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Morningstar® Document Research℠
FORM 10-K
BUFFALO WILD WINGS INC - BWLD
Filed: February 26, 2010 (period: December 27, 2009)
Annual report which provides a comprehensive overview of the company for the past year

Table of contents

  • Page 1
    Morningstar Document Research ® ℠FORM 10-K BUFFALO WILD WINGS INC - BWLD Filed: February 26, 2010 (period: December 27, 2009) Annual report which provides a comprehensive overview of the company for the past year

  • Page 2
    ... of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. Large Accelerated Filer � Accelerated Filer ⌧ Non-Accelerated Filer � Smaller Reporting Company � Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by...

  • Page 3
    ... Exchange Act Rule 12b-2 of the Exchange Act). YES � NO ⌧ The aggregate market value of the voting stock held by non-affiliates was $573 million based on the closing sale price of the Company's Common Stock as reported on the NASDAQ Stock Market on June 26, 2009. The number of shares outstanding...

  • Page 4
    ... of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accountant Fees and Services 61 61 61 61 61 Exhibits and Financial Statement Schedules 62 63 2 Source: BUFFALO WILD WINGS INC, 10...

  • Page 5
    ... and Business Strategy Our goal is to continue to grow and develop the Buffalo Wild Wings Grill & Bar ® concept into a leading nationally and internationally recognized restaurant chain. To do so, we plan to execute the following strategies: â- Open restaurants in new and existing markets; Powered...

  • Page 6
    â- â- â- Offer boldly-flavored menu items with broad appeal; Create an inviting, neighborhood atmosphere; Continue to strengthen the Buffalo Wild Wings ® brand; 3 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar® Document Researchâ„

  • Page 7
    ..., focusing on multiple-unit area development agreements. The Buffalo Wild Wings ® Menu Our restaurants feature a variety of menu items including our Buffalo, New York-style chicken wings spun in one of our signature sauces from sweet to screamin' hot: Sweet BBQ ™, Teriyaki ™, Mild™, Parmesan...

  • Page 8
    ... 2009, we owned or franchised 652 Buffalo Wild Wings restaurants in 42 states, of which 232 were company-owned and 420 were franchised. In 2010, our goal is to achieve 13 to 15% unit growth and open a net of approximately 88 new company-owned and franchised restaurants. Our company-owned restaurants...

  • Page 9
    ... open on a daily basis from 11 a.m. to 2 a.m., although closing times vary depending on the day of the week and city and state regulations governing the sale of alcoholic beverages. Our franchise agreements require franchisees to operate their restaurants for a minimum of 12 hours a day. Site...

  • Page 10
    5 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar® Document Researchâ„

  • Page 11
    ... Control and Purchasing We strive to maintain high quality standards. Our systems are designed to protect our food supply at all times, from procurement through the preparation process. We provide detailed specifications to suppliers for our food ingredients, products and supplies. Our restaurant...

  • Page 12
    ...usage of both company-owned and franchised restaurants. We believe that competitively priced, high quality alternative manufacturers, suppliers, growers and distributors are available should the need arise. 6 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar® Document...

  • Page 13
    ...of sales and cash flow, with the introduction of new menu items, effective marketing promotions, focused efforts on food costs and waste, and menu price increases. We also explore purchasing strategies to reduce the severity of cost increases and fluctuations. We currently purchase our chicken wings...

  • Page 14
    7 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar® Document Researchâ„

  • Page 15
    ..., advertising, wholesale purchasing and inventory control. The failure of a restaurant to retain liquor or food service licenses could have a material adverse effect on our operations. In order to reduce this risk, restaurant employees are trained in standardized operating procedures designed to...

  • Page 16
    ... are based upon declarations of public policy that are concerned with, among other things: â- the prevention of unsavory or unsuitable persons from having a direct or indirect involvement with gaming at any time or in any capacity; 8 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered...

  • Page 17
    ... information regarding regulation related to gaming in our Nevada facilities can be found in Exhibit 99.1 to this Form 10-K. Employees As of December 27, 2009, we employed approximately 14,000 employees. We have 1,000 full-time and 12,800 part-time employees working in our company-owned restaurants...

  • Page 18
    ...time. Judith A. Shoulak, 50, has served as our Executive Vice President, Global Operations and Human Resources since January 2010. She served as our Senior Vice President, Operations, from March 2004 to December 2009...: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar® Document...

  • Page 19
    ... food product used by our company-owned and franchised restaurants is chicken wings. We work to counteract the effect of the volatility of chicken wing prices, which can significantly change our cost of sales and cash flow, with the introduction of new menu items, effective marketing promotions...

  • Page 20
    • Obtaining and maintaining required local, state and federal governmental approvals and permits related to the construction of the sites and the sale of food and alcoholic beverages; 10 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar® Document Researchâ„

  • Page 21
    ... awareness of the Buffalo Wild Wings ® brand. Sales at restaurants opening in new markets may take longer to reach average annual restaurant sales, if at all, thereby affecting their profitability. New restaurants added to our existing markets may take sales from existing restaurants. We and our...

  • Page 22
    ...decline in our stock price and market capitalization; a significant adverse change in legal factors or in the business climate; unanticipated competition: the testing for recoverability of a significant asset group within a reporting unit; and slower growth rates. Any adverse change in these factors...

  • Page 23
    ... and system-wide sales could significantly decline. In addition, we may also face potential claims and liabilities due to the acts of our franchisees based on agency or vicarious liability theories. 12 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar® Document...

  • Page 24
    ...-store sales; Fluctuations in food costs, particularly chicken wings; The timing of new restaurant openings, which may impact margins due to the related preopening costs and initially higher restaurant level operating expense ratios; Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered...

  • Page 25
    13 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar® Document Researchâ„

  • Page 26
    ...suspended for cause at any time. Alcoholic beverage control regulations relate to numerous aspects of the daily operations of the restaurants, including minimum age of guests and employees, hours of operation, advertising, wholesale purchasing, Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010...

  • Page 27
    ... dispensing of alcoholic beverages. If we fail to comply with federal, state or local regulations, our licenses may be revoked and we may be forced to terminate the sale of alcoholic beverages at one or more of our restaurants. 14 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by...

  • Page 28
    ... sales taxes. A number of factors could adversely affect our operating results, including additional government-imposed increases in minimum wages, overtime pay, paid leaves of absence and mandated health benefits, mandated training for employees, increased tax reporting and tax payment requirements...

  • Page 29
    Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar® Document Researchâ„

  • Page 30
    ... concerning our growth potential and future financial performance. In addition, if the securities analysts who regularly follow our stock lower their ratings of our stock, the market price of our stock is likely to drop Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar...

  • Page 31
    significantly. 16 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar® Document Researchâ„

  • Page 32
    ... in prices, our profitability may decline. In addition, the current premiums that we pay for our insurance (including workers' compensation, general liability, property, health, and directors' and officers' liability) may increase at any time, thereby further increasing our costs. The dollar amount...

  • Page 33
    ... gain control of a restaurant site in the event of default under the lease or franchise agreement. The following table sets forth the 42 states in which Buffalo Wild Wings restaurants are located and the number of restaurants in each state as of December 27, 2009: Number of Restaurants Open Company...

  • Page 34
    Texas Virginia West Virginia Wisconsin Total 31 8 - 14 232 18 42 18 7 8 420 73 26 7 22 652 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar® Document Researchâ„

  • Page 35
    ... most of these types of claims. A judgment on any claim not covered by or in excess of our insurance coverage could adversely affect our financial condition or results of operations. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable. 19 Source: BUFFALO WILD WINGS INC, 10...

  • Page 36
    ..., RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our Common Stock trades on the NASDAQ Global Market under the symbol "BWLD". The following table sets forth the high and low closing sale prices of our Common Stock. 2009 High 38.45 42.98 44.23 43.62 2008 High...

  • Page 37
    ...percentage change in the cumulative total shareholder return on our Common Stock for the five-year period ended December 27, 2009 with the cumulative total return on the Nasdaq Composite and the S&P 600 Restaurants Index. The comparison assumes $100 was invested in Buffalo Wild Wings Common Stock on...

  • Page 38
    ... Form 10-K. Fiscal Years Ended (1) Dec. 28, Dec. 30, Dec. 31, 2008 2007 2006 (in thousands, except share and per share data) Dec. 27, 2009 Consolidated Statements of Earnings Data: Revenue: Restaurant sales Franchising royalties and fees Total revenue Costs and expenses: Restaurant operating costs...

  • Page 39
    ...or 53-week accounting period that ends on the last Sunday in December. The fiscal years ended December 27, 2009, December 28, 2008, December 30, 2007, and December 25, 2005, were comprised of 52 weeks. The fiscal year ended December 31, 2006 was a 53-week year. 22 Source: BUFFALO WILD WINGS INC, 10...

  • Page 40
    ... items, effective marketing promotions, focused efforts on food costs and waste, and menu price increases. We will continue to monitor the cost of chicken wings, as it can significantly change our cost of sales and cash flow from company-owned restaurants. We are also exploring purchasing strategies...

  • Page 41
    ... where we currently have either company-owned or franchised restaurants. We believe this development focus, together with our focus on our new restaurant opening procedures, will help to mitigate the overall risk associated with opening restaurants in new markets. 23 Source: BUFFALO WILD WINGS INC...

  • Page 42
    ... total revenue in 2009. Food and nonalcoholic beverages accounted for 76% of restaurant sales. The remaining 24% of restaurant sales was from alcoholic beverages. The menu item with the highest sales volume is chicken wings at 21% of total restaurant sales. Royalties and franchise fees received from...

  • Page 43
    ... the adequacy of the estimated reserve based on current market conditions. During 2009, 2008, and 2007, we recorded reserves of $31,000, $85,000, and $85,000, respectively, for restaurants that closed. 24 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar® Document...

  • Page 44
    ...days after the end of a month for that month's purchases. During fiscal 2009, 2008, and 2007, vendor allowances were recorded as a reduction in inventoriable costs, and cost of sales was reduced by $6.0 million, $5.2 million, and $4.6 million, respectively. Revenue Recognition - Franchise Operations...

  • Page 45
    ... pricing model, which requires the input of subjective assumptions. These assumptions include the expected life of the options, expected volatility over the expected term, the risk-free interest rate, and the expected forfeitures. 25 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered...

  • Page 46
    ... sales. Fiscal Years Ended Dec. 27, Dec. 28, Dec. 30, 2009 2008 2007 Revenue: Restaurant sales Franchising royalties and fees Total revenue Costs and expenses: Restaurant operating costs: Cost of sales Labor Operating Occupancy Depreciation and amortization General and administrative Preopening Loss...

  • Page 47
    ... least fifteen months): Fiscal Years Ended Dec. 27, Dec. 28, 2009 2008 3.1% 5.9% 3.4 2.8 Company-owned same-store sales Franchised same-store sales Dec. 30, 2007 6.9% 3.9 The annual average price paid per pound for chicken wings for company-owned restaurants is as follows: Fiscal Years Ended Dec...

  • Page 48
    ... to 15.6% in 2009 from 15.9% in 2008. The decrease in operating expenses as a percentage of restaurant sales was primarily due to lower natural gas and utility costs partially offset by higher general liability insurance costs. 27 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by...

  • Page 49
    ... of restaurant sales was primarily due to the leverage of food and alcohol costs as a result of menu price increases and lower chicken wing prices. Chicken wing costs dropped to $1.22 per pound in 2008 from $1.28 per Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar...

  • Page 50
    ... of restaurant sales increased to 30.2% in 2008 compared to 30.0% in 2007. Labor costs in our restaurants were higher than prior year due to restaurants having higher management salaries which were partially offset by lower workers' compensation costs. 28 Source: BUFFALO WILD WINGS INC, 10...

  • Page 51
    ... restaurants opening in 2009, and incurred $197,000 related to the acquisition of the nine franchised restaurants located in Nevada. In 2007, we opened 23 new company-owned restaurants and incurred cost of approximately $47,000 for restaurants opening in 2008. Average preopening cost per restaurant...

  • Page 52
    ...the timing of payments received related to credit cards and royalties which was affected by the Christmas holiday. The increase in trading securities was due to additional contributions to the Management Deferred Compensation Plan. 29 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered...

  • Page 53
    ... of payments related to our self insurance programs. The increase in income tax receivables was due to the timing of payments. Net cash used in investing activities for 2009, 2008, and 2007, was $79.2 million, $60.1 million, and $54.7 million, respectively. Investing activities included purchases of...

  • Page 54
    30 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar® Document Researchâ„

  • Page 55
    ... same-store sales, changes in 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. 31 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered...

  • Page 56
    ...30, 2008 Revenue: Restaurant sales $ 86,896 Franchise royalties and fees 10,366 Total revenue Costs and expenses: Restaurant operating costs: Cost of sales Labor Operating Occupancy Depreciation and amortization General and administrative Preopening Loss on asset disposals and impairment Total costs...

  • Page 57
    ...2008 Revenue: Restaurant sales Franchise royalties and fees Total revenue Costs and expenses: Restaurant operating costs: Cost of sales Labor Operating Occupancy Depreciation and amortization General and administrative Preopening Loss on asset disposals and impairment Total costs and expenses Income...

  • Page 58
    ... do not create a market risk. The primary food product used by company-owned and franchised restaurants is chicken wings. We work to counteract the effect of the volatility of chicken wing prices, which can significantly change our cost of sales and cash flow, with the introduction of new menu items...

  • Page 59
    ... of Quarterly Operations." BUFFALO WILD WINGS, INC. Index to Consolidated Financial Statements Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets as of December 27, 2009 and December 28, 2008 Consolidated Statements of Earnings for the Fiscal Years Ended December 27...

  • Page 60
    Report of Independent Registered Public Accounting Firm The Board of Directors and Stockholders Buffalo Wild Wings, Inc.: We have audited the accompanying consolidated balance sheets of Buffalo Wild Wings, Inc. and subsidiaries (the "Company") as of December 27, 2009 and December 28, 2008, and the ...

  • Page 61
    February 25, 2010 36 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar® Document Researchâ„

  • Page 62
    BUFFALO WILD WINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 27, 2009 and December 28, 2008 (Dollar amounts in thousands) December 27, 2009 Assets Current assets: Cash and cash equivalents Marketable securities Accounts receivable - franchisees, net of allowance of $25 Accounts ...

  • Page 63
    37 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar® Document Researchâ„

  • Page 64
    ...STATEMENTS OF EARNINGS Fiscal years ended December 27, 2009, December 28, 2008, and December 30, 2007 (Amounts in thousands except per share data) Fiscal years ended December 28, 2008 379,686 42,731 422,417 December 27, 2009 Revenue: Restaurant sales Franchise royalties and fees Total revenue Costs...

  • Page 65
    ... 28, 2008 Net earnings Shares issued under employee stock purchase plan Shares issued from restricted stock units Units effectively repurchased for required employee withholding taxes Exercise of stock options Tax benefit from stock issued Stock-based compensation Balance at December 27, 2009 Total...

  • Page 66
    ...: Trading securities Accounts receivable Inventory Prepaid expenses Other assets Unearned franchise fees Accounts payable Income taxes Accrued expenses Net cash provided by operating activities Cash flows from investing activities: Acquisition of property and equipment Purchase of marketable...

  • Page 67
    ...well as selling Buffalo Wild Wings restaurant franchises. In exchange for the initial and continuing franchise fees received, we give franchisees the right to use the name Buffalo Wild Wings. We operate as a single segment for reporting purposes. At December 27, 2009, December 28, 2008, and December...

  • Page 68
    ...at or near par value (cost). Trading securities are stated at fair value, with gains or losses resulting from changes in fair value recognized currently in earnings as investment income. We have funded a deferred compensation plan using trading assets in a marketable equity portfolio. This portfolio...

  • Page 69
    ... that purchase requirements do not create a market risk. The primary food product used by Company-owned and franchised restaurants is chicken wings. Chicken wings are purchased by us at market prices. For fiscal 2009, 2008, and 2007, chicken wings were 25%, 21%, and 24% of restaurant cost of sales...

  • Page 70
    ... over the life of the related franchise agreement. We evaluate reacquired franchise rights in conjunction with our impairment evaluation of long-lived assets. Liquor licenses are either amortized over their annual renewal period or, if purchased, are carried at the lower of fair value or cost. We...

  • Page 71
    ... the Buffalo Wild Wings trademarks, system, training, preopening assistance, and restaurant operating assistance in exchange for area development fees, franchise fees, and royalties of 5% of a restaurant's sales. Franchise fee revenue from individual franchise sales is recognized upon the opening of...

  • Page 72
    Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar® Document Researchâ„

  • Page 73
    ... are calculated based upon monthly purchases. We generally receive payment from vendors approximately 30 days from the end of a month for that month's purchases. During fiscal 2009, 2008, and 2007, vendor allowances were recorded as a reduction in inventoriable costs, and cost of sales was reduced...

  • Page 74
    ...2009, therefore, the liability balance of $2,259 as of December 28, 2008, which related only to Company-owned gift card liabilities, was included in "accrued expenses" on our accompanying consolidated balance sheet for that period. 44 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered...

  • Page 75
    ... statement of earnings for fiscal year 2009 was $6,490 before income taxes and consisted of restricted stock, stock options, and employee stock purchase plan (ESPP) expense of $5,769, $392 and $329, respectively. The related total tax benefit was $2,298 during 2009. Source: BUFFALO WILD WINGS...

  • Page 76
    45 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar® Document Researchâ„

  • Page 77
    ... statement of earnings for fiscal year 2008 was $4,900 before income taxes and consisted of restricted stock, stock options, and employee stock purchase plan (ESPP) expense of $4,510, $138 and $252, respectively. The related total tax benefit was $1,817 during 2008. Total stock-based compensation...

  • Page 78
    46 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar® Document Researchâ„

  • Page 79
    BUFFALO WILD WINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 27, 2009 and December 28, 2008 (Dollar amounts in thousands, except per-share amounts) (2) Fair Value Measurements On December 29, 2008, we adopted new guidance for fair value measurements, related to ...

  • Page 80
    ... are recorded at their carrying amounts which approximate fair value, based on their short-term nature or variable interest rate. These financial assets and liabilities include cash and cash equivalents, accounts receivable, and accounts payable. (3) Marketable Securities Marketable securities...

  • Page 81
    securities totaled $25,824 and proceeds from maturities totaled $35,661 in 2007. All held-to-maturity debt securities mature within one year and had an aggregate fair value of $23,753 at December 30, 2007. 48 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar® Document...

  • Page 82
    BUFFALO WILD WINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 27, 2009 and December 28, 2008 (Dollar amounts in thousands, except per-share amounts) Trading securities represent investments held for future needs of a non-qualified deferred compensation plan. The fair ...

  • Page 83
    49 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar® Document Researchâ„

  • Page 84
    ... and corporate offices under operating leases that have various expiration dates. In addition to base rents, leases typically require us to pay our share of maintenance and real estate taxes and certain leases include provisions for contingent rentals based upon sales. Future minimum rental payments...

  • Page 85
    50 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar® Document Researchâ„

  • Page 86
    ... expected federal income taxes (benefits) at the statutory rate of 35% to the actual provision for income taxes is as follows: Fiscal Years Ended December 27, December 28, 2009 2008 $ 15,883 12,728 1,310 69 (85) (2,713) 293 14,757 51 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by...

  • Page 87
    Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar® Document Researchâ„

  • Page 88
    BUFFALO WILD WINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 27, 2009 and December 28, 2008 (Dollar amounts in thousands, except per-share amounts) Deferred tax assets and liabilities are classified as current and noncurrent on the basis of the classification of the ...

  • Page 89
    ... applicable income taxes, based on our closing stock price of $42.92 as of the last business day of the year ended December 27, 2009, which would have been received by the optionees had all options been exercised on that date. As of December 27, 2009, total unrecognized stock-based compensation...

  • Page 90
    179,134 The Plan has 829,614 shares available for grant as of December 27, 2009. 53 115,986 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar® Document Researchâ„

  • Page 91
    ... the number of shares needed for the required minimum employee withholding taxes. We issue new shares of common stock upon the disbursement of restricted stock units. Restricted stock units are contingently issuable shares, and the activity for fiscal 2009 is as follows: Weighted average grant date...

  • Page 92
    ... Plan ("ESPP"). The ESPP is available to substantially all employees subject to employment eligibility requirements. Participants may purchase our common stock at 85% of the beginning or ending closing price, whichever is lower, for each six-month period ending in May and November. During 2009, 2008...

  • Page 93
    Restricted stock units 55 450,869 284,845 140,692 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar® Document Researchâ„

  • Page 94
    ...of Cash Flow Information Fiscal Years Ended December 28, 2008 4,681 December 27, 2009 Cash paid during the period for: Income taxes Noncash financing and investing transactions: Property and equipment not yet paid for Tax withholding for restricted stock units Goodwill adjustment (12) Loss on Asset...

  • Page 95
    ...estimated discounted future cash flows and the underlying fair value of the assets. We also recorded an impairment charge of $395 for the assets of one restaurant being relocated. No impairment charges were incurred during 2007. 56 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by...

  • Page 96
    ...December 28, 2008 (Dollar amounts in thousands, except per-share amounts) A summary of the loss on asset disposals and impairment charges recognized by us is as follows: Fiscal Years Ended December 28, 2008 85 549 1,449 2,083 December 27, 2009 Store closing charges Long-lived asset impairment Other...

  • Page 97
    57 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar® Document Researchâ„

  • Page 98
    ... assets of nine Buffalo Wild Wings franchised restaurants located in Las Vegas, Nevada. The total purchase price of $23,071, which includes direct acquisition costs of $426, was paid in cash and was funded by cash and the sale of marketable securities. The acquisition was accounted for as a business...

  • Page 99
    ... information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission's rules and forms. Management's Report on Internal Control...

  • Page 100
    ...with generally accepted accounting principles. Our independent registered public accounting firm, KPMG LLP, has issued an audit report on the effectiveness of our internal control over financial reporting. 59 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar® Document...

  • Page 101
    ... during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION Not applicable. 60 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar® Document...

  • Page 102
    ... 2010 Annual Meeting of Shareholders. Such information is incorporated herein by reference. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this item is contained in the section entitled "Independent Registered Public Accounting Firm" appearing in our Proxy Statement to...

  • Page 103
    ... at Item 8 of this Form 10-K. Report of Independent Registered Public Accounting Firm dated February 26, 2010 Consolidated Balance Sheets as of December 27, 2009 and December 28, 2008 Consolidated Statements of Earnings for the Fiscal Years Ended December 27, 2009, December 28, 2008, and December...

  • Page 104
    SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: February 26, 2010 BUFFALO WILD WINGS, INC. By SALLY J. SMITH Sally J. Smith Chief Executive Officer and President...

  • Page 105
    Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar® Document Researchâ„

  • Page 106
    ... Allowance for doubtful accounts Balance at Beginning of Period 2009 2008 2007 2009 2008 2007 $ Deductions From Reserves - 544 22 31 85 139 Balance at End of Period 25 25 25 - - - Store closing reserves 64 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar...

  • Page 107
    ... 3.1 to our Form 10-Q for the fiscal quarter ended June 29, 2008) Amended and Restated Bylaws, as Amended (incorporated by reference to Exhibit 3.1 to our current report on Form 8-K filed May 27, 2009) Form of specimen certificate representing Buffalo Wild Wings, Inc.'s common stock (incorporated by...

  • Page 108
    ....1 to our Form 8-K filed September 22, 2008)(1) Employment Agreement dated September 16, 2008 with Mary J. Twinem (incorporated by reference to Exhibit 10.2 to our Form 8-K filed September 22, 2008)(1) 65 10.14 10.15 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar...

  • Page 109
    ... Nevada Gaming Regulation 10.17 10.18 10.19 10.20 10.21 10.22 10.23 10.24 10.25 10.26 21.1 23.1* 24.1* 31.1* 31.2* 32.1* 32.2* 99.1* * (1) Filed herewith. Management agreement or compensatory plan or arrangement. 66 Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by...

  • Page 110
    ... the fiscal years in the three-year period ended December 27, 2009, and the related financial statement schedule, and the effectiveness of internal control over financial reporting as of December 27, 2009, which report appears in the December 27, 2009 annual report on Form 10-K of Buffalo Wild Wings...

  • Page 111
    ...-OXLEY ACT I, Sally J. Smith, certify that: 1. 2 I have reviewed this report on Form 10-K for fiscal year ended December 27, 2009 of Buffalo Wild Wings, Inc.; Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to...

  • Page 112
    ...-OXLEY ACT I, Mary J. Twinem, certify that: 1. 2 I have reviewed this report on Form 10-K for fiscal year ended December 27, 2009 of Buffalo Wild Wings, Inc.; Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to...

  • Page 113
    ... THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of Buffalo Wild Wings, Inc. (the "company") on Form 10-K for the year ended December 27, 2009 as filed with the Securities and Exchange Commission (the "Report"), I, Sally J. Smith, certify, pursuant to 18 U.S.C. §1350, as adopted...

  • Page 114
    ... THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of Buffalo Wild Wings, Inc. (the "company") on Form 10-K for the year ended December 27, 2009 as filed with the Securities and Exchange Commission (the "Report"), I, Mary J. Twinem, certify, pursuant to 18 U.S.C. §1350, as adopted...

  • Page 115
    ... controls over the financial practices of licensees, including the establishment of minimum procedures for internal fiscal affairs and the safeguarding of assets and revenues; • providing reliable record keeping and requiring the filing of periodic reports with the Nevada Gaming Authorities...

  • Page 116
    ... have jurisdiction to disapprove a change in a corporate position. If the Nevada Gaming Authorities were to find an officer, director, or key employee unsuitable for licensing or to continue having a relationship with us or the licensed subsidiary, Buffalo Wild Wings or the licensed subsidiary would...

  • Page 117
    ... remuneration in any form; or make any payment to the unsuitable person by way of principal, redemption, conversion, exchange, liquidation or similar transaction. We are required to maintain a current stock ledger that may be examined by the Nevada Gaming Authorities at any time. If any securities...

  • Page 118
    ..., these fees and taxes are payable either monthly, quarterly, or annually and are based upon the number of gaming devices operated. A live entertainment tax is also paid on charges for admission to any facility where certain forms of live entertainment are provided. 4 Source: BUFFALO WILD WINGS INC...

  • Page 119
    ...guilty of cheating at gambling. The sale of alcoholic beverages by the licensed subsidiary is subject to licensing, control, and regulation by the applicable local authorities. All licenses are revocable and are not transferable. The agencies involved have full power to limit, condition, suspend, or...