Buffalo Wild Wings To Fly in 2010?

NEW YORK, NY-- Buffalo Wild Wings (NASDAQ: BWLD) continues to impress investors with $52 million in cash, debt free, with today's upgrade by Morgan Keegan and a positive comment today by Cowen & Co's restaurant analyst.

The volatile stock has done well in 2009, the result of a cash-rich balance sheet and steady unit growth and earnings growth in a  market which, Cowen analyst Paul Westra told conference attendees, has been "the toughest 2 years in the restaurant business."

• Founded in 1982, BWLD began to franchise in 1992 and went public in 2003.
• BWLD is a 652 unit operator, with 64% franchised and 36% company-owned outlets.
• Despite the difficulty in obtaining financing, company CFO Mary Twinem still expects to achieve targets of 1000+ units by 2013.
• In the past year, the company opened 64 units with a net gain of 59 units.
• 2010 company guidance is for a 13 to 15 percent unit growth, with a 20 percent earnings growth.

AUVs continued to grow, with company-owned sites at $2.3M and franchised outlets at $2.6M. Growing popularity of wings has resulted in an increase in pricing, but the company was able to maintain margins by reductions in other costs including labor.

Basic unit model is:

• Hours are 11am till local bar closing time.
• 5pm to 9pm accounts for 50% of sales.
• Late night accounts for 14%, and the company thinks that this is a primary target for increasing sales.

Analysts have been optimistic about company prospects:

• Oppenheimer, Jessup & Lamont, and Fetl initiated coverage in 2009 with positive outlook.
• BWLD is debt-free with $52M in cash and equivalents.