Buffalo Wild Wings
Apr 28, 2015

Buffalo Wild Wings, Inc. Announces First Quarter Earnings per Share of $1.52

MINNEAPOLIS, April 28, 2015 (GLOBE NEWSWIRE) -- Buffalo Wild Wings, Inc. (Nasdaq:BWLD) announced today financial results for the first quarter ended March 29, 2015. Highlights for the first quarter versus the same period a year ago were:

Sally Smith, President and Chief Executive Officer, commented, "We're pleased with our first quarter same-store sales of 7.0% at company-owned restaurants and 6.0% at franchised locations. Sales were exceptionally strong during the college football bowl games as well as the NFL playoffs. Buffalo Wild Wings really came alive during March Madness® and we launched a new advertising campaign with unique commercials for each round of the tournament."

Ms. Smith continued, "Our sales growth leveraged operating, occupancy, and general and administrative costs. As anticipated, cost of sales and labor as a percentage of restaurant sales were higher than the prior year which tempered our net earnings growth. The price per pound for traditional chicken wings increased 41% versus the prior year's unusually low price. We achieved net earnings growth of 2.6% and earnings per diluted share was $1.52 in the first quarter."

Total revenue increased 19.8% to $440.6 million in the first quarter compared to $367.9 million in the first quarter of 2014. Company-owned restaurant sales for the quarter increased 20.3% over the same period in 2014, to $415.0 million, driven by a same-store sales increase at company-owned Buffalo Wild Wings restaurants of 7.0% and 53 additional Buffalo Wild Wings restaurants at the end of first quarter of 2015. Franchise royalties and fees increased 11.8% to $25.6 million for the quarter versus $22.9 million in the first quarter of 2014. This increase is attributed to a same-store sales increase at franchised Buffalo Wild Wings locations of 6.0% and 18 additional franchised Buffalo Wild Wings restaurants at the end of the period versus a year ago.

Average weekly sales for company-owned Buffalo Wild Wings restaurants were $64,851 for the first quarter of 2015 compared to $60,966 for the same quarter last year, a 6.4% increase. Franchised Buffalo Wild Wings restaurants in the United States averaged $67,075 for the period versus $63,852 in the first quarter a year ago, a 5.0% increase.

For the first quarter, net earnings increased 2.6% to $29.1 million versus $28.3 million in the first quarter of 2014. Earnings per diluted share were $1.52, as compared to first quarter 2014 earnings per diluted share of $1.49.

2015 Outlook

Ms. Smith remarked, "Same-store sales increased 4.2% at company-owned restaurants and 1.8% at franchised locations for the first four weeks of the second quarter of 2015 compared to 5.7% and 4.4%, respectively, for the same period last year. We launched B-Dubs® Fast Break, a system-wide lunch program that provides Guests speed and value during this daypart. We're bringing the World of Sports to Buffalo Wild Wings beginning in June, highlighting fun and unique sports from the U.S. and around the world. To further engage Guests, we'll have new in-restaurant games to play during the World of Sports promotion with prizes awarded daily and weekly."

Ms. Smith concluded, "Our focus remains on creating an engaging sports-viewing experience with great food and beverage offerings for our Guests and we continue to make progress in guest experience technology initiatives. Our net earnings growth goal for 2015 remains 18%."

Buffalo Wild Wings will be hosting a conference call today, April 28, 2015 at 4:00 p.m. Central Daylight Time to discuss these results. There will be a simultaneous webcast conducted at our investor website IR.BuffaloWildWings.com.

A replay of the call will be available until May 5, 2015. To access this replay, please dial 1.858.384.5517 password 5135891.

March Madness® is a trademark of the National Collegiate Athletic Association.

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® 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™ to Blazin'®. 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 1,080 Buffalo Wild Wings locations in the United States, Canada, Mexico, and Philippines.

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.

Forward-looking Statements

Various remarks we make about future expectations, plans, and prospects for the company constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. These statements relate to our future financial and restaurant performance measures and growth goals, including but not limited to those relating to our second quarter sales trends and projected unit and net earnings growth rates for 2015, and beyond. All statements other than statements of historical fact are statements that could be deemed forward-looking statements and are based upon the current beliefs and expectations of our management. We have attempted to identify forward-looking statements by terminology, including "anticipates," "believes," "can," "continue," "could," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," "should" or "will" or the negative of these terms or other comparable terminology. Actual results may vary materially from those contained in forward-looking statements based on a number of factors, including, but not limited to, our ability to achieve and manage our planned expansion, the ability of our franchisees to open and manage new restaurants, market acceptance in the new geographic regions we enter (particularly non-U.S. locations), success of acquired restaurants, success of investments in new or emerging concepts, unforeseen obstacles in developing nontraditional sites or non-U.S. locations, our ability to obtain and maintain licenses and permits necessary to operate our existing and new restaurants, our franchisees' adherence to our system standards, the cost of commodities such as traditional chicken wings and supply chain consistency, the success of our key initiatives and our advertising and marketing campaigns, our ability to control restaurant labor and other restaurant operating costs, the continued service of key management personnel, our ability to protect our name and logo and other proprietary information, economic conditions (including changes in consumer preferences or consumer discretionary spending), the impact of federal, state or local government regulations relating to our employees, the sale of food and alcoholic beverages, the effect of competition in the restaurant industry, and other factors disclosed from time to time in our filings with the U.S. Securities and Exchange Commission, 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 28, 2014, as updated in subsequent reports filed with the SEC. 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 and share amounts in thousands except per share data)
(unaudited)
     
  Three months ended
  March 29, March 30,
  2015 2014
Revenue:    
Restaurant sales  $ 414,972  344,945
Franchise royalties and fees 25,614 22,910
Total revenue 440,586 367,855
Costs and expenses:    
Restaurant operating costs:    
Cost of sales 125,677 97,487
Labor 130,394 105,334
Operating 58,551 49,038
Occupancy 21,990 18,969
Depreciation and amortization 28,069 22,832
General and administrative 30,522 28,156
Preopening 1,270 2,578
Loss on asset disposals and impairment 605 787
Total costs and expenses 397,078 325,181
Income from operations 43,508 42,674
Investment income (loss) (75) (127)
Earnings before income taxes 43,433 42,547
Income tax expense 14,448 14,231
Net earnings including noncontrolling interests 28,985 28,316
Net loss attributable to noncontrolling interests (78)
Net earnings attributable to Buffalo Wild Wings  $ 29,063  28,316
Earnings per common share - basic  $ 1.53  1.50
Earnings per common share - diluted  $ 1.52  1.49
Weighted average shares outstanding - basic 18,993 18,873
Weighted average shares outstanding - diluted 19,074 18,953

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 29,
 2015
March 30,
 2014
Revenue:    
Restaurant sales 94.2% 93.8%
Franchise royalties and fees 5.8 6.2
Total revenue 100.0 100.0
Costs and expenses:    
Restaurant operating costs:    
Cost of sales 30.3 28.3
Labor 31.4 30.5
Operating 14.1 14.2
Occupancy 5.3 5.5
Depreciation and amortization 6.4 6.2
General and administrative 6.9 7.7
Preopening 0.3 0.7
Loss on asset disposals and impairment 0.1 0.2
Total costs and expenses 90.1 88.4
Income from operations 9.9 11.6
Investment income (loss)
Earnings before income taxes 9.9 11.6
Income tax expense 3.3 3.9
Net earnings including noncontrolling interests 6.6 7.7
Net loss attributable to noncontrolling interests
Net earnings attributable to Buffalo Wild Wings 6.6% 7.7%
 
 
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands)
(unaudited)
     
  March 29, December 28,
  2015 2014
Assets    
Current assets:    
Cash and cash equivalents  $ 92,601  93,329
Marketable securities 21,017 19,547
Accounts receivable, net of allowance of $25 30,393 28,322
Inventory 11,550 11,893
Prepaid expenses 9,817 4,215
Refundable income taxes 9,779
Deferred income taxes 16,435 15,807
Restricted assets 55,439 81,037
Total current assets 237,252 263,929
     
Property and equipment, net 494,866 494,401
Reacquired franchise rights, net 41,777 37,631
Other assets 19,237 19,399
Goodwill 40,625 38,106
Total assets  $ 833,757  853,466
     
Liabilities and Stockholders' Equity    
Current liabilities:    
Unearned franchise fees  $ 2,461  2,099
Accounts payable 33,850 37,241
Accrued compensation and benefits 39,190 59,161
Accrued expenses 13,236 16,573
Income tax payable 7,951
Current portion of deferred lease credits 499 743
System-wide payables 55,125 79,668
Total current liabilities 152,312 195,485
     
Long-term liabilities:    
Other liabilities 6,420 6,388
Deferred income taxes 34,515 39,815
Deferred lease credits 38,106 37,479
Total liabilities 231,353 279,167
     
Commitments and contingencies    
Stockholders' equity:    
Undesignated stock, 1,000,000 shares authorized
Common stock, no par value. Authorized 44,000,000 shares; issued and outstanding 18,995,188 and 18,937,131, respectively 148,129 148,114
Retained earnings 456,758 427,695
Accumulated other comprehensive loss (2,991) (2,096)
Total stockholders' equity 601,896 573,713
Noncontrolling interests 508 586
Total equity 602,404 574,299
Total liabilities and equity  $ 833,757  $ 853,466
 
 
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands)
(unaudited)
     
  Three months ended
  March 29, March 30,
  2015 2014
Cash flows from operating activities:    
Net earnings including noncontrolling interests  $ 28,985   28,316
Adjustments to reconcile net earnings to net cash provided by operations:    
Depreciation 26,851 21,699
Amortization 1,218 1,133
Loss on asset disposals and impairment 605 787
Deferred lease credits 1,159 998
Deferred income taxes (5,508) (6,892)
Stock-based compensation 2,745 3,615
Excess tax benefit from stock issuance (66) (29)
Change in operating assets and liabilities, net of effect of acquisitions:    
Trading securities (328) (90)
Accounts receivable (2,053) (3,403)
Inventory 471 (859)
Prepaid expenses (5,619) (2,423)
Other assets 154 121
Unearned franchise fees 362 (126)
Accounts payable (1,037) (4,211)
Income taxes 17,796 19,872
Accrued expenses (18,374) (10,414)
Net cash provided by operating activities 47,361 48,094
Cash flows from investing activities:    
Acquisition of property and equipment (25,788) (25,732)
Acquisition of businesses (13,894)
Purchase of marketable securities (12,297)
Proceeds from marketable securities 11,155
Net cash used in investing activities (40,824) (25,732)
Cash flows from financing activities:    
Issuance of common stock 231 244
Excess tax benefit from stock issuance 66 29
Tax payments for restricted stock units (7,627) (7,474)
Net cash used in financing activities (7,330) (7,201)
Effect of exchange rate changes on cash and cash equivalents 65 (115)
Net increase (decrease) in cash and cash equivalents (728) 15,046
Cash and cash equivalents at beginning of period 93,329 57,502
Cash and cash equivalents at end of period  $ 92,601   72,548
 
 
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
Supplemental Information
         
Restaurant Count
 
Company-owned Restaurants (includes Buffalo Wild Wings, Rusty Taco, and Buffalo Wild Wings-owned PizzaRev locations):
         
  Q1 Q2 Q3 Q4
2015 501      
2014 443 449 463 491
2013 397 407 415 434
2012 327 330 343 381
2011 263 277 288 319
         
Franchised Restaurants (includes Buffalo Wild Wings and Rusty Taco locations):
         
  Q1 Q2 Q3 Q4
2015 593      
2014 569 579 588 591
2013 514 525 534 559
2012 505 505 511 510
2011 488 492 498 498
 
Same-Store Sales at Buffalo Wild Wings locations in United States and Canada
 
Company-owned Restaurants:
           
  Q1 Q2 Q3 Q4 Year
2015 7.0%        
2014 6.6% 7.7% 6.0% 5.9% 6.5%
2013 1.4% 3.8% 4.8% 5.2% 3.9%
2012 9.2% 5.3% 6.2% 5.8% 6.6%
2011 3.9% 5.9% 5.7% 8.9% 6.1%
           
Franchised Restaurants:
           
  Q1 Q2 Q3 Q4 Year
2015 6.0%        
2014 5.0% 6.5% 5.7% 5.1% 5.6%
2013 2.2% 4.1% 3.9% 3.1% 3.3%
2012 7.3% 5.5% 5.8% 7.4% 6.5%
2011 1.6% 2.7% 4.2% 5.9% 3.6%
 
 
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
Supplemental Information
           
Average Weekly Sales Volumes at Buffalo Wild Wings locations in United States and Canada
           
Company-owned Restaurants:
           
  Q1 Q2 Q3 Q4 Year
2015 $ 64,851        
2014 60,966 59,403 59,643 62,119 60,470
2013 56,953 54,759 55,592 58,204 56,392
2012 55,131 51,524 52,561 55,595 53,783
2011 48,845 47,970 49,461 51,983 49,627
           
Franchised Restaurants:
           
  Q1 Q2 Q3 Q4 Year
2015 $ 67,075        
2014 63,852 61,845 61,586 63,949 62,595
2013 60,050 58,186 58,926 61,167 59,594
2012 57,282 54,766 55,608 58,490 56,570
2011 52,744 50,995 51,350 53,385 52,081
CONTACT: Investor Relations Contact:

         Heather Pribyl

         952.253.0731
Source: Buffalo Wild Wings, Inc.

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