UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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) July 28, 2005
Build-A-Bear Workshop, Inc.
-------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Delaware 001-32320 43-1883836
- --------------- ------------- -------------------
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
1954 Innerbelt Business Center Drive 63114
St. Louis, Missouri --------------
----------------------------------------- (Zip Code)
(Address of Principal Executive Offices)
(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 (see General Instruction A.2. below):
|_| 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 July 28, 2005, Build-A-Bear Workshop, Inc. (the "Company") issued a
press release announcing, among other things, total revenue, net income, net
retail sales, gross margin and diluted earnings per share for the second quarter
of fiscal 2005. The press release also included expected earnings and diluted
earnings per share for the full year of fiscal 2005. 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.
In response to the request of certain investors and analysts for access to
historical quarterly financial information and store data in order that they may
perform various financial analyses, we are providing quarterly financial
information for fiscal years 2003 and 2004 as Exhibit 99.2 hereto. As a result
of becoming a public company in October 2004, portions of this quarterly
information has not heretofore been available in publicly accessible reports.
This financial information and selected store data has been prepared by
management without the review of an independent registered public accounting
firm. This information is condensed in nature and does not contain all of the
information normally included in financial statements prepared in accordance
with U.S. generally accepted accounting principles.
As previously disclosed, the Company determined, on February 25, 2005, that
it would correct its then current method of accounting for rent holidays and
landlord allowances in connection with its store and headquarters leases and
restate prior period results. Please see the Company's annual report on Form
10-K filed with the Securities and Exchange Commission on March 29, 2005 for
further information. All financial information included in Exhibit 99.2 hereto
has been restated to reflect the impact of the changes noted above. The
financial information for periods that were publicly presented prior to the
restatement has been marked as restated in Exhibit 99.2.
Item 9.01 Financial Statements and Exhibits.
- ----------------------------------------------------
(c) Exhibits
Exhibit Number Description of Exhibit
- -------------- ----------------------
99.1 Press Release dated July 28, 2005
99.2 Interim financial information for the Company's 2003 and 2004
fiscal years.
2
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: July 28, 2005 By: /s/ Tina Klocke
-----------------------------------
Name: Tina Klocke
Title: Chief Financial Bear, Secretary
and Treasurer
3
EXHIBIT INDEX
Exhibit Number Description of Exhibit
- -------------- ----------------------
99.1 Press Release dated July 28, 2005
99.2 Interim financial information for the Company's 2003 and 2004
fiscal years.
4
Exhibit 99.1
Build-A-Bear Workshop, Inc. Reports Fiscal 2005 Second Quarter Results
ST. LOUIS--(BUSINESS WIRE)--July 28, 2005--Build-A-Bear Workshop,
Inc. (NYSE: BBW):
-- Earnings per diluted share were $0.17, include $0.03 per
diluted share for flagship store preopening costs.
-- First half net income increased 12% to $11.5 million or $0.57
per diluted share and includes $0.05 for flagship store
preopening costs.
-- Maintains guidance of 26% to 32% net income growth for fiscal
2005.
Build-A-Bear Workshop, Inc. (NYSE: BBW), an interactive
entertainment retailer of customized stuffed animals, today announced
earnings results for the fiscal 2005 second quarter and confirmed
earnings guidance for the full year.
Total revenue for the fiscal 2005 second quarter (13 weeks ended
July 2, 2005) was $73.7 million, compared to $66.1 million in the
prior year's second quarter (13 weeks ended July 3, 2004). Second
quarter net income of $3.5 million, or $0.17 per diluted share, on
20.2 million diluted shares outstanding, includes $0.03 per diluted
share of preopening costs related to the Company's new flagship store
in New York City. In the second fiscal quarter of 2004, the Company
reported net income of $4.9 million, or $0.27 per diluted share, on
18.0 million diluted shares outstanding.
The Company also reiterated full year net earnings guidance of
$1.24 to $1.30 per diluted share.
"Strong new store sales performance combined with continued high
merchandise margins helped drive our solid results in the second
quarter," said Chairman and Chief Executive Bear, Maxine Clark. "We
have opened 16 new Build-A-Bear Workshop stores through the first half
of this year compared to eight in the first half of 2004. One of the
keys to our continued growth is the sales and margins we are able to
generate from new stores. That was certainly the case this quarter,
and we remain confident that with the openings we plan for the second
half, the planned higher spending on brand building and marketing, and
ongoing expense control, we can grow full year net income by 26% to
32%."
Fiscal 2005 Second Quarter
Fiscal 2005 second quarter total revenue includes net retail sales
of $73.3 million, an increase of $7.4 million or 11.2% compared to
last year's second quarter. Net retail sales growth was primarily
driven by the addition of new stores opened during the past twelve
months partially offset by a decline in comparable store sales of
6.9%. Second quarter total revenue includes international franchise
fees and third-party licensing revenue totaling $420,000, an increase
of $230,000 compared to last year's second quarter.
The second quarter net income reflected higher store preopening
costs and the impact of comparable store sales declines on costs and
expenses, partially offset by the impact of higher new store sales and
increased interest income. Gross margin rate declined to 46.8% from
48.2% in the fiscal 2004 second quarter. Selling, general and
administrative expense as a percent of total revenue increased to
37.4% from 35.8% as store payroll expense increased as a percent of
revenue. Store preopening expense increased due to higher costs
associated with the New York City flagship store opening, which
totaled $0.9 million pretax, or $0.03 per diluted share, in the second
quarter.
Second quarter 2005 was negatively affected when compared to the
comparable quarter of last year because of the shift in the Easter
holiday and associated school vacations, an important selling time for
the company. In 2005, Easter sales were included in the first quarter;
in 2004 Easter sales were included in the second quarter. Sales
comparisons are also impacted by the Company's appearance on a
syndicated talk show in February 2004 which had a positive impact on
2004 sales.
During the 2005 second quarter, the company opened 13 new
Build-A-Bear Workshop(R) (BABW) retail stores in the United States and
Canada, as planned, compared with opening seven new BABW stores during
the 2004 second quarter. These new stores bring the total number of
BABW stores at the end of the second quarter to 179 in the United
States and 7 in Canada. During the quarter international franchisees
opened four new international stores; international stores totaled 16
at the end of the second quarter.
On July 8, the Company officially opened its New York City
flagship store located on 5th Avenue at 46th Street.
Total revenue for the fiscal 2005 first half (26 weeks ended July
2, 2005) was $159.8 million, up 17.7% compared to $135.7 million in
the 2004 first half (26 weeks ended July 3, 2004). First half net
income of $11.5 million, or $0.57 per diluted share, on 20.2 million
diluted shares outstanding, includes $0.05 per diluted share of
flagship store preopening costs. In the first half of 2004, the
Company reported net income of $10.2 million, or $0.57 per diluted
share, on 17.9 million diluted shares outstanding.
Build-A-Bear Workshop expects to open a total of 30 new BABW
stores in the United States and Canada in fiscal 2005. Plans also
include opening three new friends 2B made stores. International
franchisees expect to open a total of 20 to 25 new stores in fiscal
2005.
Outlook
The Company also re-confirmed its guidance for fiscal 2005 (52
weeks ended Dec. 31, 2005) net income in the range of $25.1 million to
$26.3 million, representing net income growth of 26% to 32% compared
to fiscal 2004. Diluted earnings per share (EPS) are expected to be in
the range of $1.24 to $1.30. Comparable store sales for the year are
expected to be flat with 2004.
The Company expects to begin expensing stock-based compensation in
the first quarter of fiscal 2006 as required by SFAS 123R, Share-Based
Payment.
Today's Conference Call Webcast
Today at 10:00 a.m. EDT, Build-A-Bear Workshop(R) will host a live
audio webcast of its discussion with the investment community
regarding the company's fiscal 2005 second quarter results. The
webcast can be accessed at http://ir.buildabear.com. Following the
live discussion, a replay of the webcast will be available until the
next quarterly conference call.
About Build-A-Bear Workshop, Inc.
Build-A-Bear Workshop, Inc. (NYSE: BBW), with fiscal 2004 total
revenue of $302 million, is the only national company that offers
Guests an interactive make-your-own-stuffed animal
retail-entertainment experience. The first store opened in St. Louis
in 1997; the company currently operates over 190 stores in the United
States and Canada. With the opening of its store in Sheffield,
England, in the fall of 2003 and the addition of international stores
in Japan, Denmark, Australia, South Korea and France, Build-A-Bear
Workshop has become the global leader in the teddy bear business. In
November 2004, the company opened two friends 2B made(R) stores, the
newest concept based on the doll-making experience. For more
information about the company and its products, call 888.560.BEAR
(2327) or visit the company's award-winning Web site at
www.buildabear.com.
Forward-Looking Statements
Statements in this news release expressing or indicating the
beliefs and expectations of management regarding future performance
are forward-looking statements including, without limitation, company
financial performance, sales growth, new store openings, any other
plans, objectives, expectations and intentions contained in this
release that are not historical facts. These statements reflect our
current views with respect to future events and are based on
assumptions and subject to risks and uncertainties. These risks and
uncertainties include, without limitation, those detailed in our 2004
annual report on Form 10-K filed with the SEC on March 29, 2005 under
the caption "Risk Factors" and the following: (1) we may be unable to
generate comparable store sales growth; (2) our marketing initiatives
may not be effective in generating sufficient levels of brand
awareness and Guest traffic; (3) we may be unable open new stores to
effectively manage our growth; (4) we may be unable to effectively
manage our international franchises or laws relating to those
franchises may change; (5) 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; (6) customer
traffic may decrease in the shopping malls where we are located, on
which we depend to attract Guests to our stores; (7) general economic
conditions may decrease, which could lead to reduced consumer demand
for our products; (8) our market share could be adversely affected by
a significant number of competitors; (9) we may lose key personnel, be
unable to hire qualified additional personnel, or experience turnover
of our management team; (10) the ability of our principal vendors to
deliver merchandise may be disrupted; (11) the availability and costs
of our products could be adversely affected by risks associated with
international manufacturing and trade; (12) third parties that manage
our warehousing and distribution functions may perform poorly; (13) we
may fail to renew, register or otherwise protect our trademarks or
other intellectual property; (14) we may have disputes with, or be
sued by, third parties for infringement or misappropriation of their
proprietary rights; (15) we may be unable to renew or replace our
store leases, or enter into leases for new stores on favorable terms,
or may violate the terms of our current leases; (16) we may experience
failures in our communications or information systems; (17) terrorism
or the uncertainty of future terrorist attacks or war could reduce
consumer confidence and mall traffic; (18) we may become subject to
challenges relating to overtime pay or other regulations relating to
our employees; (19) we may suffer negative publicity or be sued due to
violations of labor laws or unethical practices by manufacturers of
our merchandise, and (20) we may improperly obtain or be unable to
protect information from our Guests in violation of privacy or
security laws or expectations.
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. We do not undertake any
obligation or plan to update these forward-looking statements, even
though our situation may change.
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 % of Total Ended % of Total
July 2, Revenues July 3, Revenues
2005 (1) 2004 (1)
---------- ---------- ---------- ----------
Revenues:
Net retail sales $ 73,279 99.4 % $ 65,925 99.7 %
Franchise fees 334 0.5 190 0.3
Licensing revenue 86 0.1 -- 0.0
---------- ---------- ---------- ----------
Total revenues 73,699 100.0 66,115 100.0
---------- ---------- ---------- ----------
Costs and expenses:
Cost of merchandise sold 38,951 53.2 34,124 51.8
Selling, general and
administrative 27,555 37.4 23,639 35.8
Store preopening 1,929 2.6 493 0.7
Interest expense
(income), net (378) (0.5) (59) (0.1)
---------- ---------- ---------- ----------
Total costs and
expenses 68,057 92.3 58,197 88.0
---------- ---------- ---------- ----------
Income before income
taxes 5,642 7.7 7,918 12.0
Income tax expense 2,147 2.9 3,009 4.6
---------- ---------- ---------- ----------
Net income 3,495 4.7 4,909 7.4
Cumulative dividends and
accretion of redeemable
preferred stock -- 493
Cumulative dividends of
nonredeemable preferred
stock -- 114
---------- ----------
Net income available to
common and participating
preferred stockholders $ 3,495 $ 4,302
========== ==========
Net income allocated to
common stockholders $ 3,495 $ 153
========== ==========
Net income allocated to
participating preferred
stockholders $ -- $ 4,149
========== ==========
Earnings per common share:
Basic $ 0.18 $ 0.44
========== ==========
Diluted $ 0.17 $ 0.27
========== ==========
Shares used in computing
common per share amounts:
Basic 19,801,598 351,944
Diluted 20,223,601 18,021,047
(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)
26 Weeks 26 Weeks
Ended % of Total Ended % of Total
July 2, Revenues July 3, Revenues
2005 (1) 2004 (1)
--------------------- ---------------------
Revenues: (restated)
Net retail sales $ 159,002 99.5 % $ 135,420 99.8 %
Franchise fees 640 0.4 307 0.2
Licensing revenue 116 0.1 -- 0.0
---------- ---------- ---------- ----------
Total revenues 159,758 100.0 135,727 100.0
---------- ---------- ---------- ----------
Costs and expenses:
Cost of merchandise sold 81,558 51.3 70,046 51.7
Selling, general and
administrative 57,190 35.8 48,632 35.8
Store preopening 3,117 2.0 705 0.5
Interest expense
(income), net (746) (0.5) (98) (0.1)
---------- ---------- ---------- ----------
Total costs and
expenses 141,119 88.3 119,285 87.9
---------- ---------- ---------- ----------
Income before income
taxes 18,639 11.7 16,442 12.1
Income tax expense 7,176 4.5 6,248 4.6
---------- ---------- ---------- ----------
Net income 11,463 7.2 10,194 7.5
Cumulative dividends and
accretion of redeemable
preferred stock -- 985
Cumulative dividends of
nonredeemable preferred
stock -- 228
---------- ----------
Net income available to
common and participating
preferred stockholders $ 11,463 $ 8,981
========== ==========
Net income allocated to
common stockholders $ 11,463 $ 261
========== ==========
Net income allocated to
participating preferred
stockholders $ -- $ 8,720
========== ==========
Earnings per common share:
Basic $ 0.59 $ 0.92
========== ==========
Diluted $ 0.57 $ 0.57
========== ==========
Shares used in computing
common per share amounts:
Basic 19,538,111 284,731
Diluted 20,173,764 17,938,328
(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)
July 2, January 1, July 3,
2005 2005 2004
---------- ---------- ----------
ASSETS
Current assets: (restated)
Cash and cash equivalents $ 47,961 $ 67,327 $ 26,315
Inventories 35,806 30,791 29,948
Receivables 4,752 3,792 1,875
Prepaid expenses and other current
assets 8,493 5,320 4,501
Deferred tax assets 2,958 2,725 2,030
---------- ---------- ----------
Total current assets 99,970 109,955 64,669
Property and equipment, net 83,730 75,815 73,079
Goodwill - - 97
Other intangible assets, net 1,259 1,411 1,484
Other assets, net 2,184 2,056 1,989
---------- ---------- ----------
Total Assets $ 187,143 $ 189,237 $141,318
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 17,205 $ 25,767 $21,367
Accrued expenses 4,932 13,966 9,981
Other current liabilities 17,078 22,222 11,675
---------- ---------- ----------
Total current liabilities 39,215 61,955 43,023
---------- ---------- ----------
Deferred franchise revenue 2,177 2,075 1,864
Deferred rent 29,677 26,426 24,372
Other liabilities 659 732 803
Deferred tax liabilities 3,996 2,539 3,362
Redeemable preferred stock, at
redemption price - - 38,875
Stockholders' equity:
Nonredeemable preferred stock,
at par value - - 94
Common stock, par value $0.01
per share 199 196 7
Additional paid-in capital 81,561 77,708 10,928
Retained earnings 30,849 19,386 19,858
Notes receivable from officers (148) (1,770) (1,868)
Unearned compensation (1,042) (10) -
---------- ---------- ----------
Total stockholders' equity 111,419 95,510 29,019
---------- ---------- ----------
Total Liabilities and Stockholders'
Equity $ 187,143 $ 189,237 $ 141,318
========== ========== ==========
BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Cash Flows
(dollars in thousands)
26 Weeks 26 Weeks
Ended Ended
July 2, July 3,
2005 2004
---------- ----------
(restated)
Cash flows from operating activities:
Net income $ 11,463 $ 10,194
Adjustments to reconcile net income to
net cash from operating activities:
Depreciation and amortization 8,517 7,125
Deferred taxes 1,224 (357)
Tax benefit from exercise of non-qualified
options 2,095 410
Loss on disposal of property and equipment 209 142
Stock-based compensation 215 94
Change in assets and liabilities:
Inventories (5,015) (7,375)
Receivables (945) 288
Prepaid expenses and other current assets (3,173) (286)
Accounts payable (8,562) (455)
Accrued expenses and other liabilities (13,109) 2,723
---------- ----------
Net cash provided (used) by operating
activities (7,081) 12,503
---------- ----------
Cash flows from investing activities:
Purchases of property and equipment (16,091) (6,132)
Proceeds from sale of property and equipment 24 -
Purchases of other assets (565) (657)
---------- ----------
Net cash used in investing activities (16,632) (6,789)
---------- ----------
Cash flows from financing activities:
Exercise of employee stock options and
employee stock purchases 2,702 -
Collection of note receivable from officer 1,645 -
---------- ----------
Net cash provided by financing
activities 4,347 -
---------- ----------
Net increase (decrease) in cash and cash
equivalents (19,366) 5,714
Cash and cash equivalents, beginning of period 67,327 20,601
---------- ----------
Cash and cash equivalents, end of period $ 47,961 $ 26,315
========== ==========
BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES
Unaudited Selected Financial and Store Data
(dollars in thousands, except square foot data)
13 Weeks 13 Weeks 26 Weeks 26 Weeks
Ended Ended Ended Ended
July 2, July 3, July 2, July 3,
2005 2004 2005 2004
---------- ---------- ---------- ----------
Other financial data:
Gross margin ($) (1) $ 34,328 31,801 $ 77,444 65,374
Gross Margin (%) (1) 46.8% 48.2% 48.7% 48.3%
Capital expenditures (2) $ 10,590 3,729 $ 16,091 6,132
Depreciation and
amortization $ 4,352 3,582 $ 8,517 7,125
Store data (3):
Number of stores at end
of period 186 157
Store square footage at
end of period 575,682 479,042
Comparable store sales
change (%) (4) (6.9)% 12.9% (0.6)% 13.8%
(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 consist of leasehold improvements, furniture
and fixtures, and computer equipment and software purchases.
(3) Excludes our webstore and seasonal and event-based locations.
(4) 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, Inc.
Investors:
Molly Salky, 314-423-8000, Ext. 5353
or
Media:
Jill Saunders, 314-423-8000, Ext. 5293
Website: www.buildabear.com
Exhibit 99.2
BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
(dollars in thousands, except share and per share data)
March 29, June 28, September 27, January 3,
2003 2003 2003 2004
-------------- ------------- -------------- --------------
ASSETS
Current assets:
Cash and cash equivalents $8,563 $3,685 $4,027 $20,601
Inventories 20,684 21,613 19,286 22,573
Receivables 635 1,843 2,745 2,163
Prepaid expenses and other current
assets 994 926 2,908 4,215
Deferred tax assets 1,999 1,981 2,213 1,531
-------------- ------------- -------------- --------------
Total current assets 32,875 30,048 31,179 51,083
Property and equipment, net 62,516 67,809 72,919 73,635
Goodwill 197 297 97 97
Other intangible assets 1,245 1,241 1,254 1,493
Other assets, net 1,583 1,693 1,827 1,902
-------------- ------------- -------------- --------------
Total Assets $98,416 $101,088 $107,276 $128,210
============== ============= ============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $14,106 $15,403 $15,348 $21,822
Accrued expenses 3,887 2,468 2,794 6,366
Other current liabilities 8,050 7,978 8,437 12,432
-------------- ------------- -------------- --------------
Total current liabilities 26,043 25,849 26,579 40,620
-------------- ------------- -------------- --------------
Deferred franchise revenue 938 989 1,530 1,957
Deferred rent 17,600 19,777 22,863 23,801
Other liabilities - - - 877
Deferred tax liabilities 2,399 2,719 3,824 3,220
Minority interest 5 5 - -
Redeemable preferred stock, at
redemption price 36,412 36,905 37,397 37,890
Stockholders' equity:
Nonredeemable preferred stock, at par
value 94 94 94 94
Common stock, par value $0.01 per
share. 5 5 5 5
Additional paid-in capital 10,843 10,866 10,895 10,918
Retained earnings 5,828 5,653 5,887 10,649
Notes receivable from officers (1,751) (1,774) (1,798) (1,821)
-------------- ------------- -------------- --------------
Total stockholders' equity 15,019 14,844 15,083 19,845
-------------- ------------- -------------- --------------
Total Liabilities and Stockholders'
Equity $98,416 $101,088 $107,276 $128,210
============== ============= ============== ==============
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 13 Weeks 14 Weeks
Ended Ended Ended Ended
March 29, June 28, September 27, January 3,
2003 2003 2003 2004
------------- ------------- -------------- -------------
(restated)
Revenues:
Net retail sales $47,810 $44,678 $47,904 $73,035
Franchise fees 48 48 59 90
------------- ------------- -------------- -------------
Total revenues 47,858 44,726 47,963 73,125
------------- ------------- -------------- -------------
Costs and expenses:
Costs of merchandise sold 26,255 25,536 27,418 37,078
Selling, general, and administrative 18,920 17,164 17,846 27,161
Store preopening 478 1,495 1,514 372
Interest expense (income), net (36) (18) (7) 3
------------- ------------- -------------- -------------
Total costs and expenses 45,617 44,177 46,771 64,614
------------- ------------- -------------- -------------
Income before income taxes 2,241 549 1,192 8,511
Income tax expense 920 232 466 3,257
------------- ------------- -------------- -------------
Net income 1,321 317 726 5,254
Cumulative dividends and accretion of
redeemable preferred stock 493 492 493 492
Cumulative dividends of nonredeemable
preferred stock 114 114 114 113
------------- ------------- -------------- -------------
Net income available to common and
participating preferred stockholders $714 $(289) $119 $4,649
============= ============= ============== =============
Net income allocated to common stockholders $16 $(289) $3 $104
============= ============= ============== =============
Net income allocated to participating
preferred stockholders $698 $- $116 $4,545
============= ============= ============== =============
Earnings per common share:
Basic $0.07 $(1.33) $0.01 $0.48
============= ============= ============== =============
Diluted $0.07 $(1.33) $0.01 $0.30
============= ============= ============== =============
Shares used in computing common per share amounts:
Basic 217,519 217,519 217,519 217,519
Diluted 11,585,795 217,519 9,365,119 17,759,083
Store data
(1):
Number of stores at end of period 109 123 143 150
Store square footage at end of period 347,486 388,853 443,142 462,484
Comparable store sales change (%) (2) (17.4)% (15.6)% (19.0)% (12.5)%
(1) Excludes our webstore and seasonal and event-based locations.
(2) Comparable store sales percentage changes are based on net retail sales and
stores are considered comparable beginning in their thirteenth full month
of operation.
BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Cash Flows
(dollars in thousands)
13 Weeks 26 Weeks 39 Weeks 53 Weeks
Ended Ended Ended Ended
March 29, June 28, September 27, January 3,
2003 2003 2003 2004
-------------- -------------- ------------------------------
(restated) (restated)
Cash flows from operating activities:
Net income $1,321 $1,638 $2,364 $7,618
Adjustments to reconcile net income to
net cash from operating activities:
Depreciation and amortization 2,745 5,701 8,949 12,840
Deferred taxes 105 442 1,315 1,394
Loss on disposal of property and equipment 63 63 159 340
Impairment of goodwill - - 200 200
Change in assets and liabilities:
Inventories 886 (42) 2,284 (1,002)
Receivables 1,577 368 (533) 49
Prepaid expenses and other current assets (175) (107) (324) (3,397)
Accounts payable (3,233) (1,936) (1,991) 4,483
Accrued expenses and other liabilities (5,713) (4,976) (2,329) 9,245
-------------- -------------- ------------------------------
Net cash provided by operating activities (2,424) 1,151 10,094 31,770
-------------- -------------- ------------------------------
Cash flows from investing activities:
Purchases of property and equipment (4,534) (12,517) (20,690) (24,917)
Purchases of other assets (243) (615) (1,043) (1,918)
Purchase of minority interest in subsidiary (100) (200) (200) (200)
-------------- -------------- ------------------------------
Net cash used in investing activities (4,877) (13,332) (21,933) (27,035)
-------------- -------------- ------------------------------
Cash flows from financing activities:
-------------- -------------- ------------------------------
Net cash provided by financing activities - - - -
-------------- -------------- ------------------------------
Net increase in cash and cash equivalents (7,301) (12,181) (11,839) 4,735
Cash and cash equivalents, beginning of period 15,866 15,866 15,866 15,866
-------------- -------------- ------------------------------
Cash and cash equivalents, end of period $8,565 $3,685 $4,027 $20,601
============== ============== ==============================
BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
(dollars in thousands, except share and per share data)
April 3, July 3, October 2, January 1,
2004 2004 2004 2005
--------------- ------------- --------------- --------------
(restated) (restated)
ASSETS
Current assets:
Cash and cash equivalents $28,623 $26,315 $15,745 $67,327
Inventories 19,484 29,948 29,435 30,791
Receivables 1,061 1,875 3,124 3,792
Prepaid expenses and other current
assets 3,617 4,501 5,180 5,320
Deferred tax assets 1,754 2,030 2,192 2,725
--------------- ------------- --------------- --------------
Total current assets 54,539 64,669 55,676 109,955
Property and equipment, net 72,777 73,079 74,694 75,815
Goodwill 97 97 97 -
Other intangible assets 1,486 1,484 1,442 1,411
Other assets, net 1,926 1,989 2,041 2,056
--------------- ------------- --------------- --------------
Total Assets $130,825 $141,318 $133,950 $189,237
=============== ============= =============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $18,088 $21,367 $17,694 $25,767
Accrued expenses 10,111 9,981 9,995 13,966
Other current liabilities 11,473 11,675 12,485 22,222
--------------- ------------- --------------- --------------
Total current liabilities 39,672 43,023 40,174 61,955
--------------- ------------- --------------- --------------
Deferred franchise revenue 1,905 1,864 2,152 2,075
Deferred rent 22,187 24,372 25,567 26,426
Other liabilities 840 803 768 732
Deferred tax liabilities 3,175 3,362 3,403 2,539
Redeemable preferred stock, at
redemption price 38,382 38,875 39,032 -
Stockholders' equity:
Nonredeemable preferred stock, at
par value 94 94 94 -
Common stock, par value $0.01 per
share. 5 7 7 196
Additional paid-in capital 10,967 10,928 12,831 77,708
Retained earnings 15,442 19,858 13,203 19,386
Notes receivable from officers (1,844) (1,868) (1,891) (1,770)
Unearned compensation - - (1,390) (10)
--------------- ------------- --------------- --------------
Total stockholders' equity 24,664 29,019 22,854 95,510
--------------- ------------- --------------- --------------
Total Liabilities and Stockholders'
Equity $130,825 $141,318 $133,950 $189,237
=============== ============= =============== ==============
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 13 Weeks 13 Weeks
Ended Ended Ended Ended
April 3, July 3, October 2, January 1,
2004 2004 2004 2005
-------------- ------------- -------------- ---------------
(restated)
Revenues:
Net retail sales $69,495 $65,924 $66,214 $98,836
Franchise fees 117 190 191 348
Licensing revenue - - 102 245
-------------- ------------- -------------- ---------------
Total revenues 69,612 66,114 66,507 99,429
-------------- ------------- -------------- ---------------
Costs and expenses:
Cost of merchandise sold 35,922 34,124 34,822 46,720
Selling, general, and administrative 24,993 23,638 25,145 41,532
Store preopening 212 493 767 714
Impairment charge (credit) - - - (54)
Interest expense (income), net (39) (59) (72) (129)
-------------- ------------- -------------- ---------------
Total costs and expenses 61,088 58,196 60,662 88,783
-------------- ------------- -------------- ---------------
Income before income taxes 8,524 7,918 5,845 10,646
Income tax expense 3,239 3,009 2,342 4,344
-------------- ------------- -------------- ---------------
Net income 5,285 4,909 3,503 6,302
Cumulative dividends and accretion of
redeemable preferred stock 492 493 152 125
Cumulative dividends of nonredeemable
preferred stock 114 114 35 -
-------------- ------------- -------------- ---------------
Net income available to common
and
participating preferred
stockholders $4,679 $4,302 $3,316 $6,177
============== ============= ============== ===============
Net income allocated to common
stockholders $104 $155 $140 $6,177
============== ============= ============== ===============
Net income allocated to participating
preferred stockholders $4,575 $4,147 $3,176 $-
============== ============= ============== ===============
Earnings per common share:
Basic $0.48 $0.44 $0.34 $0.45
============== ============= ============== ===============
Diluted $0.30 $0.27 $0.19 $0.32
============== ============= ============== ===============
Shares used in computing common per share amounts:
Basic 217,519 354,931 419,218 13,870,389
Diluted 17,858,276 18,021,047 18,528,825 19,650,953
Store data
(1):
Number of stores at end of period 151 # 157 164 170
Store square footage at end of period 464,972 # 479,042 497,385 514,986
Comparable store sales change (%) (2) 14.8% 12.9% 18.8% 23.3%
(1) Excludes our webstore and seasonal and event-based locations.
(2) Comparable store sales percentage changes are based on net retail sales and
stores are considered comparable beginning in their thirteenth full month
of operation.
BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Cash Flows
(dollars in thousands)
13 Weeks 26 Weeks 39 Weeks 52 Weeks
Ended Ended Ended Ended
April 3, July 3, October 2, January 1,
2004 2004 2004 2005
-------------- -------------- -----------------------------
(restated) (restated)
Cash flows from operating activities:
Net income $5,285 $10,194 $13,697 $19,999
Adjustments to reconcile net income
to net cash from operating activities:
Depreciation and amortization 3,543 7,125 10,817 14,948
Deferred taxes (268) (357) (478) (1,875)
Tax benefit from exercise of non-
qualified options - 410 410 410
Loss on disposal of property and
equipment - 142 269 533
Impairment of goodwill - - - 97
Impairment charge (credit) - - - (54)
Stock-based compensation 26 94 584 1,974
Change in assets and liabilities:
Inventories 3,089 (7,375) (6,862) (8,218)
Receivables 1,102 288 (961) (1,629)
Prepaid expenses and other
current assets 598 (286) (965) (1,105)
Accounts payable (3,734) (455) (4,128) 3,998
Accrued expenses and other
liabilities 1,083 2,723 4,994 19,449
-------------- -------------- -----------------------------
Net cash provided by operating
activities 10,724 12,503 17,377 48,527
-------------- -------------- -----------------------------
Cash flows from investing activities:
Purchases of property and equipment (2,403) (6,132) (11,278) (16,494)
Purchases of other assets (299) (657) (955) (1,238)
-------------- -------------- -----------------------------
Net cash used in investing
activities (2,702) (6,789) (12,233) (17,732)
-------------- -------------- -----------------------------
Cash flows from financing activities:
Payment of cash dividend - - (10,000) (10,000)
Exercise of employee stock options - - - 52
Collection of note receivable from
officer - - - 144
Proceeds from initial public
offering, net of offering costs - - - 25,735
-------------- -------------- -----------------------------
Net cash provided by financing
activities - - (10,000) 15,931
-------------- -------------- -----------------------------
Net increase in cash and cash
equivalents 8,022 5,714 (4,856) 46,726
Cash and cash equivalents, beginning of
period 20,601 20,601 20,601 20,601
-------------- -------------- -----------------------------
Cash and cash equivalents, end of
period $28,623 $26,315 $15,745 $67,327
============== ============== =============================