Exhibit 99.1
Buffalo Wild Wings, Inc. Announces Third Quarter 2005 Results;
Earnings Per Diluted Share Increase 57% to $0.22
MINNEAPOLIS--(BUSINESS WIRE)--Oct. 25, 2005--Buffalo Wild Wings,
Inc. (Nasdaq:BWLD), announced today financial results for the third
quarter ended September 25, 2005. Highlights for the third quarter
versus the same period a year ago were:
-- Total revenue increased 21.1% to $51.7 million
-- Company-owned restaurant sales grew 21.1% to $45.9 million
-- Same-store sales increased 1.8% at company-owned restaurants
and 1.1% at franchised restaurants
-- Earnings per diluted share increased 57% to $0.22 from $0.14
Sally Smith, President and Chief Executive Officer commented,
"Same-store sales were positive for the quarter, trending over last
year's 9.9% company-owned and 5.7% franchised same-store sales levels,
withstanding the impact of the hurricanes, which we estimate reduced
franchised same-store sales by $250,000 due to temporary closures and
shortened hours of operation. We did take an $849,000, or $0.06 per
share, goodwill and asset impairment charge for the quarter. The
effect of this charge was offset by lower wing prices, lower
stock-based compensation expense, and controlled general and
administrative expense growth. Bottom line: we delivered $0.22 to our
shareholders, a 57% increase over prior year."
Total revenue, which includes company-owned restaurant sales and
franchise royalties and fees, increased 21.1% to $51.7 million in the
third quarter compared to $42.7 million in the third quarter of 2004.
Company-owned restaurant sales for the quarter grew 21.1% to $45.9
million aided by a company-owned same-store sales increase of 1.8% and
19 more company-owned locations in operation at the end of the third
quarter 2005 relative to the same period in 2004. Franchise royalties
and fees increased 21.5% to $5.8 million versus $4.8 million in the
prior year, due to a franchised same-store sales increase of 1.1% and
45 more franchised restaurants at the end of the period versus a year
ago.
Average weekly sales for company-owned restaurants were $31,361
for the third quarter of 2005 compared to $30,983 for the same quarter
last year, a 1.2% increase. Franchised restaurants averaged $40,149
for the period versus $38,727 in the third quarter a year ago, a 3.7%
increase.
For the third quarter, earnings per diluted share were $0.22,
versus earnings per diluted share of $0.14 in the third quarter of
2004.
Fourth Quarter 2005 Outlook
For the fourth quarter ending December 25, 2005, the company
anticipates total revenue of approximately $59 million to $60 million,
based on estimated same-store sales increases of 1% to 2% for both
company-owned restaurants and franchised locations, as well as the
addition of 6 new company-owned and 12 new franchised restaurants.
Earnings per diluted share for the fourth quarter are expected to
range from $0.32 to $0.34. This estimate is based on the previously
mentioned revenue assumptions, average chicken wing prices for the
fourth quarter of $1.25 per pound, stock-based compensation expense of
$467,000 and diluted weighted average shares outstanding of 8.7
million.
Ms. Smith concluded, "We are excited about our fourth quarter
media campaigns - our largest advertising spend of the year - which
includes the rollout of our Boneless Thursdays promotion. We believe
that advertising, paired with an ongoing focus on hospitality and
operational execution, will drive sales in the fourth quarter. As 2005
comes to an end, we are confident in our ability to return another
quarter of impressive year over year earnings results. And, as we look
forward to 2006, we are well-positioned to continue bringing bottom
line growth to our shareholders."
Included in this release is information regarding restaurant unit
counts, same-store sales, average weekly sales volumes and average
quarterly wing prices per pound. Our management team believes such
information is an important measure of our performance and is useful
in assessing consumer acceptance of the Buffalo Wild Wings Grill & Bar
concept. Franchise information also provides an understanding of our
revenues as franchise royalties and fees are based on the opening of
franchised units and their sales. However, these sales measures are
not prepared in accordance with U.S. Generally Accepted Accounting
Principles (GAAP), should not be considered in isolation or as a
substitute for other measures of performance prepared in accordance
with GAAP, and may not be comparable to sales measures as defined or
used by other companies.
Buffalo Wild Wings will be hosting a conference call today,
October 25, 2005 at 5:00 p.m. ET to discuss these results. There will
be a simultaneous webcast conducted at our website
http://www.buffalowildwings.com.
About the Company
Buffalo Wild Wings, Inc., founded in 1982 and headquartered in
Minneapolis, Minnesota, is an established and growing owner, operator
and franchisor of Buffalo Wild Wings Grill & Bar restaurants featuring
a variety of boldly flavored, made-to-order menu items including
Buffalo, New York-style chicken wings spun in one of 12 signature
sauces. The widespread appeal of Buffalo Wild Wings establishes it as
an inviting, neighborhood destination with over 350 restaurants in 34
states.
Forward-looking Statements
Certain statements in this release that are not historical facts,
including, without limitation, those relating to our anticipated
financial performance, growth prospects and expected store openings
for the fourth quarter and full year of 2005, are forward-looking
statements that involve risks and uncertainties. Such statements are
based upon the current beliefs and expectations of our management.
Actual results may vary materially from those contained in
forward-looking statements based on a number of factors including,
without limitation, the actual number of locations opening during the
fourth quarter and full year of 2005, the sales at these and our other
company-owned and franchised locations, our ability to successfully
operate in new markets, the cost of wings, the success of our
marketing initiatives, our ability to control other restaurant
operating costs and other factors disclosed from time to time in our
filings with the U.S. Securities and Exchange Commission. 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 amounts in thousands except share and per share data)
(unaudited)
Three months ended Nine months ended
--------------------- ---------------------
Sept. 26, Sept. 25, Sept. 26, Sept. 25,
2004 2005 2004 2005
---------- ---------- ---------- ----------
Revenue:
Restaurant sales 37,900 45,892 109,117 133,535
Franchise royalties and
fees 4,807 5,840 13,325 17,213
---------- ---------- ---------- ----------
Total revenue 42,707 51,732 122,442 150,748
---------- ---------- ---------- ----------
Costs and expenses:
Restaurant operating
costs:
Cost of sales 12,755 14,096 37,524 42,618
Labor 11,203 13,743 31,257 39,936
Operating 5,925 7,529 16,705 21,052
Occupancy 2,719 3,616 7,594 10,167
Depreciation 2,245 2,998 6,434 8,505
General and
administrative (1) 5,009 5,383 13,632 16,643
Preopening 585 818 1,379 1,731
Restaurant closures and
impairment 508 849 547 871
---------- ---------- ---------- ----------
Total costs and
expenses 40,949 49,032 115,072 141,523
---------- ---------- ---------- ----------
Income from operations 1,758 2,700 7,370 9,225
---------- ---------- ---------- ----------
Other income:
Interest income 174 349 462 958
---------- ---------- ---------- ----------
174 349 462 958
---------- ---------- ---------- ----------
Earnings before income
taxes 1,932 3,049 7,832 10,183
Income tax expense 753 1,174 3,055 3,921
---------- ---------- ---------- ----------
Net earnings 1,179 1,875 4,777 6,262
========== ========== ========== ==========
Earnings per common
share--basic 0.14 0.22 0.59 0.74
Earnings per common
share--diluted 0.14 0.22 0.56 0.72
Weighted average shares
outstanding--basic 8,253,186 8,472,529 8,114,078 8,429,352
Weighted average shares
outstanding--diluted 8,599,355 8,678,108 8,576,845 8,673,544
(1) Contains stock-based compensation of $291, $193, $418, and
$1,047.
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
--------------------- ---------------------
Sept 26, Sept 25, Sept 26, Sept 25,
2004 2005 2004 2005
---------- ---------- ---------- ----------
Revenue:
Restaurant sales 88.7% 88.7% 89.1% 88.6%
Franchising royalties
and fees 11.3 11.3 10.9 11.4
---------- ---------- ---------- ----------
Total revenue 100.0 100.0 100.0 100.0
---------- ---------- ---------- ----------
Costs and expenses:
Restaurant operating
costs:
Cost of sales 33.7 30.7 34.4 31.9
Labor 29.6 29.9 28.6 29.9
Operating 15.6 16.4 15.3 15.8
Occupancy 7.2 7.9 7.0 7.6
Depreciation 5.3 5.8 5.3 5.6
General and
administrative 11.7 10.4 11.1 11.0
Preopening 1.4 1.6 1.1 1.1
Restaurant closures and
asset impairment 1.2 1.6 0.4 0.6
---------- ---------- ---------- ----------
Total costs and
expenses 95.9 94.8 94.0 93.9
---------- ---------- ---------- ----------
Income from operations 4.1 5.2 6.0 6.1
---------- ---------- ---------- ----------
Other income:
Interest income 0.4 0.7 0.4 0.6
---------- ---------- ---------- ----------
Earnings before income
taxes 4.5 5.9 6.4 6.8
Income tax expense 1.8 2.3 2.5 2.6
---------- ---------- ---------- ----------
Net earnings 2.8 3.6 3.9 4.2
========== ========== ========== ==========
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except share data)
(unaudited)
December 26, September 25,
2004 2005
------------- -------------
Assets
Current assets:
Cash and cash equivalents $12,557 3,974
Marketable securities 36,454 46,259
Accounts receivable--franchisees, net of
allowance of $25 689 791
Accounts receivable--other 2,077 3,113
Inventory 1,207 1,284
Income taxes receivable 1,727 --
Prepaid expenses 1,470 1,755
Deferred income taxes 840 1,360
------------- -------------
Total current assets 57,021 58,536
Property and equipment, net 59,649 66,094
Restricted cash 782 2,164
Other assets 774 738
Goodwill 759 369
------------- -------------
Total assets $118,985 127,901
============= =============
Liabilities and Stockholders' Equity
Current liabilities:
Unearned franchise fees $2,433 2,128
Accounts payable 5,383 5,426
Accrued compensation and benefits 6,339 5,785
Accrued expenses 3,663 3,591
Accrued income taxes -- 1,019
Current portion of deferred lease
credits 509 574
------------- -------------
Total current liabilities 18,327 18,523
Long-term liabilities:
Marketing fund payables 782 2,164
Deferred income taxes 6,298 5,069
Deferred lease credits, net of current
portion 7,871 8,692
------------- -------------
Total liabilities 33,278 34,448
------------- -------------
Commitments and contingencies
Stockholders' equity:
Undesignated stock, 5,600,000 shares
authorized -- --
Common stock, no par value. Authorized
15,600,000 shares; issued and
outstanding 8,425,771 and 8,602,763,
respectively 71,491 73,642
Deferred compensation (1,817) (2,484)
Retained earnings 16,033 22,295
------------- -------------
Total stockholders' equity 85,707 93,453
------------- -------------
Total liabilities and stockholders'
equity $118,985 127,901
============= =============
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands)
(unaudited)
Nine months ended
---------------------------
September 26, September 25,
2004 2005
------------- -------------
Cash flows from operating activities:
Net earnings $4,777 6,262
Adjustments to reconcile net earnings to
cash provided by operations:
Depreciation 6,434 8,505
Amortization 165 (62)
Restaurant closures and impairment 547 871
Deferred lease credits 7 554
Deferred income taxes 1,076 (1,749)
Stock-based compensation 418 1,047
Change in operating assets and
liabilities:
Accounts receivable (615) (1,158)
Inventory (123) (77)
Prepaid expenses 656 (285)
Other assets (35) 36
Unearned franchise fees 167 (305)
Accounts payable 49 43
Income taxes (371) 2,746
Accrued expenses 95 (626)
------------- -------------
Net cash provided by operating
activities 13,247 15,802
------------- -------------
Cash flows from investing activities:
Acquisition of property and equipment (15,225) (15,079)
Purchase of marketable securities (77,354) (65,590)
Proceeds from maturities of marketable
securities 44,435 55,847
------------- -------------
Net cash used in investing
activities (48,144) (24,822)
------------- -------------
Cash flows from financing activities:
Issuance of common stock 1,083 763
Tax payments for restricted stock -- (326)
------------- -------------
Net cash provided by financing
activities 1,083 437
------------- -------------
Net decrease in cash and cash
equivalents (33,814) (8,583)
Cash and cash equivalents at beginning of
period 49,538 12,557
------------- -------------
Cash and cash equivalents at end of period $15,724 3,974
============= =============
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
Supplemental Information
Restaurant Count
Company-owned Restaurants:
Q1 Q2 Q3 Q4
-- -- -- --
2005 106 110 116
2004 88 92 97 103
2003 73 74 77 84
2002 56 60 63 70
2001 45 47 48 53
Franchised Restaurants:
Q1 Q2 Q3 Q4
-- -- -- --
2005 212 224 234
2004 168 175 189 203
2003 131 138 142 161
2002 108 119 123 129
2001 95 97 100 105
Quarterly Same-Store Sales
Company-owned Restaurants:
Q1 Q2 Q3 Q4 Year
-- -- -- -- ----
2005 6.1% 2.7% 1.8%
2004 11.1% 10.6% 9.9% 7.6% 9.7%
2003 (1.4%) 2.7% 6.7% 8.5% 4.3%
2002 5.6% 4.6% (0.7%) (1.8%) 1.6%
2001 9.1% 7.0% 6.4% 12.1% 8.8%
Franchised Restaurants:
Q1 Q2 Q3 Q4 Year
-- -- -- -- ----
2005 3.2% 1.8% 1.1%
2004 12.0% 10.4% 5.7% 3.7% 7.6%
2003 (0.4%) 2.3% 8.5% 10.7% 5.6%
2002 4.2% 4.5% 0.0% (1.8%) 1.5%
2001 4.3% 3.7% 5.3% 8.4% 5.5%
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
Supplemental Information
Average Weekly Sales Volumes
Company-owned Restaurants:
Q1 Q2 Q3 Q4 Year
-- -- -- -- ----
2005 $33,195 30,531 31,361
2004 32,289 30,248 30,983 33,038 31,663
2003 28,782 27,132 28,281 31,171 28,886
2002 29,564 26,330 25,916 28,466 27,547
2001 27,675 25,644 26,722 29,426 27,382
Franchised Restaurants:
Q1 Q2 Q3 Q4 Year
-- -- -- -- ----
2005 $41,309 39,824 40,149
2004 39,678 38,072 38,727 40,926 39,402
2003 33,920 33,393 35,289 39,014 35,491
2002 32,956 31,623 31,619 34,023 32,574
2001 30,533 28,820 29,835 33,267 30,652
Average Quarterly Wing Prices Per Pound
Q1 Q2 Q3 Q4 Year
-- -- -- -- ----
2005 $1.45 1.14 1.08
2004 1.49 1.46 1.35 1.30 1.39
2003 1.01 1.02 1.00 1.21 1.06
2002 1.11 .87 .84 .78 .89
2001 1.14 1.22 1.22 1.16 1.18
CONTACT: Buffalo Wild Wings, Inc., Minneapolis
Investor Relations Contact:
Mary Twinem, 952-253-0731
or
Media Contact:
Michael Fox, 203-682-8200