Wingstop(US:WING)2022-02-15 16:00Financial Performance - Total revenue rose by 13.5% year-over-year to $282.5 million, while net income surged by 83.0% to $42.7 million, or $1.42 per diluted share[163] - Adjusted EBITDA increased by 23.0% year-over-year to $88.4 million, reflecting strong operational performance[163] - Net income for the fiscal year ended December 25, 2021, was $42.7 million, an increase of 83.0% compared to $23.3 million in the prior year[176] - Total revenue for fiscal year 2021 was $282.5 million, reflecting a 13.5% increase from $248.8 million in fiscal year 2020[176] - Adjusted EBITDA for fiscal year 2021 was $88.4 million, up from $71.9 million in fiscal year 2020, representing a 22.9% increase[174] - Adjusted net income for fiscal year 2021 was $40.3 million, compared to $32.5 million in the prior year, marking a 24.0% increase[175] Sales and Growth - Domestic same store sales grew by 8.0% compared to the prior fiscal year, with a two-year growth of 29.4%[163] - System-wide sales increased by 20.2% year-over-year to approximately $2.3 billion, driven by both new openings and same store sales growth[163] - Domestic average unit volume (AUV) increased to approximately $1.6 million, up from $1.489 million in the previous year[170] - Company-owned restaurant sales increased by $5.3 million, driven by the opening of seven new restaurants and a same-store sales growth of 3.4%[179] Digital Transformation - Digital sales accounted for over 60% of total sales, indicating a significant shift towards online ordering[163] Franchise and Business Model - The asset-light, highly-franchised business model is designed to generate strong operating margins and low capital expenditures[158] - The company plans to continue expanding its franchise model and increasing same store sales to create shareholder value[158] - Royalty revenue, franchise fees, and other increased by $21.8 million, primarily due to an 8.0% growth in domestic same-store sales and 189 net franchise restaurant openings[177] Cash Flow and Investments - Cash flows from operating activities were $48.9 million in fiscal year 2021, down from $65.5 million in fiscal year 2020[191] - Net cash provided by operating activities was $48.9 million in fiscal year 2021, a decrease of $16.7 million from $65.5 million in the prior fiscal year[192] - Net cash used in investing activities was $29.9 million in fiscal year 2021, an increase of $21.9 million from $8.0 million in fiscal year 2020, primarily due to increased capital expenditures[193] - The increase in cash used in investing activities was primarily due to investments in technology and the remodel of the corporate headquarters[193] Debt and Financing - Interest expense decreased by 10.7% to $15.0 million in fiscal year 2021, down from $16.8 million in the prior year due to refinancing[186] - Effective tax rate increased to 27.6% in fiscal year 2021 from 13.5% in the prior year, primarily due to excess tax benefits from stock options in the previous year[188] - The company completed a refinancing transaction on October 30, 2020, issuing $480.0 million of Series 2020-1 2.84% Fixed Rate Senior Notes[196] - The anticipated repayment date for the 2020 Class A-2 Notes is December 2027, with a 1% annual amortization[197] - The company does not expect debt instrument restrictions to impact its ability to make regular quarterly dividends, subject to capital availability and board discretion[199] Dividends - Quarterly cash dividends paid were $0.14 per share for the first two quarters and $0.17 per share for the third and fourth quarters of 2021, totaling approximately $18.4 million[198] - The company paid a special cash dividend of approximately $148.4 million to stockholders as part of the refinancing transaction[196] Revenue Recognition - Revenue recognition for royalties is based on a percentage of franchise restaurant sales, requiring estimates and assumptions from reported sales[203] Challenges - The company expects labor and supply chain challenges, along with inflationary pressures, to persist into at least fiscal year 2022[161]