last year. We estimate this negatively impacted our
same-store sales by 80 basis points. Cost of sales and labor as a
percentage of restaurant sales were higher compared to the prior
year, and, with the additional depreciation, amortization, and
other expenses related to the recently completed franchise
acquisition, our earnings per diluted share decreased
year-over-year to $1.00.”
Total revenue increased 22.0% to $455.5 million in the third
quarter, compared to $373.5 million in the third quarter of 2014.
Company-owned restaurant sales for the quarter increased
23.2% over the same period in 2014, to $431.8 million, driven by a
same-store sales increase at company-owned Buffalo Wild
Wings restaurants of 3.9% and 109 additional Buffalo Wild Wings
restaurants at the end of the third quarter of 2015. Franchise
royalties and fees increased 3.6% to $23.8 million for the quarter
versus $22.9 million in the third quarter of 2014. This increase is
attributed to increased international franchise fees and increased
same-store sales of 1.2% for the franchised Buffalo Wild Wings
restaurants in operation at the end of the period compared to the
same period in 2014.
Average weekly sales for company-owned Buffalo Wild Wings
restaurants were $61,831 for the third quarter of 2015, compared to
$59,643 for the same quarter last year, a 3.7% increase. Franchised
Buffalo Wild Wings restaurants in the United States averaged
$62,819 for the period versus $61,586 in the third quarter a year
ago, a 2.0% increase.
For the third quarter, net earnings decreased 11.6% to $19.2
million versus $21.8 million in the third quarter of 2014. Earnings
per diluted share were $1.00, compared to third quarter 2014
earnings per diluted share of $1.14.
2015 and 2016 Outlook
Ms. Smith remarked, “Same-store sales increased 2.8% at
company-owned restaurants and 0.8% at franchised locations for the
first four weeks of the fourth quarter of 2015 compared to 5.4% and
5.1%, respectively, for the same period last year. As we approach
year end, we know our Guests will be rooting for their favorite NFL
teams to reach the Super Bowl and their favorite college teams to
reach a bowl game. We're excited to be the title sponsor of the
Buffalo Wild Wings Citrus Bowl again this year."
Ms. Smith continued, "In anticipation of our purchase of the 41
franchised locations, we previously revised our 2015 net earnings
growth goal to 13% to account for the incremental expense and
transition costs we expected to incur in the third and fourth
quarters. Based on our year-to-date results and updated outlook for
the fourth quarter, we are now anticipating single-digit net
earnings growth for the year."
Ms. Smith concluded, "We remain confident the Buffalo Wild Wings
brand is strong and we're continually investing in our Guest
Experience to increase sales. We're looking forward to 2016 and
plan to open 50 company-owned Buffalo Wild Wings. Buffalo Wild
Wings franchisees in the United States anticipate opening 30
restaurants and international franchisees should open approximately
15 locations. R Taco and PizzaRev will continue their growth plans
through both company-owned and franchise development next year. As
a result of this unit expansion combined with our ongoing
sales-driving and operational initiatives, we believe net earnings
growth in 2016 should exceed 20%.”
Buffalo Wild Wings will be hosting a conference call today,
October 28, 2015 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 November 4, 2015.
To access this replay, please dial 1.858.384.5517 password
391456.
About the Company
Buffalo Wild Wings, Inc., founded in 1982 and headquartered in
Minneapolis, 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 1,140 Buffalo Wild Wings locations around the
world.
To stay up-to-date on all the latest events and offers for
sports fans and wing lovers, like Buffalo Wild Wings on Facebook,
follow @BWWings on Twitter and visit www.BuffaloWildWings.com.
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 fourth quarter sales trends and projected unit and net earnings
growth rates for 2015, 2016, 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,” “goal,” “intends,” “may,” “plans,”
“potential,” “predicts,” “should,” “scheduled,” 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 and
supply chain consistency, 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 28, 2014, 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 Nine
months ended September 27, 2015
September 28, 2014 September 27, 2015
September 28, 2014 Revenue: Restaurant sales $
431,763 350,524 1,248,595 1,038,610 Franchise royalties and fees
23,763 22,934 73,904 68,697
Total revenue 455,526 373,458 1,322,499
1,107,307 Costs and expenses: Restaurant operating costs:
Cost of sales 126,878 101,886 370,398 296,210 Labor 138,897 111,897
398,585 324,663 Operating 63,343 52,364 178,716 151,419 Occupancy
24,210 19,796 68,554 58,048 Depreciation and amortization 33,610
24,776 90,887 71,354 General and administrative 33,714 27,784
97,937 86,163 Preopening 4,777 3,594 9,251 8,369 Loss on asset
disposals and impairment 1,269 1,371 4,180
3,369 Total costs and expenses 426,698
343,468 1,218,508 999,595 Income from
operations 28,828 29,990 103,991 107,712 Other expense
(1,400 ) (236 ) (1,434 ) (128 ) Earnings before income taxes 27,428
29,754 102,557 107,584 Income tax expense 8,261 8,001
32,973 33,812 Net earnings including
noncontrolling interests 19,167 21,753 69,584
73,772 Net loss attributable to noncontrolling
interests (69 ) — (214 ) — Net earnings
attributable to Buffalo Wild Wings $ 19,236 21,753
69,798 73,772 Earnings per common share – basic $
1.01 1.15 3.67 3.90 Earnings per common share – diluted $ 1.00 1.14
3.65 3.89 Weighted average shares outstanding – basic 19,022 18,923
19,006 18,900 Weighted average shares outstanding – diluted 19,167
19,021 19,118 18,985
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 Nine months ended
September 27, 2015 September 28,
2014 September 27, 2015 September
28, 2014 Revenue: Restaurant sales 94.8 % 93.9 % 94.4 %
93.8 % Franchise royalties and fees 5.2 6.1 5.6
6.2 Total revenue 100.0 100.0 100.0
100.0 Costs and expenses: Restaurant operating costs:
Cost of sales 29.4 29.1 29.7 28.5 Labor 32.2 31.9 31.9 31.3
Operating 14.7 14.9 14.3 14.6 Occupancy 5.6 5.6 5.5 5.6
Depreciation and amortization 7.4 6.6 6.9 6.4 General and
administrative 7.4 7.4 7.4 7.8 Preopening 1.0 1.0 0.7 0.8 Loss on
asset disposals and impairment 0.3 0.4 0.3 0.3
Total costs and expenses 93.7 92.0 92.1
90.3 Income from operations 6.3 8.0 7.9 9.7 Other expense
(0.3 ) (0.1 ) (0.1 ) (0.0 ) Earnings before income taxes 6.0 8.0
7.8 9.7 Income tax expense 1.8 2.1 2.5 3.1
Net earnings including noncontrolling interests 4.2
5.8 5.3 6.7 Net loss attributable to
noncontrolling interests (0.0 ) — (0.0 ) — Net
earnings attributable to Buffalo Wild Wings 4.2 % 5.8 % 5.3 % 6.7 %
BUFFALO WILD WINGS, INC. AND
SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands) (unaudited)
September 27, 2015 December 28,
2014 Assets Current assets: Cash and cash equivalents
$ 11,479 93,329 Marketable securities 8,721 19,547 Accounts
receivable, net of allowance of $25 35,168 28,322 Inventory 13,378
11,893 Prepaid expenses 8,815 4,215 Refundable income taxes 10,322
9,779 Deferred income taxes 17,419 15,807 Restricted assets
48,400 81,037 Total current assets 153,702 263,929
Property and equipment, net 604,300 494,401 Reacquired
franchise rights, net 132,993 37,631 Other assets 28,424 19,399
Goodwill 99,678 38,106 Total assets $
1,019,097 853,466
Liabilities and
Stockholders’ Equity Current liabilities: Unearned franchise
fees $ 2,148 2,099 Accounts payable 55,573 37,241 Accrued
compensation and benefits 40,613 59,161 Accrued expenses 19,624
16,573 Current portion of long-term debt 1,927 — Current portion of
deferred lease credits — 743 Due to related party 31,634 —
System-wide payables 48,778 79,668 Total
current liabilities 200,297 195,485 Long-term liabilities:
Other liabilities 17,674 6,388 Deferred income taxes 27,191 39,815
Long-term debt 74,856 — Deferred lease credits 44,170
37,479 Total liabilities 364,188 279,167
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
19,033,253 and 18,937,131, respectively 160,510 148,114 Retained
earnings 497,493 427,695 Accumulated other comprehensive loss
(3,466 ) (2,096 ) Total stockholders’ equity 654,537
573,713 Noncontrolling interests 372
586 Total equity 654,909 574,299 Total
liabilities and equity $ 1,019,097 853,466
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollar
amounts in thousands) (unaudited) Nine
months ended September 27, 2015
September 28, 2014 Cash flows from operating
activities: Net earnings including noncontrolling interests $
69,584 73,772 Adjustments to reconcile net earnings to net cash
provided by operations: Depreciation 86,119 67,932 Amortization
4,768 3,422 Loss on asset disposals and impairment 4,180 3,369
Deferred lease credits 4,260 4,209 Deferred income taxes (13,561 )
(18,774 ) Stock-based compensation 11,689 10,251 Excess tax benefit
from stock issuance (1,088 ) 217 Change in operating assets and
liabilities, net of effect of acquisitions: Trading securities (173
) (657 ) Accounts receivable (4,982 ) (3,323 ) Inventory (421 )
(400 ) Prepaid expenses (868 ) (7,245 ) Other assets 74 (160 )
Unearned franchise fees 104 333 Accounts payable 6,901 4,128 Income
taxes 545 6,541 Accrued expenses (248 ) 99 Net cash
provided by operating activities 166,883 143,714
Cash flows from investing activities: Acquisition of
property and equipment (124,233 ) (95,347 ) Acquisition of
businesses (209,713 ) (7,307 ) Purchase of marketable securities
(12,301 ) (17,993 ) Proceeds from marketable securities
23,300 — Net cash used in investing activities
(322,947 ) (120,647 ) Cash flows from financing activities:
Proceeds from line of credit 197,422 — Repayments of line of credit
(150,467 ) — Proceeds from related party borrowing 31,634 — Other
financing activities (580 ) — Issuance of common stock 2,903 1,829
Excess tax benefit from stock issuance 1,088 (217 ) Tax payments
for restricted stock units (7,847 ) (7,474 ) Net cash
provided by (used in) financing activities 74,153
(5,862 ) Effect of exchange rate changes on cash and cash
equivalents 61 (612 ) Net increase (decrease) in cash
and cash equivalents (81,850 ) 16,593 Cash and cash equivalents at
beginning of period 93,329 57,502 Cash and
cash equivalents at end of period $ 11,479 74,095
BUFFALO WILD WINGS, INC. AND
SUBSIDIARIESSupplemental Information
Restaurant Count
Company-owned Restaurants (includes
Buffalo Wild Wings, R Taco, and Buffalo Wild Wings-owned PizzaRev
locations):
Q1
Q2
Q3
Q4
2015 501 517 573
2014 443 449 463 491
2013 397
407 415 434
2012 327 330 343 381
2011 263 277 288 319
Franchised Restaurants (includes
Buffalo Wild Wings and R Taco locations):
Q1
Q2
Q3
Q4
2015 593 593 569
2014 569 579 588 591
2013 514
525 534 559
2012 505 505 511 510
2011 488 492 498 498
Restaurant Count Rollforward:
Nine months ended September 27, 2015
September 28, 2014 Corporate Franchise
Total Corporate Franchise
Total Buffalo Wild Wings Beginning of period 487 584
1,071 434 559 993 Opened 29 37 66 24 32 56 Acquired 54 (54) — 3 (3)
— Closed/Relocated (2) (4) (6) (2) (7) (9) End of period 568 563
1,131 459 581 1,040
R Taco Beginning of period 2 7 9 — — —
Opened — — — — — — Acquired 1 (1) — 2 7 9 Closed/Relocated — — — —
— — End of period 3 6 9 2 7 9
PizzaRev Beginning of period 2
n/a 2 — n/a — Opened — n/a — 2 n/a 2 Acquired — n/a — — n/a —
Closed/Relocated — n/a — — n/a — End of period 2 n/a 2 2 n/a 2
Consolidated End
of the period 573 569 1,142 463 588 1,051
BUFFALO WILD WINGS, INC. AND
SUBSIDIARIESSupplemental Information
Same-Store Sales at Buffalo Wild Wings
locations in United States and Canada
Company-owned Restaurants:
Q1
Q2
Q3
Q4
Year
2015 7.0% 4.2% 3.9%
2014 6.6% 7.7% 6.0% 5.9% 6.5%
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%
Franchised Restaurants:
Q1
Q2
Q3
Q4
Year
2015 6.0% 2.5% 1.2%
2014 5.0% 6.5% 5.7% 5.1% 5.6%
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%
Average Weekly Sales Volumes at Buffalo
Wild Wings locations in United States and Canada
Company-owned Restaurants:
Q1
Q2
Q3
Q4
Year
2015 $ 64,851 61,960 61,831
2014 60,966 59,403 59,643
62,119 60,470
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
Franchised Restaurants:
Q1
Q2
Q3
Q4
Year
2015 $ 67,075 63,904 62,819
2014 63,852 61,845 61,586
63,949 62,595
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
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version on businesswire.com: http://www.businesswire.com/news/home/20151028006312/en/
Buffalo Wild Wings, Inc.Investor Relations
Contact:Heather Pribyl, 952-253-0731
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