UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
FORM 8-K
 
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
 
 
Date of Report (Date of earliest event reported):  February 5, 2015
 
 
BUFFALO WILD WINGS, INC.
(Exact name of registrant as specified in its charter)
 
 
 
 
 
 
Minnesota
000-24743
31-1455915
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
 
 
 
 
 
5500 Wayzata Boulevard, Suite 1600
Minneapolis, Minnesota
 
 
55416
(Address of principal executive offices)
 
(Zip Code)
 
Registrant’s telephone number, including area code          952-593-9943          
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





 
 
 
Item 2.02.
Results of Operations and Financial Condition.
 
On February 5, 2015, Buffalo Wild Wings, Inc. issued a press release announcing its 2014 fourth quarter and fiscal year financial results. A copy of the press release is furnished as Exhibit 99.1 hereto.
 
 
 
 
Item 9.01.
Financial Statements and Exhibits.
 
(d)     Exhibits.
 
 
 
Exhibit
Description
 
 
99.1
Press Release dated February 5, 2015






SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
BUFFALO WILD WINGS, INC.  
 
 
 
Date: February 5, 2015
By
/s/ Emily C. Decker     
 
 
Emily C. Decker
 
 
Senior Vice President, General Counsel and Secretary





EXHIBIT INDEX
 
 
 
 
 
Exhibit No.
Description
Manner of Filing
99.1
Press Release dated February 5, 2015
Furnished Electronically







FOR IMMEDIATE RELEASE


Investor Relations Contact:
Heather Pribyl
952.253.0731
 

Buffalo Wild Wings, Inc. Announces
Fourth Quarter Earnings per Share of $1.07
- 2014 Net Earnings Increased 31.5% to $94.1 million -

Minneapolis, Minnesota, February 5, 2015Buffalo 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,
2014
 
December 29,
2013
 
December 28,
2014
 
December 29,
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, 2014
 
December 29, 2013
 
December 28, 2014
 
December 29, 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, 2014
 
December 29, 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, 2014
 
December 29, 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


 



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