Letter Highlights Strength of Board and Steps to Enhance Value
Urges Shareholders to Vote "FOR" Each of Buffalo Wild Wings'
Highly-Qualified Director Nominees on the YELLOW Proxy Card
Buffalo Wild Wings, Inc. (NASDAQ:BWLD) today mailed a letter from its
three new independent directors to shareholders in connection with the
company's upcoming 2017 Annual Meeting of Shareholders ("Annual
Meeting") to be held on June 2, 2017. The Buffalo Wild Wings Board of
Directors unanimously recommends that shareholders vote the YELLOW proxy
card "FOR" the election of all nine of the Board's experienced
and highly-qualified director nominees: Cynthia L. Davis, Andre J.
Fernandez, Janice L. Fields, Harry A. Lawton, J. Oliver Maggard, Jerry
R. Rose, Sam B. Rovit, Harmit J. Singh and Sally J. Smith.
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All materials regarding the Board's recommendation can be found at ir.buffalowildwings.com.
The full text of the letter follows:
VOTE THE ENCLOSED YELLOW PROXY CARD TODAY
ALL OF BUFFALO WILD WINGS' HIGHLY-QUALIFIED DIRECTOR NOMINEES
May 2, 2017
Dear Fellow Shareholder:
We are writing as members of the Buffalo Wild Wings Board of Directors
to share our views of Buffalo Wild Wings and to reiterate the full Board
of Directors' unanimous recommendation for how you should vote at the
upcoming 2017 Annual Meeting of Shareholders, to be held on June 2, 2017.
We are the three newest independent directors on the Board of Buffalo
Over our careers, we have all served in senior managerial positions at
some of the world's most respected multinational public corporations.
Currently, Andre is the President and Chief Executive Officer of CBS
Radio, Hal is the Senior Vice President for North America for eBay and
Harmit is the Executive Vice President and CFO of Levi Strauss & Co.
BUFFALO WILD WINGS HAS THE RIGHT BOARD SLATE
We joined the Board in October 2016 as part of a proactive Board
refreshment program and a renewed focus on improving the business amid
stiff industry headwinds. Since then, we have been enormously impressed
with the dedication and efforts of our fellow directors and the
leadership. Over the last six months, we have also worked as a Board
with management to refine the future vision to adapt to the changing
industry landscape. We are proud to be on a well-balanced Board of
Directors with deep expertise in restaurants, food service, franchising,
retail operations and capital allocation.
Buffalo Wild Wings has been extremely successful over its life as a
public company, generating annualized returns of approximately 24% for
shareholders and outperforming its casual dining peers on important
metrics, including customer traffic, sales growth and margins, amid
changing market conditions and shifting demographics and consumer
preferences. Nevertheless, we recognize that Buffalo Wild Wings has work
to do, too.
You have our commitment that we will continue to strive for
best-in-class shareholder returns and address the challenges of the
current operating environment head-on with bold, decisive actions and a
sense of urgency. This commitment is shared by the full Board and the
We are confident that the Board and our two new nominees, Janice Fields
and Sam Rovit - both of whom bring decades of experience in restaurants
and food service - have the right mix of fresh perspective and knowledge
of the business to ensure Buffalo Wild Wings is on the best path to
create sustainable value for shareholders. Our recommended Board
candidates include a mix of tenures: four directors (including our CEO)
have served for more than one year and five directors (including the
three of us) will have served for less than one year, if we are elected.
Among the directors with longer service are Jerry Rose, our new Board
Chairman; Cindy Davis, who is Chair of our Compensation Committee; and
Ollie Maggard. All three individuals bring unique and critical
perspectives to our Board with respect to restaurant operations, retail
and consumer marketing and capital structure and capital markets. Since
we joined the Board last year, we have been impressed with the valuable
contributions of these directors and believe that their institutional
knowledge and expertise is critical for Buffalo Wild Wings' future
As you undoubtedly know by now, one of our shareholders, Marcato Capital
Management, L.P. ("Marcato"), believes you should vote to remove these
directors - that is, every one of the independent directors who has
served on the Buffalo Wild Wings Board for more than one year. And
Marcato believes our successful CEO, Sally Smith, should also be
replaced. If Marcato had its way, there would be no one in the Board
room after the Annual Meeting who has more than nine months of history
with Buffalo Wild Wings.
With long-term operational and financial performance better than or
equal to nearly all of our peers and a track record of creating
sustainable value for shareholders, we simply do not understand this
point of view. In short, as the newest members of the Buffalo Wild Wings
Board, we believe Marcato's attempt is ill-founded and would leave
our Board without essential institutional knowledge.
BUFFALO WILD WINGS' BOARD AND MANAGEMENT TEAM ARE MAKING IMPORTANT
CHANGES TO INCREASE LONG-TERM SHAREHOLDER RETURNS
The company has already undertaken significant changes in the last year.
And, while there is still work to be done, as new directors, we are
impressed by the scale and scope of these efforts to drive further
operational, strategic and managerial performance. For example:
The management team has changed. We have a new Chief Financial
Officer and a new Chief Information Officer. Our President of North
America recently announced her retirement.
New operational and organizational initiatives will drive
improved margins. We have removed two layers of field management and
have identified numerous opportunities in our restaurant operations
for improved performance. We have engaged a national consulting firm
to assist us in identifying cost savings opportunities within our
restaurants and at our home office. As a result, we expect to achieve
$40 to $50 million in annualized cost savings by year-end 2018 and
restaurant-level operating margins of 20%.
We are improving and modifying our operating strategy. In light
of the current operating environment, we have dramatically slowed the
pace of opening new domestic, full-sized restaurants and have
accelerated other strategic initiatives, such as international growth,
takeout and delivery operations and the testing of small-footprint
stores as part of a market penetration strategy.
Our capital structure has improved and we are putting our
balance sheet to work to return capital to shareholders. We announced
an expanded share repurchase program and have repurchased
approximately $470 million worth of our shares through March 26, 2017.
We will continue to buy our own stock and return capital to
shareholders as we are confident in the successful execution of our
long-term growth plans.
Adjusting our ownership mix. We are in the process of selling
approximately 13% of our owned restaurant units in order to optimize
our ownership base and operating performance.
Our Board's composition and structure has changed and we have
improved corporate governance. We announced that four longer-serving
directors have retired or will retire as of the 2017 Annual Meeting,
and we have recruited five new directors for election, including the
three of us. We also changed the Board Chairman and the Chairs of each
of our Board committees.
The company is working hard for shareholders in addressing changing
market conditions and consumer preferences. The efforts are broad-based
and comprehensive, and we can assure you that our slate of directors is
the team that will drive success and value.
CHANGING BOARD MEMBERS OR STRATEGY NOW IS RISKY AND UNNECESSARY
With substantial work underway, we do not believe now is the time to
further shift the Board's composition - emptying the Board room of all
institutional knowledge - or radically modify the company's mandate or
strategy, as Marcato would have you do. We do not believe Marcato's
suggestions - its Board candidates (other than Sam Rovit), operations or
strategy - would be effective in creating shareholder value at Buffalo
We do not believe, for example, that swapping out our longer-serving
directors for Marcato's nominees would be value enhancing for
shareholders - they do not bring any skills or experience that we do not
currently possess. We do not believe that technology choices should be
made based on what other restaurant operators - nearly all of whom we
have outperformed - decide to do. And, we do not believe that we should
shift our ownership model radically, as doing so would create
substantial risk for the enterprise with no offsetting expected value
PROTECT THE VALUE OF YOUR INVESTMENT -
VOTE THE ENCLOSED
YELLOW PROXY CARD TODAY
We believe Buffalo Wild Wings is on the right track to continue
outperforming the industry and create significant additional shareholder
value. We are committed to working with the Board and management team as
we continue to build upon our competitive advantages and further
differentiate ourselves in a changing industry landscape.
Accordingly, we strongly encourage you to vote the enclosed YELLOW
proxy card "FOR" each of Buffalo Wild Wings' nine nominees:
Cynthia L. Davis, Andre J. Fernandez, Janice L. Fields, Harry A. Lawton,
J. Oliver Maggard, Jerry R. Rose, Sam B. Rovit, Harmit J. Singh and
Sally J. Smith. You can vote today by telephone, by Internet or by
signing and dating the enclosed YELLOW proxy card and returning
it in the postage-paid envelope provided. No matter how few shares you
own, it is important that all shareholders have their voices heard in
this critically important decision regarding your investment. We further
encourage you to discard any proxy materials sent to you by Marcato.
We thank you for your continued support.
Andre J. Fernandez
/s/ Andre J. Fernandez
Harry A. Lawton III
/s/ Harry A. Lawton III
Harmit J. Singh
/s/ Harmit J. Singh
If you have any questions or require any assistance with voting your
please contact the company's proxy solicitor listed below:
MacKenzie Partners, Inc.
105 Madison Avenue
New York, New York 10016
Collect: (212) 929-5500
Lazard Ltd is serving as financial advisor and Faegre Baker Daniels is
serving as legal advisor to the company.
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(R) 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(TM) to Blazin'(R). 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 1,220 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.
Cautionary Statement Regarding Certain Information
This communication contains "forward-looking statements" within the
meaning of the federal securities laws. Such statements include
statements concerning anticipated future events and expectations that
are not historical facts. All statements other than statements of
historical fact are statement that could be deemed forward-looking
statements. Actual results may vary materially from those expressed or
implied by forward-looking statements based on a number of factors,
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 25,
2016, as updated or supplemented by subsequent reports we file with the
SEC. We do not assume any obligation to publicly update any
forward-looking statement after they are made, whether as a result of
new information, future events or otherwise.
Buffalo Wild Wings, Inc., its directors and certain of its executive
officers and employees are participants in the solicitation of proxies
from Buffalo Wild Wings shareholders in connection with its 2017 annual
meeting of shareholders to be held on June 2, 2017. Information
concerning the identity and interests of these persons is available in
the definitive proxy statement Buffalo Wild Wings filed with the SEC on
April 21, 2017.
Buffalo Wild Wings has filed a definitive proxy statement in connection
with its 2017 annual meeting. The definitive proxy statement, any
amendments thereto and any other relevant documents, and other materials
filed with the SEC concerning Buffalo Wild Wings are (or will be, when
filed) available free of charge at http://www.sec.gov
Shareholders should read carefully the definitive proxy statement and
any other relevant documents that Buffalo Wild Wings files with the SEC
when they become available before making any voting decision because
they contain important information.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170502005442/en/
Buffalo Wild Wings, Inc.
Bob Marese/Paul Schulman, 212-929-5500
Frank, Wilkinson Brimmer Katcher
Meaghan Repko / Nick Lamplough,
Source: Buffalo Wild Wings, Inc.
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