Buffalo Wild Wings, Inc. (Nasdaq:BWLD) announced today financial
results for the fourth quarter and fiscal year ended December 28,
2014. Highlights for the fourth quarter versus the same period a
year ago were:
- Total revenue increased 19.7% to $408.9 million
- Company-owned restaurant sales increased 20.2%
to $384.4 million
- Same-store sales grew 5.9% at
company-owned restaurants and 5.1% at franchised
restaurants
- Net earnings decreased (2.4%) to $20.3 million from 20.8
million, and earnings per diluted share decreased (2.7%) to $1.07
from $1.10
Sally Smith, President and Chief Executive Officer, commented,
"Buffalo Wild Wings had a great year. We grew our net earnings over
31% in 2014, achieving earnings per diluted share of $4.95. Our
2014 same-store sales increased 6.5% at company-owned restaurants
and 5.6% at franchised locations. With wall-to-wall televisions and
big screens, Buffalo Wild Wings remains the place to cheer on your
favorite sports teams. Our restaurants deliver memorable game-day
experiences to Guests no matter what the season!"
Ms. Smith continued, "We're exceptionally pleased with our
restaurants' performance in the fourth quarter and, in particular,
with our same-store sales results of 5.9% at
company-owned restaurants and 5.1% at franchised
locations. As previously communicated, we anticipated higher food
and labor costs compared to the prior year. Food costs rose as the
cost per pound for traditional chicken wings increased over the
fourth quarter last year. Labor as a percentage of restaurant sales
increased primarily due to expansion in states with higher wage
rates and staffing of all company-owned restaurants with Guest
Experience Captains. Captains are an essential part of the Guest
Experience Business Model, which we believe drives sales. We
achieved net earnings per share of $1.07 for the quarter, a slight
decline from 2013 as a result of the increased food and labor
costs."
Total revenue increased 19.7% to $408.9 million in the fourth
quarter compared to $341.5 million in the fourth quarter of 2013.
Company-owned restaurant sales for the quarter
increased 20.2% over the same period in 2013, to $384.4 million,
driven by a same-store sales increase at
company-owned Buffalo Wild Wings restaurants of 5.9% and 53
additional company-owned Buffalo Wild Wings restaurants at the end
of the fourth quarter of 2014 relative to the same period in 2013.
Franchise royalties and fees increased 13.0% to $24.5 million for
the quarter versus $21.7 million in the fourth quarter of 2013.
This increase is attributed to a same-store sales
increase at franchised Buffalo Wild Wings locations of 5.1% and 25
additional franchised Buffalo Wild Wings locations at the end of
the period versus a year ago.
Average weekly sales for company-owned Buffalo Wild Wings
restaurants were $62,119 for the fourth quarter of 2014 compared to
$58,204 for the same quarter last year, a 6.7% increase. Franchised
Buffalo Wild Wings locations in the United States averaged $63,949
for the period versus $61,167 in the fourth quarter a year ago, a
4.5% increase.
For the fourth quarter, net earnings decreased (2.4%) to $20.3
million versus $20.8 million in the fourth quarter of 2013.
Earnings per diluted share were $1.07, as compared to fourth
quarter 2013 earnings per diluted share of $1.10.
2015 Outlook
Ms. Smith remarked, "Same-store sales increased 11.9% at
company-owned restaurants and 11.1% at franchised locations for the
first five weeks of the first quarter of 2015 compared to 4.8% and
2.1%, respectively, for the same period last year. Sales were
particularly strong during the college bowl games, including the
Buffalo Wild Wings Citrus Bowl™ and the national championship game.
With the football season complete, our Guests are looking forward
to the excitement and intense competition of the college basketball
tournament. As the Official Hangout of NCAA® March Madness®,
we'll feature food and beverage items inspired by the tournament's
four regions, launch a new national advertising campaign, and have
basketball-inspired GameBreak™ competitions."
Ms. Smith concluded, "We will continue our coast-to-coast
development this year with the addition of 50 company-owned
restaurants and 40 franchised locations, building toward our goal
of 1,700 Buffalo Wild Wings in the United States and
Canada. Our franchise partner in the Philippines opened their
first restaurant in January and franchised locations in Saudi
Arabia and United Arab Emirates are expected to open soon. In 2015,
we will complete the roll out of tabletop tablets and we are
testing menu ordering from tablets in the first half of the year.
We are building a platform for long-term sustained growth for our
shareholders and remain confident in our 18% net earnings growth
goal for 2015."
Buffalo Wild Wings will be hosting a conference call today,
February 5, 2015 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 12, 2015.
To access this replay, please dial 1.858.384.5517 password
7200827.
NCAA® and March Madness® are trademarks of the National
Collegiate Athletic Association.
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 1,070 Buffalo Wild Wings locations in the
United States, Canada, and Mexico.
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 first quarter sales
trends and projected unit and net earnings growth rates for 2015,
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 |
Twelve months ended |
|
December 28, |
December 29, |
December 28, |
December 29, |
|
2014 |
2013 |
2014 |
2013 |
Revenue: |
|
|
|
|
Restaurant sales |
$ 384,380 |
319,830 |
1,422,990 |
1,185,351 |
Franchise royalties and
fees |
24,536 |
21,717 |
93,233 |
81,368 |
Total
revenue |
408,916 |
341,547 |
1,516,223 |
1,266,719 |
Costs and expenses: |
|
|
|
|
Restaurant operating
costs: |
|
|
|
|
Cost of
sales |
117,680 |
95,345 |
413,890 |
363,755 |
Labor |
119,569 |
95,802 |
444,232 |
360,302 |
Operating |
58,164 |
47,353 |
209,583 |
174,338 |
Occupancy |
20,883 |
18,127 |
78,931 |
68,394 |
Depreciation and
amortization |
27,100 |
22,164 |
98,454 |
84,978 |
General and administrative |
31,875 |
26,620 |
118,038 |
96,182 |
Preopening |
5,175 |
4,965 |
13,544 |
14,647 |
Loss on asset disposals and
impairment |
458 |
1,560 |
3,827 |
3,262 |
Total costs and
expenses |
380,904 |
311,936 |
1,380,499 |
1,165,858 |
Income from operations |
28,012 |
29,611 |
135,724 |
100,861 |
Investment income (loss) |
(189) |
30 |
(317) |
674 |
Earnings before income taxes |
27,823 |
29,641 |
135,407 |
101,535 |
Income tax expense |
7,540 |
8,826 |
41,352 |
29,981 |
Net earnings including noncontrolling
interests |
20,283 |
20,815 |
94,055 |
71,554 |
Net loss attributable to noncontrolling
interests |
(39) |
— |
(39) |
— |
Net earnings attributable to Buffalo Wild
Wings |
$ 20,322 |
20,815 |
94,094 |
71,554 |
Earnings per common share – basic |
$ 1.07 |
1.11 |
4.98 |
3.81 |
Earnings per common share – diluted |
$ 1.07 |
1.10 |
4.95 |
3.79 |
Weighted average shares outstanding –
basic |
18,931 |
18,787 |
18,908 |
18,770 |
Weighted average shares outstanding –
diluted |
19,051 |
18,965 |
19,002 |
18,872 |
|
|
|
|
|
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 28, |
December 29, |
December 28, |
December 29, |
|
2014 |
2013 |
2014 |
2013 |
Revenue: |
|
|
|
|
Restaurant sales |
94.0% |
93.6% |
93.9% |
93.6% |
Franchise royalties and
fees |
6.0 |
6.4 |
6.1 |
6.4 |
Total
revenue |
100.0 |
100.0 |
100.0 |
100.0 |
Costs and expenses: |
|
|
|
|
Restaurant operating
costs: |
|
|
|
|
Cost of
sales |
30.6 |
29.8 |
29.1 |
30.7 |
Labor |
31.1 |
30.0 |
31.2 |
30.4 |
Operating |
15.1 |
14.8 |
14.7 |
14.7 |
Occupancy |
5.4 |
5.7 |
5.5 |
5.8 |
Depreciation and
amortization |
6.6 |
6.5 |
6.5 |
6.7 |
General and administrative |
7.8 |
7.8 |
7.8 |
7.6 |
Preopening |
1.3 |
1.5 |
0.9 |
1.2 |
Loss on asset disposals and
impairment |
0.1 |
0.5 |
0.3 |
0.3 |
Total costs and
expenses |
93.1 |
91.3 |
91.0 |
92.0 |
Income from operations |
6.9 |
8.7 |
9.0 |
8.0 |
Investment income (loss) |
— |
— |
— |
0.1 |
Earnings before income taxes |
6.8 |
8.7 |
8.9 |
8.0 |
Income tax expense |
1.8 |
2.6 |
2.7 |
2.4 |
Net earnings including noncontrolling
interests |
5.0 |
6.1 |
6.2 |
5.6 |
Net loss attributable to noncontrolling
interests |
— |
— |
— |
— |
Net earnings attributable to Buffalo Wild
Wings |
5.0% |
6.1% |
6.2% |
5.6% |
|
|
|
|
|
|
|
|
|
|
BUFFALO WILD WINGS,
INC. AND SUBSIDIARIES |
|
CONSOLIDATED BALANCE
SHEET |
|
(Dollar amounts in
thousands) |
|
(unaudited) |
|
|
|
|
December 28, |
December 29, |
|
2014 |
2013 |
Assets |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 93,329 |
57,502 |
Marketable securities |
19,547 |
7,584 |
Accounts receivable, net of
allowance of $25 |
28,322 |
21,845 |
Inventory |
11,893 |
9,492 |
Prepaid expenses |
4,215 |
4,509 |
Refundable income taxes |
9,779 |
4,329 |
Deferred income taxes |
15,807 |
9,287 |
Restricted assets |
81,037 |
68,208 |
Total current
assets |
263,929 |
182,756 |
|
|
|
Property and equipment, net |
494,401 |
440,538 |
Reacquired franchise rights, net |
37,631 |
33,403 |
Other assets |
19,399 |
16,498 |
Goodwill |
38,106 |
32,533 |
Total assets |
$ 853,466 |
705,728 |
|
|
|
Liabilities and Stockholders'
Equity |
|
|
Current liabilities: |
|
|
Unearned franchise fees |
$ 2,099 |
1,818 |
Accounts payable |
37,241 |
31,806 |
Accrued compensation and
benefits |
59,161 |
52,049 |
Accrued expenses |
16,573 |
13,784 |
Current portion of deferred
lease credits |
743 |
— |
System-wide payables |
79,668 |
67,017 |
Total current
liabilities |
195,485 |
166,474 |
|
|
|
Long-term liabilities: |
|
|
Other liabilities |
6,388 |
1,913 |
Deferred income taxes |
39,815 |
37,822 |
Deferred lease credits |
37,479 |
33,711 |
Total
liabilities |
279,167 |
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 18,937,131 and
18,803,663, respectively |
148,114 |
133,203 |
Retained earnings |
427,695 |
333,601 |
Accumulated other comprehensive
loss |
(2,096) |
(996) |
Total
stockholders' equity |
573,713 |
465,808 |
Noncontrolling interest |
586 |
— |
Total equity |
574,299 |
465,808 |
Total liabilities
and equity |
$ 853,466 |
705,728 |
|
|
|
|
|
|
BUFFALO WILD WINGS,
INC. AND SUBSIDIARIES |
|
CONSOLIDATED STATEMENTS
OF CASH FLOWS |
|
(Dollar amounts in
thousands) |
|
(unaudited) |
|
|
|
|
Twelve months ended |
|
December 28, |
December 29, |
|
2014 |
2013 |
Cash flows from operating activities: |
|
|
Net earnings including
noncontrolling interests |
$ 94,055 |
71,554 |
Adjustments to reconcile net
earnings to net cash provided by operations: |
|
|
Depreciation |
93,773 |
79,881 |
Amortization |
4,681 |
5,097 |
Loss on asset
disposals and impairment |
3,827 |
3,253 |
Deferred lease
credits |
4,331 |
5,247 |
Deferred income
taxes |
(3,946) |
(2,209) |
Stock-based
compensation |
14,253 |
11,496 |
Excess tax
benefit from stock issuance |
(2,500) |
(5,471) |
Change in
operating assets and liabilities, net of effect of
acquisitions: |
|
|
Trading
securities |
(972) |
(1,287) |
Accounts
receivable |
(3,443) |
(2,012) |
Inventory |
(2,178) |
(1,581) |
Prepaid
expenses |
383 |
(647) |
Other assets |
(139) |
(1,218) |
Unearned
franchise fees |
191 |
55 |
Accounts
payable |
5,343 |
(1,467) |
Income taxes |
(2,948) |
5,264 |
Accrued
expenses |
13,155 |
13,405 |
Net cash provided
by operating activities |
217,866 |
179,360 |
Cash flows from investing activities: |
|
|
Acquisition of property and
equipment |
(137,466) |
(138,735) |
Acquisition of
businesses/investments in affiliates |
(30,572) |
(10,288) |
Purchase of marketable
securities |
(22,991) |
— |
Proceeds from marketable
securities |
12,000 |
3,282 |
Net cash used in
investing activities |
(179,029) |
(145,741) |
Cash flows from financing activities: |
|
|
Proceeds from line of
credit |
— |
5,000 |
Repayments of line of
credit |
— |
(5,000) |
Issuance of common stock |
3,032 |
2,514 |
Excess tax benefit from stock
issuance |
2,500 |
5,471 |
Tax payments for restricted
stock units |
(7,474) |
(4,946) |
Net cash used in
financing activities |
(1,942) |
3,039 |
Effect of exchange rate changes on cash and
cash equivalents |
(1,068) |
(496) |
Net increase in cash and cash
equivalents |
35,827 |
36,162 |
Cash and cash equivalents at beginning of
period |
57,502 |
21,340 |
Cash and cash equivalents at end of
period |
$ 93,329 |
57,502 |
|
|
|
|
|
|
BUFFALO WILD WINGS, INC.
AND SUBSIDIARIES |
Supplemental
Information |
|
|
|
|
|
Restaurant
Count |
Company-owned Restaurants
(includes Buffalo Wild Wings, Rusty Taco, and Buffalo Wild
Wings-owned PizzaRev locations): |
|
|
|
|
|
|
Q1 |
Q2 |
Q3 |
Q4 |
2014 |
443 |
449 |
463 |
491 |
2013 |
397 |
407 |
415 |
434 |
2012 |
327 |
330 |
343 |
381 |
2011 |
263 |
277 |
288 |
319 |
2010 |
235 |
234 |
244 |
259 |
|
|
|
|
|
Franchised Restaurants
(includes Buffalo Wild Wings and Rusty Taco
locations): |
|
|
|
|
|
|
Q1 |
Q2 |
Q3 |
Q4 |
2014 |
569 |
579 |
588 |
591 |
2013 |
514 |
525 |
534 |
559 |
2012 |
505 |
505 |
511 |
510 |
2011 |
488 |
492 |
498 |
498 |
2010 |
430 |
447 |
457 |
473 |
|
|
|
|
|
|
|
|
|
|
Same-Store Sales at
Buffalo Wild Wings locations in United States and
Canada |
|
Company-owned
Restaurants: |
|
|
|
|
|
|
|
Q1 |
Q2 |
Q3 |
Q4 |
Year |
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% |
2010 |
0.1% |
(0.1%) |
2.6% |
(0.3%) |
0.6% |
|
|
|
|
|
|
Franchised
Restaurants: |
|
|
|
|
|
|
|
Q1 |
Q2 |
Q3 |
Q4 |
Year |
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% |
2010 |
0.7% |
(0.7%) |
0.3% |
(1.1%) |
(0.2%) |
|
|
|
|
|
|
|
|
|
|
|
|
BUFFALO WILD WINGS, INC.
AND SUBSIDIARIES |
Supplemental
Information |
|
|
|
|
|
|
Average Weekly Sales
Volumes at Buffalo Wild Wings locations in United States and
Canada |
|
|
|
|
|
|
Company-owned
Restaurants: |
|
|
|
|
|
|
|
Q1 |
Q2 |
Q3 |
Q4 |
Year |
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 |
2010 |
45,327 |
43,021 |
44,394 |
45,595 |
44,601 |
|
|
|
|
|
|
Franchised
Restaurants: |
|
|
|
|
|
|
|
Q1 |
Q2 |
Q3 |
Q4 |
Year |
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 |
2010 |
51,532 |
49,051 |
49,005 |
49,837 |
49,835 |
|
|
|
|
|
|
CONTACT: Investor Relations Contact:
Heather Pribyl
952.253.0731
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