Buffalo Wild Wings 2007 Annual Report Download - page 28

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28
In December 2007, the FASB issued SFAS No. 141R, “Business Combinations.” SFAS No. 141R provides companies
with principles and requirements on how an acquirer recognizes and measures in its financial statements the identifiable
assets acquired, liabilities assumed, and any noncontrolling interest in the acquiree as well as the recognition and
measurement of goodwill acquired in a business combination. SFAS No. 141R also requires certain disclosures to enable
users of the financial statements to evaluate the nature and financial effects of the business combination. Acquisition costs
associated with the business combination will generally be expensed as incurred. SFAS No. 141R is effective for business
combinations occurring in fiscal years beginning after December 15, 2008. Early adoption of SFAS No. 141R is not
permitted. We are currently evaluating the impact SFAS No. 141R will have on any future business combinations.
Impact of Inflation
In the last three years we have not operated in a period of high general inflation; however, the cost of chicken wings,
labor and certain utilities have generally increased. Our restaurant operations are subject to federal and state minimum wage
laws governing such matters as working conditions, overtime and tip credits. Significant numbers of our food service and
preparation personnel are paid at rates related to the federal and/or state minimum wage and, accordingly, increases in the
minimum wage have increased our labor costs in the last three years. In addition, costs associated with our operating leases,
such as taxes, maintenance, repairs and insurance, are often subject to upward pressure. To the extent permitted by
competition, we have mitigated increased costs by increasing menu prices and may continue to do so if deemed necessary in
future years.
Quarterly Results of Operations
The following table sets forth, by quarter, the unaudited quarterly results of operations for the two most recent years, as
well as the same data expressed as a percentage of our total revenue for the periods presented. Restaurant operating costs are
expressed as a percentage of restaurant sales. The information for each quarter is unaudited and we have prepared it on the
same basis as the audited financial statements appearing elsewhere in this document. In the opinion of management, all
necessary adjustments, consisting only of normal recurring adjustments, have been included to present fairly the unaudited
quarterly results. All amounts, except per share amounts, are expressed in thousands.
Quarterly and annual operating results may fluctuate significantly as a result of a variety of factors, including increases
or decreases in same-store sales, changes in fresh chicken wing prices, the timing and number of new restaurant openings and
their related expenses, asset impairment charges, store closing charges, general economic conditions and seasonal
fluctuations.