Buffalo Wild Wings, Inc. Announces Third Quarter Results.MINNEAPOLIS Minneapolis (mĭn'ēăp`əlĭs), city (1990 pop. 368,383), seat of Hennepin co., E Minn., at the head of navigation on the Mississippi River, at St. Anthony Falls; inc. 1856. -- Buffalo Wild Wings Buffalo Wild Wings Grill & Bar (also commonly referred to as B-Dubs) is a sports bar and restaurant franchise in the United States that is best-known for its buffalo wings. , Inc. (Nasdaq: BWLD) today announced financial results for the third quarter ended September September: see month. 26, 2004. Highlights for the third quarter were: --Total revenue increased 37.3% over prior year to $42.7 million --Company-owned restaurant sales grew 36% over prior year to $37.9 million --Third quarter system-wide same store sales Same Store Sales A statistic used in retail industry analysis. It compares sales of stores that have been open for a year or more. Notes: This statistic allows investors to determine what portion of new sales has come from sales growth and what portion from the opening of increased 7% --Earnings per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share of $0.14, which includes an impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge of $0.04 and stock-based compensation expense of $0.02 per diluted share Sally Smith, Chief Executive Officer and President, commented, "We posted an impressive same store sales gain of 7% in the current period, which is especially notable considering the 7.9% same store sales increase in the same period a year ago. In terms of profitability, we were also pleased with our performance, meeting our guidance despite a restaurant impairment charge of $508,000. We credit stronger than expected same store sales, lower than expected wing costs and a continued focus on operating efficiencies for our solid third quarter." Total revenue, which includes company-owned restaurant sales and franchise royalties Not to be confused with Royal family. Royalties (sometimes, running royalties) are usage-based payments made by one party (the "licensee") to another (the "licensor") for ongoing use of an asset, most typically an intellectual property (IP) right. and fees, increased 37.3% to $42.7 million in the third quarter compared to $31.1 million in the third quarter of 2003. System-wide same store sales increased 7% for the quarter. Company-owned restaurant sales for the quarter increased 36% to $37.9 million aided by a company-owned same store sales increase of 9.9% and 20 more company-owned locations in operation at the end of the third quarter 2004 relative to the same period in 2003. Franchise royalties and fees increased 49% to $4.8 million versus $3.2 million in the prior year. This increase was due to a franchised same store sales increase of 5.7% and 47 more franchised restaurants at the end of the period versus a year ago. Average weekly sales for company-owned restaurants were $30,983 for the third quarter of 2004 compared to $28,281 for the same quarter last year, a 9.6% increase. Franchised restaurants averaged $38,727 for the period versus $35,289 in the third quarter a year ago, a 9.7% increase. For the third quarter, earnings per diluted share were $0.14, versus $0.17 in the third quarter of 2003. During the quarter, we incurred a $508,000 non-cash impairment charge, or $0.04 per diluted share, related to the partial write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of two stores whose underlying cash flow did not support the value of the assets on our balance sheet. In addition, we incurred a compensation expense of $291,000, or $0.02 per diluted share, related to our restricted stock incentive program. Fourth Quarter 2004 Outlook "Our expectations for fourth quarter same store sales are tempered by the 10% gain which we posted in the fourth quarter last year," commented Ms. Smith. "That said, we believe that our strategic advertising and promotional activities will drive sales while building our brand in new and existing markets. We are on track to meet our 2004 development schedule, and Buffalo Wild Wings remains committed to building a national brand and creating long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. value for our shareholders." For the fourth quarter ending December December: see month. 26, 2004, our management team expects total revenue to approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. $47.5 million, including a system-wide same store sales increase of 3% to 5% and the addition of 7 new company-owned restaurants and 13 new franchised units. Our management team also believes that earnings per diluted share for the fourth quarter will range from $0.17 to $0.19. This is based on the previously mentioned revenue assumptions, average chicken wing prices for the fourth quarter of $1.40 per pound, stock-based compensation expense of $375,000 and diluted weighted average shares outstanding of 8.6 million. 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 Grill may refer to: In food:
As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See 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. We are hosting a conference call today, October October: see month. 20, 2004 at 5:00 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT 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 October 27, 2004. To access this replay, please dial (973) 341-3080, password A secret word or code used to serve as a security measure against unauthorized access to data. It is normally managed by the operating system or DBMS. However, the computer can only verify the legitimacy of the password, not the legitimacy of the user. See NCSC. 5279276. About the Company Buffalo Wild Wings, Inc., founded in 1982 and headquartered in Minneapolis, Minnesota “Minneapolis” redirects here. For other uses, see Minneapolis (disambiguation). Minneapolis (pronounced IPA: /ˌmɪniˈæpəlɪs/) is the largest city in the U.S. , is an established and growing owner, operator and franchisor of Buffalo Wild Wings Grill & Bar restaurants featuring a variety of boldly bold adj. bold·er, bold·est 1. Fearless and daring; courageous. 2. Requiring or exhibiting courage and bravery. See Synonyms at brave. 3. flavored fla·vor n. 1. Distinctive taste; savor: a flavor of smoke in bacon. See Synonyms at taste. 2. , made-to-order made-to-or·der adj. 1. Made in accordance with particular instructions or requirements; custom-made. 2. Very suitable: a made-to-order job. Adj. 1. menu items including Buffalo, New York-style chicken wings Chicken Wings can refer to:
Forward-looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Certain statements in this release that are not historical facts, including, without limitation, those relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc our anticipated financial performance and expected store openings for the fourth quarter of 2004, 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 of 2004, the sales at these and our other company-owned and franchised locations, the cost of wings, the success of our marketing initiatives, our ability to control other restaurant operating costs operating costs npl → gastos mpl operacionales and other factors disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). 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 28, Sept 26, Sept 28, Sept 26,
2003 2004 2003 2004
---------- ---------- ---------- ----------
Revenue:
Restaurant sales $ 27,876 37,900 80,437 109,117
Franchise royalties and
fees 3,223 4,807 9,331 13,325
---------- ---------- ---------- ----------
Total revenue 31,099 42,707 89,768 122,442
---------- ---------- ---------- ----------
Costs and expenses:
Restaurant operating
costs:
Cost of sales 8,701 12,755 24,916 37,524
Labor 8,135 11,203 23,572 31,257
Operating 4,349 5,925 12,570 16,705
Occupancy 1,906 2,719 5,627 7,594
Depreciation 1,744 2,245 5,124 6,434
General and
administrative 4,209 5,009 12,088 13,632
Preopening 223 585 579 1,379
Restaurant closures and
impairment 16 508 738 547
---------- ---------- ---------- ----------
Total costs and
expenses 29,283 40,949 85,214 115,072
---------- ---------- ---------- ----------
Income from operations 1,816 1,758 4,554 7,370
---------- ---------- ---------- ----------
Other income (expense):
Interest expense (247) -- (768) --
Interest income 21 174 53 462
---------- ---------- ---------- ----------
(226) 174 (715) 462
---------- ---------- ---------- ----------
Earnings before income
taxes 1,590 1,932 3,839 7,832
Income tax expense 620 753 1,497 3,055
---------- ---------- ---------- ----------
Net earnings 970 1,179 2,342 4,777
Accretion resulting from
cumulative dividend and
mandatory redemption
feature of preferred
Stock 402 -- 1,205 --
---------- ---------- ---------- ----------
Net earnings available
to common
stockholders $ 568 1,179 1,137 4,777
========== ========== ========== ==========
Earnings per common
share--basic $ 0.21 0.14 0.43 0.59
Earnings per common
share--diluted 0.17 0.14 0.35 0.56
Weighted average shares
outstanding --basic 2,754,716 8,253,186 2,671,497 8,114,078
Weighted average shares
outstanding --diluted 3,379,255 8,599,355 3,295,605 8,576,845
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 28, Sept 26, Sept 28, Sept 26,
2003 2004 2003 2004
-------- -------- -------- --------
Revenue:
Restaurant sales 89.6 % 88.7 % 89.6 % 89.1 %
Franchise royalties and fees 10.4 11.3 10.4 10.9
-------- -------- -------- --------
Total revenue 100.0 100.0 100.0 100.0
-------- -------- -------- --------
Costs and expenses:
Restaurant operating costs:
Cost of sales 31.2 33.7 31.0 34.4
Labor 29.2 29.6 29.3 28.6
Operating 15.6 15.6 15.6 15.3
Occupancy 6.8 7.2 7.0 7.0
Depreciation 5.6 5.3 5.7 5.3
General and administrative 13.5 11.7 13.5 11.1
Preopening 0.7 1.4 0.6 1.1
Restaurant closures and
impairment 0.1 1.2 0.8 0.4
-------- -------- -------- --------
Total costs and expenses 94.2 95.9 94.9 94.0
-------- -------- -------- --------
Income from operations 5.8 % 4.1 % 5.1 % 6.0 %
-------- -------- -------- --------
Other income (expense):
Interest expense (0.8)% 0.0 % (0.9)% 0.0 %
Interest income 0.1 0.4 0.1 0.4
-------- -------- -------- --------
(0.7) 0.4 (0.8) 0.4
-------- -------- -------- --------
Earnings before income taxes 5.1 4.5 4.3 6.4
Income tax expense 2.0 1.8 1.7 2.5
-------- -------- -------- --------
Net earnings 3.1 2.8 2.6 3.9
Accretion resulting from
cumulative dividend and mandatory
redemption feature of preferred
Stock 1.3 0.0 1.3 0.0
-------- -------- -------- --------
Net earnings available to
common stockholders 1.8 % 2.8 % 1.3 % 3.9 %
======== ======== ======== ========
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except share data)
(unaudited)
Dec 28, Sept 26,
2003 2004
-------- --------
Assets
Current assets:
Cash and cash equivalents $ 49,538 30,024
Marketable securities -- 18,454
Accounts receivable--franchisees, net of
allowance of $25 694 767
Accounts receivable--other 1,634 1,968
Inventory 978 1,101
Income taxes receivable 367 738
Prepaid expenses 1,230 574
Deferred income taxes 1,222 913
-------- --------
Total current assets 55,663 54,539
Property and equipment, net 44,450 52,684
Restricted cash 2,425 2,207
Other assets 702 747
Goodwill 759 759
-------- --------
Total assets $103,999 110,936
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Unearned franchise fees $ 1,959 2,126
Accounts payable 4,941 4,990
Accrued compensation and benefits 4,670 5,262
Accrued expenses 3,580 3,083
Current portion of deferred lease credits 491 417
-------- --------
Total current liabilities 15,641 15,878
Long-term liabilities:
Marketing fund payables 2,425 2,207
Deferred income taxes 4,733 5,500
Deferred lease credits, net of current portion 6,133 6,006
-------- --------
Total liabilities 28,932 29,591
Commitments and contingencies (note 6)
Common stockholders' equity:
Undesignated stock, 5,600,000 shares authorized -- --
Common stock, no par value. Authorized 15,600,000
shares; issued and outstanding 7,981,945 and
8,299,848, respectively 66,235 69,513
Deferred compensation -- (1,777)
Retained earnings 8,832 13,609
-------- --------
Total common stockholders' equity 75,067 81,345
-------- --------
Total liabilities and stockholders' equity $103,999 110,936
======== ========
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands)
(unaudited)
Nine months ended
-----------------
Sept 28, Sept 26,
2003 2004
-------- --------
Cash flows from operating activities:
Net earnings $ 2,342 4,777
Adjustments to reconcile net earnings to cash
provided by operations:
Depreciation 5,124 6,434
Amortization -- 165
Restaurant closures and impairment 738 547
Deferred lease credits (154) (807)
Deferred income taxes 74 1,076
Stock-based compensation 23 291
Change in operating assets and liabilities:
Accounts receivable 2,938 (615)
Inventory (123) (123)
Prepaid expenses (740) 656
Other assets 22 (35)
Unearned franchise fees 559 167
Accounts payable (1,699) 49
Income taxes 1,599 (371)
Accrued expenses (31) 95
------- --------
Net cash provided by operating
activities 10,672 12,306
------- --------
Cash flows from investing activities:
Acquisition of property and equipment (6,688) (15,225)
Purchase of marketable securities -- (24,654)
Proceeds from marketable securities -- 6,035
------- --------
Net cash used in investing
activities (6,688) (33,844)
------- --------
Cash flows from financing activities:
Issuance of common stock 527 1,210
Payments on notes payable (151) --
Payments on capital lease obligations (3,221) --
Proceeds from lessors 773 814
------- --------
Net cash provided by (used in)
financing activities (2,072) 2,024
------- --------
Net increase (decrease) in cash and
cash equivalents 1,912 (19,514)
Cash and cash equivalents at beginning of period 4,652 49,538
------- --------
Cash and cash equivalents at end of period $ 6,564 30,024
======= ========
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
Supplemental Information
Restaurant Count
Company-owned Restaurants:
Q1 Q2 Q3 Q4
-- -- -- --
2004 88 92 97
2003 73 74 77 84
2002 56 60 63 70
2001 45 47 48 53
2000 29 33 39 42
Franchised Restaurants:
Q1 Q2 Q3 Q4
-- -- -- --
2004 168 175 189
2003 131 138 142 161
2002 108 119 123 129
2001 95 97 100 105
2000 85 87 89 95
System-wide Restaurants:
Q1 Q2 Q3 Q4
-- -- -- --
2004 256 267 286
2003 204 212 219 245
2002 164 179 186 199
2001 140 144 148 158
2000 114 120 128 137
Quarterly Same Store Sales
Company-owned Restaurants:
Q1 Q2 Q3 Q4 Year
-- -- -- -- ----
2004 11.1% 10.6% 9.9%
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%
2000 11.1% 13.2% 12.6% 8.2% 11.0%
Franchised Restaurants:
Q1 Q2 Q3 Q4 Year
-- -- -- -- ----
2004 12.0% 10.4% 5.7%
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%
2000 7.8% 6.0% 6.1% 3.0% 5.6%
System-wide Restaurants:
Q1 Q2 Q3 Q4 Year
-- -- -- -- ----
2004 11.8% 10.4% 7.0%
2003 (0.7%) 2.4% 7.9% 10.0% 5.2%
2002 4.7% 4.5% (0.2%) (1.8%) 1.6%
2001 5.4% 4.5% 5.6% 9.4% 6.4%
2000 8.4% 7.4% 7.6% 4.2% 6.8%
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
Supplemental Information
Average Weekly Sales Volumes
Company-owned Restaurants:
Q1 Q2 Q3 Q4 Year
-- -- -- -- ----
2004 $32,289 30,184 30,983
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
2000 28,183 25,144 25,498 26,287 26,227
Franchised Restaurants:
Q1 Q2 Q3 Q4 Year
-- -- -- -- ----
2004 $39,678 38,072 38,727
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
2000 28,546 27,303 28,388 29,951 28,569
System-wide Restaurants:
Q1 Q2 Q3 Q4 Year
-- -- -- -- ----
2004 $37,124 35,297 36,028
2003 32,093 31,154 32,779 36,223 33,134
2002 31,781 29,829 29,651 32,124 30,850
2001 29,639 27,774 28,788 32,007 29,583
2000 28,454 26,717 27,544 28,799 27,904
Average Quarterly Wing Prices Per Pound
Q1 Q2 Q3 Q4 Year
-- -- -- -- ----
2004 $1.49 1.46 1.35
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
2000 .87 .79 .86 1.00 .89
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