Revenue from European operations, excluding the impact of foreign exchange, increased 18% to $14.1 million in first quarter 2009 vs. first quarter 2008.
Cost reduction plans on track to deliver approximately $15 million in annualized pre-tax savings in fiscal 2009.
Balance sheet remains debt-free with consolidated cash balance of $34 million.
ST. LOUIS--(BUSINESS WIRE)--Apr. 30, 2009--
Build-A-Bear Workshop, Inc. (NYSE: BBW), an interactive entertainment
retailer of customized stuffed animals, today reported results for the
2009 first quarter. For the quarter, the company reported a net loss of
$0.8 million, or $0.04 per diluted share, compared to the fiscal 2008
first quarter net income of $6.4 million or $0.32 per diluted share.
The 2009 first quarter net loss included a pre-tax charge of $0.5
million or $0.02 per diluted share associated with the previously
announced closure of the friends 2B made retail concept.
The company also reported that plans to generate approximately $15
million in annualized pre-tax savings in fiscal 2009 are progressing on
track. Capital expenditures expected at $9 million, down from $23
million in 2008, are also on-plan.
“Our priorities during this difficult economy continue to be maintaining
our strong and flexible balance sheet, increasing the value of our
brand, and maximizing cash flow,” said Maxine Clark, chairman and chief
executive bear, Build-A-Bear Workshop, Inc. “The decline in mall traffic
and consumer spending has continued to affect our sales, but there were
bright spots in the quarter which validate our business model. When
consumers were in the mall – for example, Valentine’s Day and Easter –
we saw significant improvement in our sales and we are working to
maximize these trends over the balance of the year.”
Fiscal 2009 First-Quarter
For the first quarter (13 weeks ended April 4, 2009), total revenues
were $97.3 million, compared to $123.8 million in the fiscal 2008 first
quarter (13 weeks ended March 29, 2008). Net retail sales were $96.3
million, compared to $121.9 million in 2008. Excluding the impact of
foreign exchange, net retail sales declined 19%.
Consolidated comparable store sales declined 17.8% in the quarter and
comprised a 20.5% decline in North America and a 5.6% increase in
Europe. Due to the 53rd week in fiscal 2008, first quarter comparable
store sales are compared to the 13 week period ended April 5, 2008. Net
retail sales benefited from new stores opened during the past twelve
months.
First quarter 2009 was negatively affected when compared to the 2008
first quarter due to the shift in the Easter holiday and associated
school vacations, an important selling time for the company. In 2008,
Easter sales were included in the first quarter; in 2009 Easter sales
will be included in the second quarter.
European operations net retail sales were $14.1 million in the 2009
first quarter, compared to $16.4 million in the 2008 first quarter.
Excluding the impact of foreign exchange, European operations net retail
sales increased 18%, reflecting the strengthening of the U.S. dollar
versus the British pound. The pre-tax loss from European operations
totaled $0.9 million in the 2009 first quarter, compared to a loss of
$0.1 million in the 2008 first quarter.
During the 2009 first quarter, the company opened no new stores as
planned, compared with opening four new stores – two in North America
and two in Europe – during the 2008 first quarter. Build-A-Bear Workshop
company-owned stores, at the end of the first quarter, totaled 346 – 292
in North America and 54 in Europe.
At the end of the 2009 first quarter the company’s consolidated cash
position was $34 million.
In the fiscal 2008 third quarter, the company announced plans to close
the friends 2B made concept, a line of make-your-own dolls and related
products. The closure plan affects nine friends 2B made locations. In
the 2009 first quarter the company recorded a pre-tax charge of $0.5
million or $0.02 per diluted share associated with the location
closures. The majority of these charges are attributable to lease
termination costs. Charges associated with this concept closing are
identified as 'store closing' costs on the consolidated statement of
operations included in this press release. The company expects to incur
additional pretax charges related to the friends 2B made concept of
approximately $1.4 to $1.8 million through the third quarter of fiscal
2009.
Other News
Build-A-Bear Workshop will host its Annual Meeting of Stockholders on
Thursday, May 14, 2009 at 10:00 a.m. local time (CDT) at the company’s
Bearquarters, 1954 Innerbelt Business Center Drive, St. Louis, Missouri.
The company will broadcast the meeting over the Internet via webcast.
The webcast will be accessible through the Investor Relations page of
the Build-A-Bear workshop corporate Web site, http://IR.buildabear.com.
Following the live meeting, a replay of the webcast will be available
until the next annual meeting.
Today’s Conference Call Webcast
Build-A-Bear Workshop will host a live Internet webcast of its quarterly
investor conference call at 9 a.m. EDT today. The audio broadcast may be
accessed at our investor relations Web site, http://IR.buildabear.com.
The call is expected to conclude by 10 a.m.
A replay of the conference call webcast will be available in the
investor relations Web site for one year. A telephone replay will be
available beginning at approximately noon EDT today until midnight EDT
on May 14, 2009. The telephone replay is available by calling (617)
801-6888. The access code is 71110649.
About Build-A-Bear Workshop, Inc.
Build-A-Bear Workshop, Inc. is the leading and only global company that
offers an interactive make-your-own stuffed animal retail-entertainment
experience. Founded in 1997, the company currently operates more than
400 Build-A-Bear Workshop® stores worldwide, including
company-owned stores in the United States, Puerto Rico, Canada, the
United Kingdom, Ireland and France, and franchise stores in Europe,
Asia, Australia and Africa. In 2007, the interactive experience was
enhanced - all the way to CyBEAR® space - with the launch of
buildabearville.com®, the company’s virtual world stuffed
with fun. Build-A-Bear Workshop (NYSE: BBW) posted total revenue of $468
million in fiscal 2008. For more information, call 888.560.BEAR (2327)
or visit the company’s award-winning Web sites at www.buildabear.com.
Forward-Looking Statements
This press release contains "forward-looking statements" (within the
meaning of the federal securities laws) which represent Build-A-Bear
Workshop expectations or beliefs with respect to future events. Our
actual results may differ materially from the results discussed in the
forward-looking statements. These risks and uncertainties include,
without limitation, those detailed under the caption “Risk Factors” in
our annual report on Form 10-K for the fiscal year ended January 3,
2009, as filed with the SEC, and the following: general economic
conditions may continue to deteriorate, which could lead to
disproportionately reduced consumer demand for our products, which
represent relatively discretionary spending; our consolidated financial
results may be significantly affected by changes in foreign currency
exchange rates, customer traffic may continue to decrease in the
shopping malls where we are located, on which we depend to attract
guests to our stores; we may be unable to generate interest in and
demand for our interactive retail experience, or to identify and respond
to consumer preferences in a timely fashion; our marketing and on-line
initiatives may not be effective in generating sufficient levels of
brand awareness and guest traffic; we may be unable to generate
comparable store sales growth; we may be unable to open new stores or
may be unable to effectively manage our growth; we may be unable to
close our friends 2B made concept on terms we currently anticipate; we
may be unable to effectively manage our international franchises or laws
relating to those franchises may change; we may be unable to renew or
replace our store leases, or enter into leases for new stores on
favorable terms or in favorable locations, or may violate the terms of
our current leases; the ability of our principal vendors to deliver
merchandise may be disrupted; the availability and costs of our products
could be adversely affected by risks associated with international
manufacturing and trade; high petroleum products prices could increase
our inventory transportation costs and adversely affect our
profitability; we may be unable to repurchase shares at all or at the
times or in the amounts we currently anticipate or the results of the
share repurchase program may not be as beneficial as we currently
anticipate; fluctuations in our quarterly results of operations could
cause the price of our common stock to substantially decline; we may
suffer negative publicity or be sued due to violations of labor laws or
unethical practices by manufacturers of our merchandise; we may
improperly obtain or be unable to protect information from our guests in
violation of privacy or security laws or expectations; our products
could become subject to recalls or product liability claims that could
adversely impact our financial performance and harm our reputation among
consumers; we may lose key personnel, be unable to hire qualified
additional personnel, or experience turnover of our management team; we
may be unable to realize the anticipated benefits from our company-owned
distribution center or our third-party distribution center providers may
perform poorly; we may be unable to realize some of the expected
benefits of the acquisition of Amsbra and Bear Factory, and the
inclusion of France as a company-owned country; our market share could
be adversely affected by a significant, or increased, number of
competitors; we may fail to renew, register or otherwise protect our
trademarks or other intellectual property; and we may have disputes
with, or be sued by, third parties for infringement or misappropriation
of their proprietary rights. These risks, uncertainties and other
factors may adversely affect our business, growth, financial condition
or profitability, or subject us to potential liability, and cause our
actual results, performance or achievements to be materially different
from those expressed or implied by our forward-looking statements. The
company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES
|
Unaudited Condensed Consolidated Statements of Operations
|
(dollars in thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks
|
|
|
|
|
13 Weeks
|
|
|
|
|
|
|
|
|
|
|
Ended
|
|
|
|
|
Ended
|
|
|
|
|
|
|
|
|
|
|
April 4,
|
|
% of Total
|
|
|
March 29,
|
|
% of Total
|
|
|
|
|
|
|
|
|
2009
|
|
|
Revenues (1) |
|
2008
|
|
|
Revenues (1) |
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net retail sales
|
$
|
96,316
|
|
|
98.9
|
|
|
$
|
121,854
|
|
|
98.4
|
|
|
Franchise fees
|
|
597
|
|
|
0.6
|
|
|
|
1,249
|
|
|
1.0
|
|
|
Licensing revenue
|
|
429
|
|
|
0.4
|
|
|
|
704
|
|
|
0.6
|
|
|
|
|
Total revenues
|
|
97,342
|
|
|
100.0
|
|
|
|
123,807
|
|
|
100.0
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
Cost of merchandise sold
|
|
61,052
|
|
|
63.4
|
|
|
|
68,739
|
|
|
56.4
|
|
|
Selling, general and administrative
|
|
36,919
|
|
|
37.9
|
|
|
|
44,827
|
|
|
36.2
|
|
|
Store preopening
|
|
—
|
|
|
0.0
|
|
|
|
553
|
|
|
0.4
|
|
|
Store closing
|
|
501
|
|
|
0.5
|
|
|
|
—
|
|
|
—
|
|
|
Interest expense (income), net
|
|
(24
|
)
|
|
0.0
|
|
|
|
(460
|
)
|
|
(0.4
|
)
|
|
|
|
Total costs and expenses
|
|
98,448
|
|
|
101.1
|
|
|
|
113,659
|
|
|
91.8
|
|
|
|
|
Income (loss) before income taxes
|
|
(1,106
|
)
|
|
(1.1
|
)
|
|
|
10,148
|
|
|
8.2
|
|
Income tax expense (benefit)
|
|
(280
|
)
|
|
(0.3
|
)
|
|
|
3,755
|
|
|
3.0
|
|
|
|
|
Net income (loss)
|
$
|
(826
|
)
|
|
(0.8
|
)
|
|
$
|
6,393
|
|
|
5.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
$
|
(0.04
|
)
|
|
|
|
$
|
0.32
|
|
|
|
|
Diluted
|
|
|
$
|
(0.04
|
)
|
|
|
|
$
|
0.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing common per share amounts:
|
|
|
|
|
Basic
|
|
|
|
|
18,783,915
|
|
|
|
|
|
20,150,325
|
|
|
|
|
Diluted
|
|
|
|
18,783,915
|
|
|
|
|
|
20,244,984
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Selected statement of operations data expressed as a
percentage of total revenues, except cost of merchandise sold which
is expressed as a percentage of net retail sales. Percentages will
not total due to cost of merchandise sold being expressed as a
percentage of net retail sales and rounding.
|
BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES
|
Unaudited Condensed Consolidated Balance Sheets
|
(dollars in thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 4,
|
|
January 3,
|
|
|
|
|
|
|
2009
|
|
|
|
2009
|
|
ASSETS
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
$
|
33,857
|
|
|
$
|
47,000
|
|
|
Inventories
|
|
43,049
|
|
|
|
50,586
|
|
|
Receivables
|
|
4,306
|
|
|
|
8,288
|
|
|
Prepaid expenses and other current assets
|
|
15,202
|
|
|
|
16,151
|
|
|
Deferred tax assets
|
|
3,961
|
|
|
|
3,839
|
|
|
|
|
Total current assets
|
|
100,375
|
|
|
|
125,864
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
117,650
|
|
|
|
123,193
|
|
Goodwill
|
|
|
30,843
|
|
|
|
30,480
|
|
Other intangible assets, net
|
|
3,794
|
|
|
|
3,903
|
|
Investment in affiliate
|
|
7,890
|
|
|
|
7,721
|
|
Other assets, net
|
|
8,493
|
|
|
|
8,991
|
|
Total Assets
|
$
|
269,045
|
|
|
$
|
300,152
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
$
|
20,728
|
|
|
$
|
37,547
|
|
|
Accrued expenses
|
|
6,043
|
|
|
|
12,593
|
|
|
Gift cards and customer deposits
|
|
24,085
|
|
|
|
29,210
|
|
|
Deferred revenue
|
|
7,636
|
|
|
|
7,634
|
|
|
|
|
Total current liabilities
|
|
58,492
|
|
|
|
86,984
|
|
|
|
|
|
|
|
|
|
Deferred franchise revenue
|
|
1,964
|
|
|
|
2,033
|
|
Deferred rent
|
|
39,755
|
|
|
|
41,714
|
|
Other liabilities
|
|
1,677
|
|
|
|
1,696
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
Common stock, par value $0.01 per share
|
|
199
|
|
|
|
195
|
|
|
Additional paid-in capital
|
|
76,621
|
|
|
|
76,852
|
|
|
Accumulated other comprehensive income
|
|
(12,101
|
)
|
|
|
(12,585
|
)
|
|
Retained earnings
|
|
102,438
|
|
|
|
103,263
|
|
|
|
|
Total stockholders' equity
|
|
167,157
|
|
|
|
167,725
|
|
Total Liabilities and Stockholders' Equity
|
$
|
269,045
|
|
|
$
|
300,152
|
|
BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES
|
Unaudited Selected Financial and Store Data
|
(dollars in thousands, except square foot data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks
|
|
|
13 Weeks
|
|
|
|
|
|
Ended
|
|
|
Ended
|
|
|
|
|
|
April 4,
|
|
|
March 29,
|
|
|
|
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
Other financial data:
|
|
|
|
|
|
|
|
Gross margin ($) (1)
|
|
$
|
35,264
|
|
|
$
|
53,115
|
|
|
Gross Margin (%) (1)
|
|
|
36.6
|
%
|
|
|
43.6
|
%
|
|
Capital expenditures, net (2)
|
|
$
|
2,150
|
|
|
$
|
5,712
|
|
|
Depreciation and amortization
|
|
$
|
7,039
|
|
|
$
|
7,002
|
|
|
Sales over the Internet
|
|
$
|
2,504
|
|
|
$
|
3,009
|
|
|
|
|
|
|
|
|
|
|
Store data (3):
|
|
|
|
|
|
|
|
Number of company-owned stores at end of period
|
|
|
|
|
|
|
|
|
North America
|
|
|
292
|
|
|
|
274
|
|
|
|
Europe
|
|
|
54
|
|
|
|
51
|
|
|
|
Total stores
|
|
|
346
|
|
|
|
325
|
|
|
|
|
|
|
|
|
|
|
|
Number of franchised stores at end of period
|
|
|
60
|
|
|
|
52
|
|
|
|
|
|
|
|
|
|
|
|
Company-owned store square footage at end of period
|
|
|
|
|
|
|
|
North America
|
|
|
856,504
|
|
|
|
815,708
|
|
|
|
Europe (4)
|
|
|
77,520
|
|
|
|
73,214
|
|
|
|
Total square footage
|
|
|
934,024
|
|
|
|
888,922
|
|
|
|
|
|
|
|
|
|
|
|
Comparable store sales change (%) (5)
|
|
|
|
|
|
|
|
|
North America
|
|
|
(20.5
|
)%
|
|
|
(13.1
|
)%
|
|
|
Europe
|
|
|
5.6
|
%
|
|
|
14.5
|
%
|
|
|
Consolidated
|
|
|
(17.8
|
)%
|
|
|
(10.5
|
)%
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
Gross margin represents net retail sales less cost of merchandise
sold. Gross margin percentage represents gross margin divided by net
retail sales.
|
|
(2
|
)
|
Capital expenditures, net represents cash paid for property,
equipment, other assets and other intangible assets.
|
(3
|
)
|
Excludes our webstore and seasonal and event-based locations. North
American stores are located in the United States, Canada and Puerto
Rico. In Europe, stores are located in the United Kingdom, Ireland
and France.
|
(4
|
)
|
Square footage for stores located in Europe is estimated selling
square footage.
|
(5
|
)
|
Comparable store sales percentage changes are based on net retail
sales and stores are considered comparable beginning in their
thirteenth full month of operation.
|
Source: Build-A-Bear Workshop, Inc.
Build-A-Bear Workshop, Inc.
Investors:
Molly Salky,
314-423-8000 x5353
or
Media:
Jill Saunders, 314-423-8000
x5293