2016 Earnings Per Diluted Share Outlook of
$5.65 to $5.85
Buffalo Wild Wings, Inc. (NASDAQ: BWLD) announced today
financial results for the first quarter ended March 27, 2016.
Highlights for the first quarter versus the same period a year ago
were:
- Total revenue increased 15.4% to $508.3
million
- Company-owned restaurant sales
increased 16.6% to $483.9 million
- Same-store sales decreased 1.7%
at company-owned restaurants and 2.4% at franchised
restaurants
- Net earnings increased 12.8% to $32.8
million from $29.0 million, and earnings per diluted share
increased 13.5% to $1.73 from $1.52
Sally Smith, President and Chief Executive Officer, commented,
“Our total revenue in the first quarter increased 15.4%, when
compared to the prior year, resulting from continued unit
development and franchise acquisitions over the last 12 months. We
are dissatisfied to report a same-store sales decline and we're
undertaking several sales-driving initiatives to regain momentum.
We were able to manage costs and improve our restaurant-level
margin, and earnings per diluted share increased 13.5%
year-over-year to $1.73.”
Total revenue increased 15.4% to $508.3 million in the first
quarter, compared to $440.6 million in the first quarter of 2015.
Company-owned restaurant sales for the quarter increased
16.6% over the same period in 2015, to $483.9 million, driven by
100 additional Buffalo Wild Wings® restaurants at the end of the
first quarter of 2016, partially offset by a same-store sales
decrease of 1.7%. Franchise royalties and fees decreased 5.0% to
$24.3 million for the quarter, versus $25.6 million in the first
quarter of 2015. This decrease is attributed to seven fewer
franchised Buffalo Wild Wings locations and a same-store sales
decrease of 2.4% at franchised Buffalo Wild Wings restaurants in
operation at the end of the period, compared to the same period in
2015.
Average weekly sales for company-owned Buffalo Wild Wings
restaurants were $62,829 for the first quarter of 2016, compared to
$64,851 for the same quarter last year, a 3.1% decrease. Franchised
Buffalo Wild Wings restaurants in the United States averaged
$65,636 for the period, versus $67,075 in the first quarter a year
ago, a 2.1% decrease.
Other income in 2016 consisted primarily of a gain related to
the valuation of contingent consideration for a franchise
acquisition of $1.1 million, partially offset by interest expense
of $0.9 million.
Under the previously announced share repurchase authorization,
173,892 shares were repurchased during the first quarter of 2016
for a total of $25 million.
For the first quarter, net earnings increased 12.8% to $32.8
million, versus $29.0 million in the first quarter of 2015.
Earnings per diluted share were $1.73, compared to first quarter
2015 earnings per diluted share of $1.52.
2016 Outlook
Ms. Smith remarked, "We are focused on sales-driving initiatives
to regain momentum in 2016. To strengthen our FastBreak™ lunch
program, we're piloting a speed of service guarantee. We're
promoting Wing Tuesdays® while evaluating different pricing and
bundling options for this value day. Soccer is a growing sport in
the United States and we'll be the place to watch all the action on
the pitch for the major tournaments this summer."
Ms. Smith concluded, "The Buffalo Wild Wings brand remains
strong and poised to deliver long-term earnings growth. In 2016,
we're continuing our development of new company-owned and
franchised Buffalo Wild Wings restaurants in the United States and
we are aggressively remodeling locations. Given our recent sales
trends and an increasing outlook for the cost of traditional
chicken wings, we believe earnings per diluted share in 2016 should
be $5.65 to $5.85.”
For 2016, the company expects the following new unit
development:
- Approximately 40 company-owned Buffalo
Wild Wings restaurants
- 30 to 35 franchised Buffalo Wild Wings
locations in the United States
- 12 to 15 franchised Buffalo Wild Wing
locations internationally
- 6 company-owned and 4 franchised R Taco
restaurants
- Continued unit expansion by
PizzaRev
For 2016, the company expects the following:
- Improving same-store sales
- Deflationary food costs, excluding
traditional chicken wings
- Depreciation and amortization expense
of $150 to $155 million
- Share repurchase activity of
approximately $100 million
- Earnings per diluted share of $5.65 to
$5.85
- Capital expenditures of approximately
$190 million, excluding additional franchise acquisitions or
emerging brand investments
Buffalo Wild Wings will be hosting a conference call today,
April 26, 2016 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 May 3, 2016. To
access this replay, please dial 1.858.384.5517 password
5721467.
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 1,180 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 second quarter trends and projected unit and net earnings
growth rates for 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 international 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 27, 2015, 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 March 27,
March 29, 2016 2015 Revenue:
Restaurant sales $ 483,911 414,972 Franchise royalties and fees
24,346 25,614 Total revenue 508,257
440,586 Costs and expenses: Restaurant operating
costs: Cost of sales 143,823 125,677 Labor 149,129 130,394
Operating 69,680 58,551 Occupancy 26,723 21,990 Depreciation and
amortization 37,549 28,069 General and administrative 31,665 30,522
Preopening 1,863 1,270 Loss on asset disposals 1,222
605 Total costs and expenses 461,654 397,078
Income from operations 46,603 43,508 Interest and other
income (expense) 27 (75 ) Earnings before income
taxes 46,630 43,433 Income tax expense 13,952 14,448
Net earnings including noncontrolling interests
32,678 28,985 Net loss attributable to noncontrolling
interests (95 ) (78 ) Net earnings attributable to Buffalo
Wild Wings $ 32,773 29,063 Earnings per common share
– basic $ 1.73 1.53 Earnings per common share – diluted $ 1.73 1.52
Weighted average shares outstanding – basic 18,922 18,993 Weighted
average shares outstanding – diluted 18,957 19,074
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 March 27,
March 29, 2016 2015 Revenue: Restaurant
sales 95.2 % 94.2 % Franchise royalties and fees 4.8 5.8
Total revenue 100.0 100.0 Costs and expenses:
Restaurant operating costs: Cost of sales 29.7 30.3 Labor 30.8 31.4
Operating 14.4 14.1 Occupancy 5.5 5.3 Depreciation and amortization
7.4 6.4 General and administrative 6.2 6.9 Preopening 0.4 0.3 Loss
on asset disposals 0.2 0.1 Total costs and expenses
90.8 90.1 Income from operations 9.2 9.9 Interest and
other income (expense) 0.0 (0.0 ) Earnings before income
taxes 9.2 9.9 Income tax expense 2.7 3.3 Net earnings
including noncontrolling interests 6.4 6.6 Net loss
attributable to noncontrolling interests (0.0 ) (0.0 ) Net earnings
attributable to Buffalo Wild Wings 6.4 % 6.6 %
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES CONSOLIDATED
BALANCE SHEETS (Dollar amounts in thousands)
(unaudited) March 27,
December 27, 2016 2015 Assets
Current assets: Cash and cash equivalents $ 11,693 11,220
Marketable securities 9,147 9,043 Accounts receivable, net of
allowance of $25 33,873 34,087 Inventory 14,583 15,351 Prepaid
expenses 5,509 6,386 Refundable income taxes — 21,591 Restricted
assets 22,880 100,073 Total current assets
97,685 197,751 Property and equipment, net 593,670 604,712
Reacquired franchise rights, net 128,175 129,282 Other assets
36,122 26,536 Goodwill 115,823 114,101 Total
assets $ 971,475 1,072,382
Liabilities and
Stockholders’ Equity Current liabilities: Unearned franchise
fees $ 1,963 2,144 Accounts payable 40,762 44,760 Accrued
compensation and benefits 31,943 55,578 Accrued expenses 19,675
21,678 Income tax payable 1,189 — Current portion of long-term debt
and capital lease obligations 4,787 2,147 Current portion of
deferred lease credits 76 59 System-wide payables 81,220
137,257 Total current liabilities 181,615 263,623
Long-term liabilities: Other liabilities 16,168 16,473
Deferred income taxes 24,585 23,726 Long-term debt and capital
lease obligations, net of current portion 42,423 70,954 Deferred
lease credits 42,636 41,869 Total liabilities
307,427 416,645 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 18,750,276 and
18,917,776, respectively 159,265 160,353 Retained earnings 508,332
499,085 Accumulated other comprehensive loss (3,847 ) (4,094
) Total stockholders’ equity 663,750 655,344
Noncontrolling interests 298 393 Total equity
664,048 655,737 Total liabilities and equity $
971,475 1,072,382
BUFFALO WILD
WINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH
FLOWS (Dollar amounts in thousands) (unaudited)
Three months ended March 27,
March 29, 2016 2015 Cash flows
from operating activities: Net earnings including noncontrolling
interests $ 32,678 28,985 Adjustments to reconcile net earnings to
net cash provided by operations: Depreciation 34,552 26,851
Amortization 2,997 1,218 Loss on asset disposals 1,222 605 Deferred
lease credits 2,067 1,159 Deferred income taxes 858 (5,508 )
Stock-based compensation 1,404 2,745 Excess tax benefit from stock
issuance (33 ) (66 ) Change in fair value of contingent
consideration (1,106 ) — Loss on investments in affiliates 158 —
Change in operating assets and liabilities, net of effect of
acquisitions: Trading securities (104 ) (328 ) Accounts receivable
(1,297 ) (2,053 ) Inventory 806 471 Prepaid expenses 889 (5,619 )
Other assets (428 ) 154 Unearned franchise fees (181 ) 362 Accounts
payable (706 ) (1,037 ) Income taxes 22,813 17,796 Accrued expenses
(19,488 ) (18,374 ) Net cash provided by operating
activities 77,101 47,361 Cash flows from
investing activities: Acquisition of property and equipment (34,094
) (25,788 ) Acquisition of businesses (3,860 ) (13,894 ) Purchase
of marketable securities — (12,297 ) Proceeds from marketable
securities — 11,155 Net cash used in investing
activities (37,954 ) (40,824 ) Cash flows from financing
activities: Proceeds from line of credit 108,633 — Repayments of
line of credit (135,514 ) — Borrowings from restricted funds 22,622
— Repurchases of common stock (25,000 ) — Other financing
activities (500 ) — Issuance of common stock 434 231 Excess tax
benefit from stock issuance 33 66 Tax payments for restricted stock
units (9,172 ) (7,627 ) Net cash used in financing
activities (38,464 ) (7,330 ) Effect of exchange rate
changes on cash and cash equivalents (210 ) 65 Net
increase (decrease) in cash and cash equivalents 473 (728 ) Cash
and cash equivalents at beginning of period 11,220
93,329 Cash and cash equivalents at end of period $ 11,693
92,601
BUFFALO WILD WINGS, INC. AND
SUBSIDIARIES Supplemental Information
Restaurant Count Company-owned Restaurants
(includes Buffalo Wild Wings, R Taco, and Buffalo Wild Wings-owned
PizzaRev locations):
Q1
Q2
Q3
Q4
2016 603
2015 501 517 573 596
2014 443 449 463
491
2013 397 407 415 434
2012 327 330 343 381
Franchised Restaurants (includes
Buffalo Wild Wings and R Taco locations):
Q1
Q2
Q3
Q4
2016 587
2015 593 593 569 579
2014 569 579 588
591
2013 514 525 534 559
2012 505 505 511 510
Restaurant Count Rollforward:
Three Months Ended March 27, 2016
March 29, 2015 Corporate
Franchise Total Corporate
Franchise Total Buffalo Wild
Wings Beginning of period 590 573 1,163 487 584 1,071 Opened 6
8 14 3 11 14 Acquired 1 (1 ) — 6 (6 ) — Closed/Relocated (1 ) —
(1 ) — (2 ) (2 ) End of period 596 580 1,176 496 587 1,083
R Taco Beginning of period 4 6 10 2 7 9 Opened 1 1 2 — — —
Acquired — — — 1 (1 ) — Closed/Relocated — — —
— — — End of period 5 7 12 3 6 9
PizzaRev
Beginning of period 2 n/a 2 2 n/a 2 Opened — n/a — — n/a — 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 603
587 1,190 501 593 1,094
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
Supplemental Information Same-Store Sales at
Buffalo Wild Wings locations in United States and Canada
Company-owned Restaurants:
Q1
Q2
Q3
Q4
Year
2016 (1.7%)
2015 7.0% 4.2% 3.9% 1.9% 4.2%
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%
Franchised Restaurants:
Q1
Q2
Q3
Q4
Year
2016 (2.4%)
2015 6.0% 2.5% 1.2% 0.1% 2.5%
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%
Average Weekly Sales Volumes at Buffalo
Wild Wings locations in United States and Canada
Company-owned Restaurants:
Q1
Q2
Q3
Q4
Year
2016 $ 62,829
2015 64,851 61,960 61,831 61,971 62,529
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
Franchised Restaurants:
Q1
Q2
Q3
Q4
Year
2016 $ 65,636
2015 67,075 63,904 62,819 64,032 64,474
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
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version on businesswire.com: http://www.businesswire.com/news/home/20160426006844/en/
Buffalo Wild Wings, Inc.Investor Relations:Heather
Pribyl, 952-540-2095
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