Exhibit 99.1
Buffalo Wild Wings, Inc. Announces
First Quarter 2006 Results; Earnings Per Diluted Share Increase of 43%
to $0.40
MINNEAPOLIS--(BUSINESS WIRE)--April 25, 2006--Buffalo Wild Wings,
Inc. (Nasdaq:BWLD), announced today financial results for the first
quarter ended March 26, 2006. Highlights for the first quarter versus
the same period a year ago were:
-- Total revenue increased 26.5% to $64.3 million
-- Company-owned restaurant sales grew 26.7% to $57.1 million
-- Same-store sales increased 7.7% at company-owned restaurants
and 6.7% at franchised restaurants
-- Earnings per diluted share increased 43% to $0.40 from $0.28
Sally Smith, President and Chief Executive Officer, commented,
"We're off to a great start in 2006. Our revenue growth of 26.5% was
driven by same-store sales of 7.7% for company-owned and 6.7% for
franchised restaurants, as well as stronger new unit performance. This
growth, combined with strong operating results, translated into
earnings per diluted share of $0.40 in the first quarter, a 43%
increase over prior year."
Total revenue, which includes company-owned restaurant sales and
franchise royalties and fees, increased 26.5% to $64.3 million in the
first quarter compared to $50.8 million in the first quarter of 2005.
Company-owned restaurant sales for the quarter increased 26.7% to
$57.1 million driven by a company-owned same-store sales increase of
7.7% and 18 more company-owned restaurants in operation at the end of
first quarter 2006 relative to the same period in 2005. Franchise
royalties and fees increased 25.3% to $7.2 million versus $5.7 million
in the prior year. This increase was due to a franchised same-store
sales increase of 6.7% and 48 more franchised restaurants at the end
of the period versus a year ago.
Average weekly sales for company-owned restaurants were $35,857
for the first quarter of 2006 compared to $33,195 for the same quarter
last year, an 8.0% increase. Franchised restaurants averaged $44,342
for the period versus $41,309 in the first quarter a year ago, a 7.3%
increase.
For the first quarter, earnings per diluted share were $0.40, as
compared to first quarter 2005 earnings per diluted share of $0.28.
Second Quarter 2006 Outlook
For the second quarter ending June 25, 2006, we expect total
revenue of approximately $59 to $60 million, based on estimated
same-store sales increases of 4 to 6% for company-owned and 3 to 5%
for franchised restaurants, as well as the addition of five
company-owned and twelve franchised restaurants. Earnings per diluted
share for the second quarter are expected to range from $0.25 to
$0.28. This is based on the previously-mentioned revenue assumptions,
average chicken wing prices for the second quarter of $1.10 per pound,
preopening costs of $1 million, and stock-based compensation expense
of $700,000. Diluted weighted average shares outstanding are estimated
at 8.8 million.
"In the second quarter, our focus is on continuing both same-store
sales momentum and operational improvements over the prior year,"
commented Ms. Smith. "In the first quarter, we introduced our new
menu, four new sauces, a new rib product, and our new Crave It!
Combos(TM). We believe these exciting new choices, combined with our
attention to hospitality and guest satisfaction, will drive revenue
growth." Ms. Smith concluded, "We are committed to translating our
revenue growth into strong bottom-line results."
Included in this release is information regarding restaurant unit
counts, same-store sales and average weekly sales volumes. 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, April
25, 2006 at 4:00 p.m. Central Daylight Time to discuss these results.
There will be a simultaneous webcast conducted at our website
http://www.buffalowildwings.com.
A replay of the call will be available until May 2, 2006. To
access this replay, please dial (719) 457-0820, password 4892902.
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 our signature
sauces. The widespread appeal of Buffalo Wild Wings establishes it as
an inviting, neighborhood destination with more than 385 restaurants
in 36 states.
Forward-looking Statements
Certain statements in this release that are not historical facts,
including, without limitation, those relating to our anticipated
financial performance and expected store openings for the second
quarter 2006, 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 second quarter, 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
---------------------
March 27, March 26,
2005 2006
---------- ----------
Revenue:
Restaurant sales $ 45,073 57,092
Franchise royalties and fees 5,720 7,169
---------- ----------
Total revenue 50,793 64,261
---------- ----------
Costs and expenses:
Restaurant operating costs:
Cost of sales 15,231 18,005
Labor 13,217 16,595
Operating 6,857 9,443
Occupancy 3,156 4,089
Depreciation 2,675 3,330
General and administrative (1) 5,626 7,078
Preopening 313 487
Loss on disposals 18 210
---------- ----------
Total costs and expenses 47,093 59,237
---------- ----------
Income from operations 3,700 5,024
Interest income 272 470
---------- ----------
Earnings before income taxes 3,972 5,494
Income tax expense 1,521 1,978
---------- ----------
Net earnings $ 2,451 3,516
========== ==========
Earnings per common share - basic $ 0.29 0.41
Earnings per common share - diluted 0.28 0.40
Weighted average shares outstanding - basic 8,367,068 8,531,792
Weighted average shares outstanding - diluted 8,676,772 8,736,336
(1) Contains stock-based compensation of $523 and $856
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 26,
2005 2006
--------- ---------
Revenue:
Restaurant sales 88.7 % 88.8 %
Franchising royalties and fees 11.3 11.2
--------- ---------
Total revenue 100.0 100.0
--------- ---------
Costs and expenses:
Restaurant operating costs:
Cost of sales 33.8 31.5
Labor 29.3 29.1
Operating 15.2 16.5
Occupancy 7.0 7.2
Depreciation 5.3 5.2
General and administrative 11.1 11.0
Preopening 0.6 0.8
Loss on disposals -- 0.3
--------- ---------
Total costs and expenses 92.7 92.2
--------- ---------
Income from operations 7.3 7.8
Interest income 0.5 0.7
--------- ---------
Earnings before income taxes 7.8 8.5
Income tax expense 3.0 3.1
--------- ---------
Net earnings 4.8 % 5.5 %
========= =========
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands)
(unaudited)
December 25, March 26,
Assets 2005 2006
------------ ------------
Current assets:
Cash and cash equivalents $ 3,986 6,528
Marketable securities 48,418 50,037
Accounts receivable - franchisees, net of
allowance of $25 731 829
Accounts receivable - other 3,700 5,070
Inventory 1,502 1,567
Prepaid expenses 1,972 1,490
Deferred income taxes 770 1,374
------------ ------------
Total current assets 61,079 66,895
Property and equipment, net 68,693 69,839
Restricted cash 2,115 2,224
Other assets 867 873
Goodwill 369 369
------------ ------------
Total assets $ 133,123 140,200
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Unearned franchise fees $ 2,194 2,384
Accounts payable 6,628 7,505
Accrued income tax payable 102 2,775
Accrued compensation and benefits 6,775 5,711
Accrued expenses 3,900 4,318
Current portion of deferred lease credits 604 523
------------ ------------
Total current liabilities 20,203 23,216
Long-term liabilities:
Marketing fund payables 2,115 2,224
Deferred income taxes 4,755 4,109
Deferred lease credits, net of current
portion 9,202 9,364
------------ ------------
Total liabilities 36,275 38,913
------------ ------------
Commitments and contingencies
Stockholders' equity:
Undesignated stock, 5,600,000 shares
authorized, none issued -- --
Common stock, no par value. Authorized
15,600,000 shares; issued and
outstanding 8,616,222 and 8,707,174
respectively 74,503 72,858
Deferred compensation (2,568) --
Retained earnings 24,913 28,429
------------ ------------
Total stockholders' equity 96,848 101,287
------------ ------------
Total liabilities and stockholders'
equity $ 133,123 140,200
============ ============
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands)
(unaudited)
Three months ended
--------------------
March 27, March 26,
2005 2006
--------- ---------
Cash flows from operating activities:
Net earnings $ 2,451 3,516
Adjustments to reconcile net earnings to cash
provided by operations:
Depreciation 2,675 3,330
Amortization 5 37
Loss on disposals 18 210
Deferred lease credits (61) 87
Deferred income taxes 190 (1,250)
Stock-based compensation 523 856
Excess tax benefit from the exercise of stock
options -- (83)
Change in operating assets and liabilities:
Accounts receivable (981) (1,474)
Inventory (53) (65)
Prepaid expenses 298 482
Other assets (22) (6)
Unearned franchise fees (159) 190
Accounts payable (1,420) 877
Income taxes 1,003 2,756
Accrued expenses (1,758) (68)
--------- ---------
Net cash provided by operating activities 2,709 9,395
--------- ---------
Cash flows from investing activities:
Acquisition of property and equipment (2,662) (4,686)
Purchase of marketable securities (20,587) (24,530)
Proceeds of marketable securities 14,430 22,874
--------- ---------
Net cash used in investing activities (8,819) (6,342)
--------- ---------
Cash flows from financing activities:
Issuance of common stock 286 93
Tax payments for restricted stock (326) (687)
Excess tax benefit from the exercise of stock
options -- 83
--------- ---------
Net cash used in financing activities (40) (511)
--------- ---------
Net increase (decrease) in cash and cash
equivalents (6,150) 2,542
Cash and cash equivalents at beginning of period 12,557 3,986
--------- ---------
Cash and cash equivalents at end of period $ 6,407 6,528
========= =========
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
Supplemental Information
Restaurant Count
Company-owned Restaurants:
Q1 Q2 Q3 Q4
-- -- -- --
2006 124
2005 106 110 116 122
2004 88 92 97 103
2003 73 74 77 84
2002 56 60 63 70
Franchised Restaurants:
Q1 Q2 Q3 Q4
-- -- -- --
2006 260
2005 212 224 234 248
2004 168 175 189 203
2003 131 138 142 161
2002 108 119 123 129
Quarterly Same-Store Sales
Company-owned Restaurants:
Q1 Q2 Q3 Q4 Year
-- -- -- -- ----
2006 7.7%
2005 6.1% 2.7% 1.8% 2.5% 3.2%
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%
Franchised Restaurants:
Q1 Q2 Q3 Q4 Year
-- -- -- -- ----
2006 6.7%
2005 3.2% 1.8% 1.1% 2.6% 2.2%
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%
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
Supplemental Information
Average Weekly Sales Volumes
Company-owned Restaurants:
Q1 Q2 Q3 Q4 Year
-- -- -- -- ----
2006 $35,857
2005 33,195 $30,531 $31,361 $33,953 $32,304
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
Franchised Restaurants:
Q1 Q2 Q3 Q4 Year
-- -- -- -- ----
2006 $44,342
2005 41,309 $39,824 $40,149 $42,533 $40,999
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
Average Quarterly Wing Prices Per Pound
Q1 Q2 Q3 Q4 Year
-- -- -- -- ----
2006 $1.24
2005 1.45 $1.14 $1.08 $1.17 $1.20
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
CONTACT: Buffalo Wild Wings, Inc., Minneapolis
Investor Relations Contact:
Mary Twinem, 952-253-0731