Exhibit 99.1
Buffalo Wild Wings, Inc. Announces Third Quarter 2007 Results
Same-store sales increases of 8.3% at company-owned and 5.9% at
franchised restaurants;
Earnings per diluted share of $0.24
MINNEAPOLIS--(BUSINESS WIRE)--Oct. 30, 2007--Buffalo Wild Wings,
Inc. (Nasdaq:BWLD) announced today financial results for the third
quarter ended September 30, 2007. Highlights for the third quarter
versus the same period a year ago were:
-- Total revenue increased 20.5% to $82.4 million
-- Company-owned restaurant sales grew 20.5% to $73.3 million
-- Same-store sales increased 8.3% at company-owned restaurants
and 5.9% at franchised restaurants
-- Earnings per diluted share increased 20% to $0.24 from $0.20
Sally Smith, President and Chief Executive Officer, commented,
"Same-store sales remained strong, at 8.3% for company-owned and 5.9%
for franchised restaurants, critical in delivering a 20.5% increase in
total revenue. Average weekly sales for company-owned restaurants grew
by 8.8% and for franchised locations by 6.8%, demonstrating the
strength of our new restaurant openings. Earnings per diluted share in
the third quarter increased 20% over the prior year to $0.24, and
year-to-date earnings per diluted share continue to outpace our annual
target of 25% growth."
Total revenue, which includes company-owned restaurant sales and
franchise royalties and fees, increased 20.5% to $82.4 million in the
third quarter compared to $68.3 million in the third quarter of 2006.
Company-owned restaurant sales for the quarter increased 20.5% to
$73.3 million driven by a company-owned same-store sales increase of
8.3% and 14 more company-owned restaurants in operation at the end of
third quarter 2007 relative to the same period in 2006. Franchise
royalties and fees increased 20.4% to $9.1 million versus $7.5 million
in the prior year. This increase was due to a franchised same-store
sales increase of 5.9% and 35 more franchised restaurants at the end
of the period versus a year ago.
Average weekly sales for company-owned restaurants were $38,498
for the third quarter of 2007 compared to $35,380 for the same quarter
last year, an 8.8% increase. Franchised restaurants averaged $45,879
for the period versus $42,963 in the third quarter a year ago, a 6.8%
increase.
For the third quarter, earnings per diluted share were $0.24, as
compared to third quarter 2006 earnings per diluted share of $0.20.
2007 and 2008 Outlook
Ms. Smith continued, "In May, we announced that we had exercised
the right of first refusal to acquire nine Buffalo Wild Wings
franchised restaurants in the Las Vegas area and that the acquisition
was anticipated to close by the end of 2007. One of the conditions to
closing this transaction is obtaining gaming license approvals. This
process is taking longer than expected, and, although we cannot
determine the exact closing date, we anticipate that the transaction,
upon satisfaction of the remaining contingencies, will be completed in
2008."
In closing, Ms. Smith stated, "Fourth quarter is filled with the
excitement of new restaurant openings, with seven locations already
opened and twenty-seven additional locations expected to open before
year-end. We had our first-ever national cable and network media buy
in October, and with strong sales and a diligent focus on operations
and guest hospitality, we are committed to achieving our annual growth
targets for 2007, and also for 2008, of 15% unit growth, 20% revenue
growth, and 25% earnings growth."
Buffalo Wild Wings will be hosting a conference call today,
October 30, 2007 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 November 6, 2007. To
access this replay, please dial 1.973.341.3080, password 9333440.
About the Company
Buffalo Wild Wings, Inc., founded in 1982 and headquartered in
Minneapolis, Minnesota, is a growing owner, operator and franchisor of
restaurants featuring a variety of boldly-flavored, made-to-order menu
items including Buffalo-style chicken wings spun in one of 14
signature sauces. Buffalo Wild Wings is an inviting neighborhood
destination with widespread appeal and is the recipient of dozens of
"Best Wings" and "Best Sports Bar" awards from across the country.
There are currently over 465 Buffalo Wild Wings locations across 37
states.
Forward-looking Statements
Certain statements in this release that are not historical facts,
including, without limitation, those relating to our anticipated Las
Vegas restaurant acquisition, our expected store openings prior to
year-end and our expectations to meet our 2007 growth goals, 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 timing of obtaining the requisite regulatory
approvals and completing other contingencies necessary to consummate
the Las Vegas acquisition, the outcome and impact of the Las Vegas
acquisition, the actual number of locations opening in the future, the
sales at these and our other company-owned and franchised locations,
our ability to successfully operate in new markets, the cost of fresh
chicken wings, the success of our marketing initiatives, our ability
to control restaurant labor and 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
--------------------------- ---------------------------
September 30, September 24, September 30, September 24,
2007 2006 2007 2006
------------- ------------- ------------- -------------
Revenue:
Restaurant
sales $ 73,280 60,800 211,874 172,928
Franchise
royalties
and fees 9,086 7,548 26,393 21,941
------------- ------------- ------------- -------------
Total
revenue 82,366 68,348 238,267 194,869
------------- ------------- ------------- -------------
Costs and
expenses:
Restaurant
operating
costs:
Cost of
sales 22,517 18,557 65,166 53,590
Labor 22,156 18,265 64,313 51,422
Operating 12,272 10,291 34,473 28,970
Occupancy 5,076 4,450 14,686 12,808
Depreciation 4,284 3,649 12,204 10,412
General and
adminis-
trative (1) 9,147 7,600 26,302 22,119
Preopening 988 755 2,293 2,276
Loss on
equipment
disposal 306 102 538 356
------------- ------------- ------------- -------------
Total
costs and
expenses 76,746 63,669 219,975 181,953
------------- ------------- ------------- -------------
Income from
operations 5,620 4,679 18,292 12,916
Interest
income 768 556 2,223 1,526
------------- ------------- ------------- -------------
Earnings
before income
taxes 6,388 5,235 20,515 14,442
Income tax
expense 2,121 1,709 6,866 4,968
------------- ------------- ------------- -------------
Net earnings $ 4,267 3,526 13,649 9,474
============= ============= ============= =============
Earnings per
common share
- basic $ 0.24 0.21 0.78 0.55
Earnings per
common share
- diluted 0.24 0.20 0.77 0.54
Weighted
average
shares
outstanding -
basic 17,596,959 17,195,836 17,535,019 17,123,534
Weighted
average
shares
outstanding -
diluted 17,767,171 17,524,158 17,732,951 17,503,676
(1) Contains stock-based compensation of $715, $669, $3,047, and
$2,208, respectively
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
--------------------------- ---------------------------
September 30, September 24, September 30, September 24,
2007 2006 2007 2006
------------- ------------- ------------- -------------
Revenue:
Restaurant
sales 89.0% 89.0% 88.9% 88.7%
Franchising
royalties
and fees 11.0 11.0 11.1 11.3
------------- ------------- ------------- -------------
Total
revenue 100.0 100.0 100.0 100.0
------------- ------------- ------------- -------------
Costs and
expenses:
Restaurant
operating
costs:
Cost of
sales 30.7 30.5 30.8 31.0
Labor 30.2 30.0 30.4 29.7
Operating 16.7 16.9 16.3 16.8
Occupancy 6.9 7.3 6.9 7.4
Depreciation 5.2 5.3 5.1 5.3
General and
adminis-
trative 11.1 11.1 11.0 11.4
Preopening 1.2 1.1 1.0 1.2
Loss on
equipment
disposal 0.4 0.1 0.2 0.2
------------- ------------- ------------- -------------
Total
costs and
expenses 93.2 93.2 92.3 93.4
------------- ------------- ------------- -------------
Income from
operations 6.8 6.8 7.7 6.6
Interest
income 0.9 0.8 0.9 0.8
------------- ------------- ------------- -------------
Earnings
before income
taxes 7.8 7.7 8.6 7.4
Income tax
expense 2.6 2.5 2.9 2.5
------------- ------------- ------------- -------------
Net earnings 5.2 5.2 5.7 4.9
============= ============= ============= =============
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands)
(unaudited)
September 30, December 31,
2007 2006
------------- ------------
Assets
Current assets:
Cash and cash equivalents $ 5,324 11,756
Marketable securities 66,688 52,829
Accounts receivable - franchisees, net
of allowance of $25 and $47,
respectively 911 929
Accounts receivable - other 5,286 5,212
Inventory 2,142 1,767
Income tax receivable 1,095 --
Prepaid expenses 2,912 1,052
Deferred income taxes 2,434 1,405
------------- ------------
Total current assets 86,792 74,950
Property and equipment, net 94,343 78,137
Restricted cash 7,808 6,007
Other assets 2,098 1,720
Goodwill 369 369
------------- ------------
Total assets $ 191,410 161,183
============= ============
Liabilities and Stockholders' Equity
Current liabilities:
Unearned franchise fees $ 2,545 2,347
Accounts payable 13,437 5,874
Income tax payable -- 264
Accrued compensation and benefits 11,016 10,963
Accrued expenses 5,179 5,538
Current portion of deferred lease
credits -- 794
------------- ------------
Total current liabilities 32,177 25,780
Long-term liabilities:
Other liabilities 1,269 478
Marketing fund payables 7,808 6,007
Deferred income taxes 2,832 3,162
Deferred lease credits, net of current
portion 12,190 9,540
------------- ------------
Total liabilities 56,276 44,967
------------- ------------
Commitments and contingencies
Stockholders' equity:
Undesignated stock, 1,000,000 and
5,600,000 shares authorized,
respectively -- --
Common stock, no par value. Authorized
20,200,000 and 15,600,000 shares,
respectively, issued and outstanding
17,878,098 and 17,591,180,
respectively 80,299 75,030
Retained earnings 54,835 41,186
------------- ------------
Total stockholders' equity 135,134 116,216
------------- ------------
Total liabilities and
stockholders' equity $ 191,410 161,183
============= ============
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands)
(unaudited)
Nine months ended
---------------------------
September 30, September 24,
2007 2006
------------- -------------
Cash flows from operating activities:
Net earnings $ 13,649 9,474
Adjustments to reconcile net earnings
to cash provided by operations:
Depreciation 12,204 10,412
Amortization (95) (88)
Loss on equipment disposal 538 356
Deferred lease credits 2,221 185
Deferred income taxes (1,359) (2,385)
Stock-based compensation 3,047 2,208
Excess tax benefit from the
exercise of stock options (660) (185)
Change in operating assets and
liabilities:
Purchase of marketable
securities (315) (1,144)
Accounts receivable (421) (1,457)
Inventory (375) (142)
Prepaid expenses (1,860) 236
Other assets (378) (25)
Unearned franchise fees 198 154
Accounts payable 1,742 (404)
Income taxes (699) 434
Accrued expenses 2,355 2,078
------------- -------------
Net cash provided by
operating activities 29,792 19,707
------------- -------------
Cash flows from investing activities:
Acquisition of property and equipment (23,127) (16,970)
Purchase of marketable securities (128,782) (76,752)
Proceeds of marketable securities 115,333 73,269
------------- -------------
Net cash used in
investing activities (36,576) (20,453)
------------- -------------
Cash flows from financing activities:
Issuance of common stock 875 719
Tax payments for restricted stock (1,183) (687)
Excess tax benefit from the exercise
of stock options 660 185
------------- -------------
Net cash provided by
financing activities 352 217
------------- -------------
Net decrease in cash and
cash equivalents (6,432) (529)
Cash and cash equivalents at beginning of
period 11,756 3,986
------------- -------------
Cash and cash equivalents at end of period $ 5,324 3,457
============= =============
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
Supplemental Information
Restaurant Count
Company-owned Restaurants:
Q1 Q2 Q3 Q4
---------- ----------- ----------- -----------
2007 140 145 148
2006 124 129 134 139
2005 106 110 116 122
2004 88 92 97 103
2003 73 74 77 84
Franchised Restaurants:
Q1 Q2 Q3 Q4
---------- ----------- ----------- -----------
2007 299 301 313
2006 260 270 278 290
2005 212 224 234 248
2004 168 175 189 203
2003 131 138 142 161
Same-Store Sales
Company-owned Restaurants:
Q1 Q2 Q3 Q4 Year
---------- ----------- ----------- ----------- -----------
2007 8.7% 8.1% 8.3%
2006 7.7% 8.2% 11.8% 13.2% 10.4%
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%
Franchised Restaurants:
Q1 Q2 Q3 Q4 Year
---------- ----------- ----------- ----------- -----------
2007 3.3% 4.0% 5.9%
2006 6.7% 4.7% 6.4% 6.5% 6.1%
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%
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
Supplemental Information
Average Weekly Sales Volumes
Company-owned Restaurants:
Q1 Q2 Q3 Q4 Year
---------- ----------- ----------- ----------- -----------
2007 $39,254 36,655 38,498
2006 35,857 33,660 35,380 38,800 36,033
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
Franchised Restaurants:
Q1 Q2 Q3 Q4 Year
---------- ----------- ----------- ----------- -----------
2007 $46,439 43,998 45,879
2006 44,342 42,338 42,963 46,008 43,975
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
Average Wing Price Per Pound
Q1 Q2 Q3 Q4 Year
---------- ----------- ----------- ----------- -----------
2007 $1.40 1.25 1.24
2006 1.24 1.10 1.14 1.21 1.17
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
CONTACT: Buffalo Wild Wings, Inc.
Investor Relations Contact:
Mary Twinem, 952-253-0731