UNITED STATES
SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event
reported) February 18, 2010

     Build-A-Bear Workshop, Inc.     
(Exact name of registrant as specified in its charter)

     Delaware      

     001-32320      

     43-1883836       

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

 

1954 Innerbelt Business Center Drive
St. Louis, Missouri

 

63114

 

(Address of Principal Executive Offices)

 

(Zip Code)

 

         (314) 423-8000       
Registrant’s telephone number, including area code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Item 2.02.          Results of Operations and Financial Condition.

          On February 18, 2010, Build-A-Bear Workshop, Inc. (the “Company”) issued a press release announcing, among other things, total revenue, net retail sales, net loss, and diluted loss per share for the fourth quarter (13 weeks ended January 2, 2010) and for the full year of fiscal 2009 (52 weeks ended January 2, 2010).  The press release also included the Company’s objectives for fiscal 2010 new store openings for Company-owned stores and franchise stores, and capital expenditures.

          A copy of the press release is furnished as Exhibit 99.1 hereto and is incorporated by reference herein.  The description of the press release contained herein is qualified in its entirety by the full text of such exhibit.

          The information furnished in contained or incorporated by reference into this Item 2.02, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.  In addition, this report (including Exhibit 99.1) shall not be deemed an admission as to the materiality of any information contained herein that is required to be disclosed solely as a requirement of this Item.


Item 9.01           Financial Statements and Exhibits.

(d)  Exhibits

Exhibit Number

 

Description of Exhibit

 

99.1

Press Release dated February 18, 2010

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

BUILD-A-BEAR WORKSHOP, INC.

 

 
Date: February 18, 2010 By:

/s/ Tina Klocke

Name:

Tina Klocke

Title: Chief Operations and Financial

Bear, Secretary and Treasurer

Exhibit 99.1

Build-A-Bear Workshop, Inc. Reports Fiscal 2009 Fourth Quarter and Full-Year Results

ST. LOUIS--(BUSINESS WIRE)--February 18, 2010--Build-A-Bear Workshop, Inc. (NYSE: BBW), an interactive entertainment retailer, today reported results for the 2009 fourth quarter and full year. Fiscal 2009 represented a 52-week period and compares to a 53-week period in fiscal 2008 with the additional week occurring in the fourth quarter of 2008. The Company also provided its initial outlook for fiscal 2010, including the expansion of its experiential product assortment.

“We made solid progress in 2009 including improved North American comparable store sales trends each quarter of the year, a strong performance in Europe, a $25 million reduction in expenses and positive cash flow,” stated Build-A-Bear Workshop Chairman and Chief Executive Bear Maxine Clark. “As a result of our actions, we begin 2010 in a strong financial position, with a strengthened platform from which to execute our plans.

The number one objective in 2010 is to increase shareholder value by driving revenues and profits,” Ms Clark continued. “We will achieve these results through product innovation, focused marketing and disciplined store operations. As we begin 2010, we are pleased with the response to our new product launches, which have driven further improvement in our comparable store sales trend. As part of our commitment to innovation, this year we will introduce additional toy products that represent imaginative play. The first introduction of the highly popular Zhu ZhuTM pets, a line of artificially intelligent plush hamsters, is currently in 50 stores with strong results and will roll out to all of our North American locations by March 2010.


Ms. Clark further stated, “At the same time, we continue to aggressively focus on cost reduction programs over and above the $25 million achieved in fiscal 2009. We believe our strategies will lead to increased sales productivity and profitability with our actions already showing progress. Together with our Board of Directors, we will continue to closely monitor the results of our initiatives and our business cash needs and evaluate additional ways to deploy cash and increase shareholder value on an ongoing basis.”

Fiscal 2009 fourth-quarter (13 weeks ended January 2, 2010):


Fiscal 2009 full-year (52 weeks ended January 2, 2010):

At year end the Company operated 345 company-owned stores – 291 in North America and 54 in Europe. During fiscal 2009, the Company opened 1 new store in North America, compared with 20 new stores during 2008. In Europe, the Company did not open any new stores compared with five new stores during 2008.


Balance Sheet

The Company ended the year with a strong balance sheet and no borrowings under its revolving credit facility. As of January 2, 2010, cash and cash equivalents totaled $60.4 million, half of which was domiciled outside the U.S. Also, year-end fiscal 2009 inventory was $44.4 million, representing an 11.3% decline on a per square foot basis, as compared to year-end fiscal 2008.

2010 Objectives

To increase shareholder value in fiscal 2010, the Company expects to:

The company expects capital expenditures of approximately $12 million in 2010, compared to capital spending of $8 million in 2009 and depreciation and amortization of approximately $28 million consistent with 2009. International franchisees are expected to open three stores, net of closures, including the Company’s first store in Mexico.

The Company also noted that as previously indicated Joan Ryan has announced her intention to retire from the Build-A-Bear Workshop Board of Directors in fiscal 2010. The Company’s Board has initiated a search for her replacement.

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. EST 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 EST today until midnight EST on March 4, 2010. The telephone replay is available by calling (617) 801-6888. The access code is 99354886.


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. The company currently operates more than 400 Build-A-Bear Workshop stores worldwide, including company-owned stores in the U.S., Puerto Rico, Canada, the United Kingdom, Ireland and France, and franchise stores in Europe, Asia, Australia, Africa and the Middle East. 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 www.buildabearville.com. Build-A-Bear Workshop (NYSE: BBW) posted total revenue of $394.4 million in fiscal 2009. For more information, call 888.560.BEAR (2327) or visit the company’s award-winning Web site 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, and quarterly reports on Form 10-Q for the fiscal quarters ended April 4, 2009 and July 4, 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; 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 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; our consolidated financial results may be significantly affected by changes in foreign currency exchange rates; 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; losses incurred by our affiliate Ridemakerz LLC may adversely affect our financial condition and profitability; 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.

All other brand names, product names, or trademarks belong to their respective holders.


BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
(dollars in thousands, except share and per share data)
       
13 Weeks 14 Weeks
Ended Ended
January 2, % of Total January 3, % of Total
2010 Revenues (1) 2009 Revenues (1)
Revenues:
Net retail sales $ 121,198 98.6 $ 139,855 98.4
Franchise fees 1,200 1.0 1,102 0.8
Licensing revenue 492   0.4   1,156   0.8  
Total revenues 122,890   100.0   142,113   100.0  
Costs and expenses:
Cost of merchandise sold 73,317 60.5 78,823 56.4
Selling, general and administrative 48,009 39.1 55,116 38.8
Store preopening 364 0.3
Store closing 36 0.0
Losses from investment in affiliate 4,490 3.7
Interest expense (income), net (51 ) (0.0 ) (25 ) (0.0 )
Total costs and expenses 125,765   102.3   134,314   94.5  
Income (loss) before income taxes (2,875 ) (2.3 ) 7,799 5.5
Income tax expense (benefit) (1,959 ) (1.6 ) 2,822   2.0
Net income (loss) $ (916 ) (0.7 ) $ 4,977   3.5
 
Earnings (loss) per common share:
Basic $ (0.05 ) $ 0.27  
Diluted $ (0.05 ) $ 0.27  
Shares used in computing common per share amounts:
Basic 18,965,447 18,737,516
Diluted 18,965,447 18,773,221
(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 Statements of Operations
(dollars in thousands, except share and per share data)
       
52 Weeks 53 Weeks
Ended Ended
January 2, % of Total January 3, % of Total
2010 Revenue (1) 2009 Revenue (1)
Revenues:
Net retail sales $ 388,552 98.5 $ 460,963 98.5
Franchise fees 3,353 0.9 4,157 0.9
Licensing revenue 2,470   0.6   2,741   0.6  
Total revenues 394,375   100.0   467,861   100.0  
Costs and expenses:
Cost of merchandise sold 245,980 63.3 270,463 58.7
Selling, general and administrative 161,692 41.0 185,608 39.7
Store preopening 90 0.0 2,410 0.5
Store closing 981 0.2 2,952 0.6
Losses from investment in affiliate 9,615 2.4
Interest expense (income), net (143 ) (0.0 ) (799 ) (0.2 )
Total costs and expenses 418,215   106.0   460,634   98.5  
Income (loss) before income taxes (23,840 ) (6.0 ) 7,227 1.5
Income tax expense (benefit) (11,367 ) (2.9 ) 2,663   0.6
Net income (loss) $ (12,473 ) (3.2 ) $ 4,564   1.0
 
Earnings (loss) per common share:
Basic $ (0.66 ) $ 0.24  
Diluted $ (0.66 ) $ 0.24  
Shares used in computing common per share amounts:
Basic 18,874,352 19,153,123
Diluted 18,874,352 19,224,273
(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 per share data)
   
January 2, January 3,
2010 2009
ASSETS
Current assets:
Cash and cash equivalents $ 60,399 $ 47,000
Inventories 44,384 50,586
Receivables 5,337 8,288
Prepaid expenses and other current assets 19,850 16,151
Deferred tax assets   5,303     3,839  
Total current assets 135,273 125,864
 
Property and equipment, net 101,044 123,193
Goodwill 33,780 30,480
Other intangible assets, net 3,601 3,903
Investment in affiliate - 7,721
Other assets, net   11,766     8,991  
Total Assets $ 285,464   $ 300,152  
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 32,819 $ 37,547
Accrued expenses 11,185 12,593
Gift cards and customer deposits 29,301 29,210
Deferred revenue   8,582     7,634  
Total current liabilities   81,887     86,984  
 
Deferred franchise revenue 2,027 2,033
Deferred rent 34,760 41,714
Other liabilities 2,007 1,696
 
 
Stockholders' equity:
Common stock, par value $0.01 per share 205 195
Additional paid-in capital 80,122 76,852
Accumulated other comprehensive loss (6,336 ) (12,585 )
Retained earnings   90,792     103,263  
Total stockholders' equity   164,783     167,725  
Total Liabilities and Stockholders' Equity $ 285,464   $ 300,152  

BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES
Unaudited Selected Financial and Store Data
(dollars in thousands)
       
13 Weeks 14 Weeks 52 Weeks 53 Weeks
Ended Ended Ended Ended
January 2, January 3, January 2, January 3,
2010 2009 2010 2009
 
Other financial data:
Gross margin ($) (1) $ 47,881 $ 61,032 $ 142,572 $ 190,500
Gross margin (%) (1) 39.5 % 43.6 % 36.7 % 41.3 %
Capital expenditures, net (2) $ 1,497 $ 4,220 $ 8,148 $ 23,215
Depreciation and amortization $ 7,373 $ 7,085 $ 28,487 $ 28,883
Sales over the Internet $ 4,985 $ 4,401 $ 10,950 $ 11,115
 
Store data (3):
Number of company-owned stores at end of period
North America 291 292
Europe 54   54  
Total stores 345 346
 
Number of franchised stores at end of period 65 62
 
Company-owned store square footage at end of period
North America 846,373 856,504
Europe (4) 77,520   77,520  
Total square footage 923,893 934,024
 
Net retail sales per gross square foot - North America (5)
Store Age > 5 years (164 stores in 2009, 145 stores in 2008) $ 372 $ 448
Store Age 3-5 years (62 stores in 2009, 54 stores in 2008) $ 341 $ 455
Store Age <3 years (59 stores in 2009, 73 stores in 2008) $ 333 $ 432
Stores open for the entire period $ 358 $ 445
 
Comparable store sales change - North America (%) (6)
Store Age > 5 years (164 stores in 2009, 145 stores in 2008) (15.1 )% (16.0 )%
Store Age 3-5 years (62 stores in 2009, 54 stores in 2008) (17.7 )% (16.0 )%
Store Age <3 years (59 stores in 2009, 73 stores in 2008) (22.2 )% (20.2 )%
Total comparable store sales change (13.3 )% (19.0 )% (16.7 )% (16.8 )%
 
Comparable store sales change - Europe (%) (6) 4.5 % 6.7 % 5.0 % 7.7 %
 
Comparable store sales change - Consolidated (%) (6) (9.9 )% (15.7 )% (13.4 )% (14.0 )%
(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) Net retail sales per gross square foot represents net retail sales from stores open throughout the entire period divided by the total gross square footage of such stores. Calculated on an annual basis only.
(6) Comparable store sales percentage changes are based on net retail sales and stores are considered comparable beginning in their thirteenth full month of operation.

CONTACT:
Build-A-Bear Workshop
Investors:
Tina Klocke, 314-423-8000 x5210
or
Media:
Jill Saunders, 314-423-8000 x5293