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 1,000th 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® 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 1,000 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
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