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Build-a-Bear Workshop, Inc. Reports Fiscal 2011 Second Quarter Results
ST. LOUIS, Mo., Jul 28, 2011 (BUSINESS WIRE) -- Build-A-Bear Workshop, Inc. (NYSE: BBW), an interactive entertainment retailer, today reported results for the second quarter and first six months ended July 2, 2011. Second quarter 2011 total revenue increased 9.0%, excluding the impact of foreign currency. Consolidated comparable store sales increased 7.1% and included an 8.3% increase in North America and a 1.3% increase in Europe. The quarter's results were positively impacted by the shift of the Easter holiday, which moved into the second quarter this year from the first quarter in 2010. Second quarter net loss of $6.7 million or $0.37 per share included $0.05 per share in consulting costs related to the Company's continuing initiatives to improve efficiencies and reduce expenses. This compares to the second quarter fiscal 2010 net loss of $0.45 per share, which included a $0.02 per share non-cash impairment charge related to certain long-term deposits. For the full-year 2011, the Company continues to anticipate savings from the consulting project of $4.0 million to $6.0 million, or $0.14 to $0.21 per diluted share, with an expected annualized benefit of $10 million to $15 million.
"In the second quarter, we grew our total revenue, increased our comparable store sales and achieved higher gross margin which resulted in a significant improvement in our net loss, as compared to the prior year," stated Build-A-Bear Workshop Chairman and Chief Executive Bear Maxine Clark. "While the quarter benefited from the movement of Easter into the fiscal period, our consolidated comp sales trends were also positive post-Easter reflecting strength in our merchandise and marketing initiatives. Our consolidated e-commerce sales rose 22.8% for the quarter giving us confidence in our strategies throughout all channels of our business.
"We believe the ongoing execution of our strategies will put us in a strong position to continue our positive sales performance throughout the second half of the year," Ms. Clark continued. "Our summer product is strong, including the recent launch of the Smurfs, which capitalized on the build-up to the theatrical release. We continue to move aggressively on initiatives to improve our cost structure. As such, we expect to achieve our annual profitability goals and advance our number one objective to increase shareholder value by profitably growing sales," Ms. Clark concluded.
Fiscal 2011 Second Quarter (13 weeks ended July 2, 2011):
Fiscal 2011 First Six Months (26 weeks ended July 2, 2011):
During the quarter, the Company opened one store in North America and closed one store in Europe. At quarter end the Company operated 342 company-owned stores - 289 in North America and 53 in Europe, as compared to 292 in North America and 54 in Europe at the end of fiscal 2010 second quarter. Additionally, as of the end of the fiscal 2011 second quarter, the Company operated eight pop-up locations in North America.
The Company ended the 2011 second quarter with a strong balance sheet and no borrowings under its revolving credit facility. As of July 2, 2011, cash and cash equivalents totaled $34.7 million, over 30% of which was domiciled outside the U.S. Total inventory at quarter end was $46.2 million. Inventory per square foot declined 20%, as compared to the prior year period.
The Company continues to expect capital expenditures of $12 to $15 million in 2011, compared to capital spending of $15 million in 2010 and depreciation and amortization of approximately $25 million, compared to $27 million in 2010. Through the first half of 2011, the Company opened one store, closed three stores and relocated four existing locations and, for the full fiscal year, currently expects to open five stores and close five to ten stores.
During fiscal 2011 second quarter, the Company repurchased approximately 389,000 shares of its common stock at a total cost of $2.6 million. At quarter end, the Company had $18.6 million of availability under the current stock repurchase program.
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. ET today. The audio broadcast may be accessed at the Company's 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 ET today until midnight ET on August 11, 2011. The telephone replay is available by calling (617) 801-6888. The access code is 80107441.
About Build-A-Bear Workshop, Inc.
Build-A-Bear Workshop, Inc. is the only global company that offers an interactive make-your-own stuffed animal retail-entertainment experience. There are more than 400 Build-A-Bear Workshop stores worldwide, including company-owned stores in the U.S., Puerto Rico, Canada, the United Kingdom and Ireland, and franchise stores in Europe, Asia, Australia, Africa, the Middle East, Mexico and South America. Founded in St. Louis in 1997, Build-A-Bear Workshop is the leader in interactive retail. Brands include make-your-own Major League Baseball® mascot in-stadium locations, and Build-A-Dino® stores. Build-A-Bear Workshop extends its in-store interactive experience online with its award winning virtual world Web site at bearville.com®. The company was named to the FORTUNE 100 Best Companies to Work For® lists for the third year in a row in 2011. Build-A-Bear Workshop (NYSE: BBW) posted total revenue of $401.5 million in fiscal 2010. For more information, call 888.560.BEAR (2327) or visit the company's award-winning Web site at buildabear.com®.
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 1, 2011, 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; 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 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; we may be unable to effectively manage the operations and growth of our company-owned stores; the availability and costs of our products could be adversely affected by risks associated with international manufacturing and trade, including foreign currency fluctuation; we are susceptible to disruption in our inventory flow due to our reliance on a few vendors; high petroleum products prices could increase our inventory transportation costs and adversely affect our profitability; we may be unable to effectively manage our international franchises or laws relating to those franchises may change; we may be unable to operate our European company-owned stores profitably; fluctuations in our quarterly results of operations could cause the price of our common stock to substantially decline; 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; 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 improperly obtain or be unable to protect information from our guests in violation of privacy or security laws or expectations; we may suffer negative publicity or be sued due to violations of labor laws or unethical practices by manufacturers of our merchandise; we may suffer negative publicity or negative sales if the non-proprietary toy products we sell in our stores do not meet our quality or sales expectations; we may lose key personnel, be unable to hire qualified additional personnel, or experience turnover of our management team; we may be unable operate our company-owned distribution center efficiently or our third-party distribution center providers may perform poorly; 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; we may have disputes with, or be sued by, third parties for infringement or misappropriation of their proprietary rights; and poor global economic conditions could have a material adverse effect on our liquidity and capital resources. 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.
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SOURCE: Build-A-Bear Workshop, Inc.