For the first quarter of fiscal 2019:
- Total Revenues increase to $84.4 million from $83.2 million in the
first quarter of fiscal 2018
- Pre-Tax Income rises to $2.4 million from $0.6 million in the first
quarter of fiscal 2018
ST. LOUIS--(BUSINESS WIRE)--May 31, 2019--
Build-A-Bear Workshop, Inc. (NYSE: BBW) today reported results for the
first quarter, 13-weeks ended May 4, 2019.
Sharon Price John, Build-A-Bear Workshop President and Chief Executive
Officer, commented, “We have had a solid start to the year with growth
in total revenues, expansion in gross margin and disciplined expense
management resulting in a $1.8 million increase in first quarter pre-tax
income compared to the same period in the prior fiscal year. Other
highlights in this year’s first quarter include a significant increase
in commercial revenue as strategies to diversify revenue streams by
leveraging the power of our brand continued to gain traction. We also
delivered our sixth consecutive quarter of double-digit e-commerce
growth as initiatives in both gifting and affinity programs gained
momentum. In addition, we continue to focus on our Count Your Candles
birthday program which has consistently driven new guest acquisition and
Bonus Club membership. As we expected, a stronger slate of
family-centric movies had a positive impact on sales of products tied to
the films, and we saw traffic levels at Build-A-Bear Workshop stores
outpace national trends although still slightly negative versus the
prior year. Sales growth in North America was partially offset by
ongoing double-digit sales declines in our largest international market,
the United Kingdom, which is expected to have uncertainty throughout the
year.
“Although we will be up against heavy promotional activity that occurred
last year, we are encouraged by the positive trends thus far in the
second quarter and expect to benefit from additional movie releases
slated throughout the year. Furthermore, we are actively working to
expand a number of key relationships that are expected to positively
impact the business. Overall, we remain confident that the ongoing
implementation of our strategy to leverage the power of the Build-A-Bear
brand will result in long-term profitable growth and enhanced value for
our shareholders,” concluded Ms. John.
First Quarter 2019 Highlights (13 weeks ended May 4, 2019 compared to
the 13 weeks ended May 5, 2018):
-
Total revenues were $84.4 million compared to $83.2 million in the
fiscal 2018 first quarter;
-
Consolidated net retail sales were $81.0 million compared to $81.4
million in the fiscal 2018 first quarter;
-
Retail gross margin expanded 90 basis points to 45.2%, this increase
was mainly driven by merchandise margin expansion and lower occupancy
costs;
-
Selling, general and administrative expenses (“SG&A”) were $35.8
million, or 42.4% of total revenues, compared to $36.3 million, or
43.7% of total revenues, in the fiscal 2018 first quarter;
-
Pre-tax income was $2.4 million compared to $0.6 million in the fiscal
2018 first quarter;
-
Income tax expense was $1.2 million with an effective tax rate of
50.3% compared to $0.3 million with an effective rate of 45.2% in the
fiscal 2018 first quarter. The income tax expense in the first quarter
of fiscal 2019 was higher than the statutory rate primarily because no
tax benefit was recorded on losses in certain foreign jurisdictions;
and
-
Net income was $1.2 million, or $0.08 per diluted share, compared to
$0.4 million, or $0.02 per diluted share, in the fiscal 2018 first
quarter.
Store Activity:
In the first quarter of fiscal 2019, the Company did not open any new
stores, reformatted two stores and closed 5 locations. As of May 4,
2019, the Company operated 366 corporately-managed locations, including
307 in North America and 59 outside of North America. In addition, the
Company ended the first quarter of fiscal 2019 with four seasonal
locations compared to two seasonal locations at the end of the first
quarter of fiscal 2018. The Company’s international franchisees ended
the quarter with 90 stores in 12 countries.
Balance Sheet:
At quarter end, the Company had cash and cash equivalents of $20.2
million, an increase of $1.4 million compared to the prior year quarter
end and had no borrowings under its revolving credit facility. Total
inventory at quarter-end was $56.0 million compared to $49.4 million at
the end of the fiscal 2018 first quarter due to an increase in inventory
related to the timing of new movie launches as well as in-transit
inventory to support new product introductions. In the first quarter of
fiscal 2019, capital expenditures totaled $2.7 million and depreciation
and amortization totaled $3.5 million.
On February 3, 2019, the Company recorded lease liabilities of $177.5
million upon adoption of the new lease accounting standard, also
referred to as ASC Topic 842, based on the present value of remaining
lease payments. A corresponding right-to-use asset of $150.8 million was
recorded on the balance sheet which was net of accrued and prepaid rent,
deferred lease incentives and impairment charges. Impairment charges of
$7.4 million (net of tax) were recorded as a reduction to retained
earnings in adopting the new standard. The recognition of rent expense
and payments associated with these lease assets and liabilities will not
result in material differences to operating income or cash flows
compared to the previous accounting rules, nor does it impact the
Company’s bank agreement covenants.
Fiscal 2019 (52 weeks ended February 1, 2020 compared to the 52 weeks
ended February 2, 2019)GAAP Expectations for the Company
currently include:
-
Total revenues to increase in the range of mid- to high-single digits;
-
Pre-tax income to be slightly positive, reflecting the increased sales
as well as improved gross profit margin;
-
Capital expenditures to be in the range of $13 to $15 million; and
-
Depreciation and amortization to be in the range of $15 to $17 million.
The Company notes that the above guidance assumes that there are no
material changes to current tariff rates or policies.
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 website, http://IR.buildabear.com.
The call is expected to conclude by 10 a.m. ET.
A replay of the conference call webcast will be available in the
investor relations website for one year. A telephone replay will be
available beginning at approximately noon ET today until midnight ET on
June 7, 2019. The telephone replay is available by calling (844)
512-2921. The access code is 13691030.
About Build-A-Bear:
Build-A-Bear is a global brand kids love and parents trust that seeks to
add a little more heart to life. Build-A-Bear Workshop has more than 450
stores worldwide where Guests can create customizable furry friends,
including corporately-managed stores in the United States, Canada,
China, Denmark, Ireland, Puerto Rico, and the United Kingdom, and
franchise stores in Africa, Asia, Australia, Europe, Mexico and the
Middle East. Build-A-Bear Workshop, Inc. (NYSE:BBW) posted total revenue
of $336.6 million in fiscal 2018. For more information, visit the
Investor Relations section of buildabear.com.
Forward-Looking Statements:
This press release contains certain statements that are, or may be
considered to be, “forward-looking statements” for the purpose of
federal securities laws, including, but not limited to, statements that
reflect our current views with respect to future events and financial
performance. We generally identify these statements by words or phrases
such as “may,” “might,” “should,” “expect,” “plan,” “anticipate,”
“believe,” “estimate,” “intend,” “predict,” “future,” “potential” or
“continue,” the negative or any derivative of these terms and other
comparable terminology. All of the information concerning our future
liquidity, future revenues, margins and other future financial
performance and results, achievement of operating of financial plans or
forecasts for future periods, sources and availability of credit and
liquidity, future cash flows and cash needs, success and results of
strategic initiatives and other future financial performance or
financial position, as well as our assumptions underlying such
information, constitute forward-looking information.
These statements are based only on our current expectations and
projections about future events. Because these forward-looking
statements involve risks and uncertainties, there are important factors
that could cause our actual results, level of activity, performance or
achievements to differ materially from the results, level of activity,
performance or achievements expressed or implied by these
forward-looking statements, including those factors discussed under the
caption entitled “Risks Related to Our Business” and “Forward-Looking
Statements” in our Annual Report on Form 10-K filed with the Securities
and Exchange Commission (“SEC”) on April 18, 2019 and other periodic
reports filed with the SEC which are incorporated herein.
All of our forward-looking statements are as of the date of this Press
Release only. In each case, actual results may differ materially from
such forward-looking information. We can give no assurance that such
expectations or forward-looking statements will prove to be correct. An
occurrence of or any material adverse change in one or more of the risk
factors or other risks and uncertainties referred to in this Press
Release or included in our other public disclosures or our other
periodic reports or other documents or filings filed with or furnished
to the SEC could materially and adversely affect our continuing
operations and our future financial results, cash flows, available
credit, prospects and liquidity. Except as required by law, the Company
does not undertake to publicly update or revise its 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 |
|
|
|
|
|
|
13 Weeks |
|
|
|
|
|
Ended |
|
|
|
|
|
|
Ended |
|
|
|
|
|
May 4, |
|
% of Total |
|
|
May 5, |
|
% of Total
|
|
|
|
2019 |
|
Revenues (1) |
|
|
2018 |
|
Revenues (1) |
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net retail sales
|
|
$
|
81,048
|
|
96.0
|
|
|
|
$
|
81,425
|
|
97.9
|
Commercial revenue
|
|
|
2,754
|
|
3.3
|
|
|
|
|
1,019
|
|
1.2
|
International franchising
|
|
|
560
|
|
0.7
|
|
|
|
|
740
|
|
0.9
|
Total revenues
|
|
|
84,362
|
|
100.0
|
|
|
|
|
83,184
|
|
100.0
|
Cost of merchandise sold:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of merchandise sold - retail (1) |
|
|
44,421
|
|
54.8
|
|
|
|
|
45,385
|
|
55.7
|
Cost of merchandise sold - commercial (1) |
|
|
1,264
|
|
45.9
|
|
|
|
|
479
|
|
47.0
|
Cost of merchandise sold - international franchising (1) |
|
|
439
|
|
78.4
|
|
|
|
|
332
|
|
44.9
|
Total cost of merchandise sold
|
|
|
46,124
|
|
54.7
|
|
|
|
|
46,196
|
|
55.5
|
Consolidated gross profit
|
|
|
38,238
|
|
45.3
|
|
|
|
|
36,988
|
|
44.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expense
|
|
|
35,808
|
|
42.4
|
|
|
|
|
36,337
|
|
43.7
|
Interest expense, net
|
|
|
20
|
|
0.0
|
|
|
|
|
5
|
|
0.0
|
Income (loss) before income taxes
|
|
|
2,410
|
|
2.9
|
|
|
|
|
646
|
|
0.8
|
Income tax expense
|
|
|
1,213
|
|
1.4
|
|
|
|
|
292
|
|
0.4
|
Net income (loss)
|
|
$
|
1,197
|
|
1.4
|
|
|
|
$
|
354
|
|
0.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.08
|
|
|
|
|
|
$
|
0.02
|
|
|
Diluted
|
|
$
|
0.08
|
|
|
|
|
|
$
|
0.02
|
|
|
Shares used in computing common per share amounts:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
14,612,575
|
|
|
|
|
|
|
14,582,573
|
|
|
Diluted
|
|
|
14,738,240
|
|
|
|
|
|
|
14,722,989
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Selected statement of operations data expressed as a percentage of
total revenues, except cost of merchandise sold - retail, cost of
merchandise sold - commercial and cost of merchandise sold -
international franchising that are expressed as a percentage of net
retail sales, commercial revenue and international franchising,
respectively. Percentages will not total due to cost of merchandise
sold being expressed as a percentage of net retail sales, commercial
revenue or international franchising and immaterial rounding.
|
|
|
|
|
|
|
BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES |
Unaudited Condensed Consolidated Balance Sheets |
(dollars in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
May 4, |
|
February 2, |
|
May 5, |
|
|
2019 |
|
2019 |
|
2018 |
ASSETS |
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
20,238
|
|
|
$
|
17,894
|
|
|
$
|
18,881
|
|
Inventories, net
|
|
|
56,004
|
|
|
|
58,356
|
|
|
|
49,423
|
|
Receivables, net
|
|
|
8,836
|
|
|
|
10,588
|
|
|
|
8,968
|
|
Prepaid expenses and other current assets
|
|
|
8,587
|
|
|
|
12,960
|
|
|
|
11,493
|
|
Total current assets
|
|
|
93,665
|
|
|
|
99,798
|
|
|
|
88,765
|
|
|
|
|
|
|
|
|
Operating lease right-of-use asset
|
|
|
145,025
|
|
|
|
-
|
|
|
|
-
|
|
Property and equipment, net
|
|
|
65,357
|
|
|
|
66,368
|
|
|
|
76,410
|
|
Deferred tax assets
|
|
|
3,241
|
|
|
|
3,099
|
|
|
|
4,102
|
|
Other intangible assets, net
|
|
|
607
|
|
|
|
731
|
|
|
|
950
|
|
Other assets, net
|
|
|
2,224
|
|
|
|
2,050
|
|
|
|
2,427
|
|
Total Assets
|
|
$
|
310,119
|
|
|
$
|
172,046
|
|
|
$
|
172,654
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
Current liabilities:
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
20,996
|
|
|
$
|
22,551
|
|
|
$
|
12,965
|
|
Accrued expenses
|
|
|
7,608
|
|
|
|
10,047
|
|
|
|
8,739
|
|
Operating lease liability short term
|
|
|
29,769
|
|
|
|
-
|
|
|
|
-
|
|
Gift cards and customer deposits
|
|
|
19,026
|
|
|
|
21,643
|
|
|
|
17,007
|
|
Deferred revenue and other
|
|
|
2,006
|
|
|
|
1,936
|
|
|
|
1,893
|
|
Total current liabilities
|
|
|
79,405
|
|
|
|
56,177
|
|
|
|
40,604
|
|
|
|
|
|
|
|
|
Operating lease liability long term
|
|
|
139,407
|
|
|
|
-
|
|
|
|
-
|
|
Deferred rent liability long term
|
|
|
-
|
|
|
|
18,440
|
|
|
|
17,697
|
|
Deferred franchise revenue
|
|
|
1,580
|
|
|
|
1,625
|
|
|
|
1,142
|
|
Other liabilities
|
|
|
1,287
|
|
|
|
1,490
|
|
|
|
1,794
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
Common stock, par value $0.01 per share
|
|
|
149
|
|
|
|
150
|
|
|
|
151
|
|
Additional paid-in capital
|
|
|
69,550
|
|
|
|
69,088
|
|
|
|
66,908
|
|
Accumulated other comprehensive loss
|
|
|
(12,120
|
)
|
|
|
(12,018
|
)
|
|
|
(11,546
|
)
|
Retained earnings
|
|
|
30,861
|
|
|
|
37,094
|
|
|
|
55,904
|
|
Total stockholders' equity
|
|
|
88,440
|
|
|
|
94,314
|
|
|
|
111,417
|
|
Total Liabilities and Stockholders' Equity
|
|
$
|
310,119
|
|
|
$
|
172,046
|
|
|
$
|
172,654
|
|
|
|
|
|
|
|
|
|
BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES |
Unaudited Selected Financial and Store Data |
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
13 Weeks |
|
|
13 Weeks |
|
|
|
Ended |
|
|
Ended |
|
|
|
May 4, |
|
|
May 5, |
|
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
Other financial data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail gross margin ($) (1) |
|
$
|
36,627
|
|
|
$
|
36,040
|
|
Retail gross margin (%) (1) |
|
|
45.2
|
%
|
|
|
44.3
|
%
|
Capital expenditures (2) |
|
$
|
2,733
|
|
|
$
|
3,030
|
|
Depreciation and amortization
|
|
$
|
3,512
|
|
|
$
|
4,115
|
|
|
|
|
|
|
|
|
Store data (3): |
|
|
|
|
|
|
Number of corporately-managed retail locations at end of period
|
|
|
|
|
|
|
North America
|
|
|
307
|
|
|
|
292
|
|
Europe
|
|
|
58
|
|
|
|
57
|
|
Asia
|
|
|
1
|
|
|
|
1
|
|
Total corporately-managed retail locations
|
|
|
366
|
|
|
|
350
|
|
|
|
|
|
|
|
|
Number of franchised stores at end of period
|
|
|
90
|
|
|
|
96
|
|
|
|
|
|
|
|
|
Corporately-managed store square footage at end of period (4) |
|
|
|
|
|
|
North America
|
|
|
712,782
|
|
|
|
715,197
|
|
Europe
|
|
|
83,344
|
|
|
|
79,236
|
|
Asia
|
|
|
1,750
|
|
|
|
1,750
|
|
Total square footage
|
|
|
797,876
|
|
|
|
796,183
|
|
|
(1)
|
|
Retail gross margin represents net retail sales less cost of
merchandise sold - retail. Retail gross margin percentage represents
retail gross margin divided by net retail sales. Store impairment is
excluded from retail gross margin.
|
(2)
|
|
Capital expenditures represents cash paid for property, equipment,
other assets and other intangible assets.
|
(3)
|
|
Excludes e-commerce. North American stores are located in the United
States, Canada and Puerto Rico. In Europe, stores are located in the
United Kingdom, Ireland and Denmark. In Asia, the store is located
in China. Seasonal locations not included in store count.
|
(4)
|
|
Square footage for stores located in North America is leased square
footage. Square footage for stores located in Europe is estimated
selling square footage. Seasonal locations not included in the store
count.
|
|
|
|

View source version on businesswire.com: https://www.businesswire.com/news/home/20190531005108/en/
Source: Build-A-Bear Workshop, Inc.
Investors: Voin Todorovic Build-A-Bear Workshop (314)
423-8000 x5221
Media: PR@buildabear.com
|