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): March 3, 2006
Build-A-Bear Workshop, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
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Delaware 001-32320 43-1883836
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
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1954 Innerbelt Business Center Drive
St. Louis, Missouri 63114
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(Address of Principal Executive Offices) Zip Code
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(314) 423-8000
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(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 7.01. Regulation FD Disclosure.
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On March 3, 2006, Build-A-Bear Workshop, Inc. (the "Company") issued a
press release announcing that its wholly-owned subsidiary, Build-A-Bear Workshop
UK Holdings, Ltd., had signed a definitive agreement to buy The Bear Factory, a
United Kingdom-based stuffed animal retailer owned by Hamleys, Ltd., and Amsbra,
Ltd., the Company's franchisee in the U.K. The all-cash transaction is valued at
approximately $41.4 million ((pound)23.6 million) and is expected to close late
in the first quarter or early in the second quarter of fiscal 2006. The closing
is subject to the completion of U.K. regulatory clearance. In addition, in
connection with the announced transaction, the Company stated that the
transaction will reduce its previously announced fiscal 2006 earnings per
diluted share guidance of $1.57 to $1.63 by $0.10 to $0.13. A copy of the press
release is furnished as Exhibit 99.1 hereto and is incorporated by reference
herein. This description of the press release contained herein is qualified in
its entirety by the full text of such exhibit.
The information contained in this Item 7.01 shall not be deemed to be
"filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or otherwise subject to the liabilities of that
section, nor shall such information be deemed incorporated by reference in any
filing under the Securities Act of 1933, as amended (the "Securities Act") or
the Exchange Act, except as shall be expressly set forth by specific reference
in such a filing. The information set forth in this Item 7.01 shall not be
deemed an admission as to the materiality of any information in this report on
Form 8-K that is required to be disclosed solely to satisfy the requirements of
Regulation FD.
Item 9.01 Financial Statements and Exhibits.
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(d) Exhibits
Exhibit Number Description of Exhibit
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99.1 Press Release dated March 3, 2006
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: March 3, 2006 By: /s/ Tina Klocke
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Name: Tina Klocke
Title: Chief Financial Bear,
Secretary and Treasurer
EXHIBIT INDEX
Exhibit Number Description of Exhibit
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99.1 Press Release dated March 3, 2006
Exhibit 99.1
Build-A-Bear Workshop, Inc. to
Buy the Bear Factory and U.K. Franchisee for Approximately $41.4
Million in Cash
ST LOUIS--(BUSINESS WIRE)--March 3, 2006--Build-A-Bear Workshop,
Inc. (NYSE: BBW):
-- The Bear Factory is a U.K.-based stuffed animal retailer
-- Transaction includes purchase of Build-A-Bear Workshop U.K.
franchisee, Amsbra, Ltd.
-- Transaction offers significant economies of scale and is
expected to be accretive to 2007 earnings per share
Build-A-Bear Workshop, Inc., an interactive, entertainment
retailer of customized stuffed animals, today announced that it has
signed a definitive agreement to buy The Bear Factory, a United
Kingdom-based stuffed animal retailer owned by Hamleys, Ltd. As part
of the agreement, Build-A-Bear Workshop will also acquire Amsbra,
Ltd., its franchisee in the U.K.
"The acquisition of Bear Factory increases our opportunities to
rapidly expand our brand throughout the United Kingdom, and provides
us with an opportunity to use our successful marketing, product, and
store execution practices as a national retailer in the U.K.," said
Maxine Clark, chairman and chief executive bear. "The U.K. market is
one with an exciting growth profile and combining forces with our
Amsbra partners is a natural fit. We look forward to the benefits we
can generate by leveraging our purchasing power and know-how across a
larger and growing store base."
The closing of the Bear Factory transaction is subject to the
completion of U.K. regulatory clearance. The all cash transaction
inclusive of the Amsbra transaction is valued at approximately $41.4
million (GBP 23.6 million) and is expected to close late in the first
quarter or early in the second quarter of fiscal 2006. The Company
further expects the acquisition to be accretive to earnings per share
in fiscal 2007. In fiscal 2006, the transaction is expected to reduce
earnings per diluted share by approximately $0.10 to $0.13 due
primarily to costs associated with store conversion and integration,
reduced franchise fee revenue and lower interest income.
The Bear Factory, which had net retail revenue of $38.6 million
(GBP 22.0 million) in fiscal 2005 (twelve months ended March 26,
2005), opened their first store in 2000. The acquisition includes 29
Bear Factory stores - 28 stores in the U.K., including one store
located inside Hamleys' Regent Street flagship store - and one store
in the Irish Republic. The majority of these stores are in premier
mall locations. Bear Factory franchisees currently operate 13 stores
located in the Middle East, Europe and Asia. After the transaction
closes, Bear Factory stores in the U.K. and the Irish Republic are
expected to be converted to Build-A-Bear Workshop stores in time for
the 2006 holiday season. The expanded operations will be managed
locally by the Amsbra, Ltd. management team in combination with
members of the Bear Factory management and a Build-A-Bear Workshop
integration team.
"The Bear Factory store concept is similar to Build-A-Bear
Workshop," said Barry Erdos, president and chief operating officer
bear. "This is a business and a market we know and understand. We have
confidence in our ability to grow and that with the economies of scale
we'll have can improve the overall profitability of our U.K.
operations. During the remainder of fiscal 2006, we plan to complete
the integration and conversion of the store base, marketing programs,
merchandise and information systems. This acquisition will also allow
our world-wide expansion to occur more quickly than originally
planned."
Amsbra, Ltd., which had net retail revenue of $6.0 million (GBP
3.4 million) in fiscal 2005 (twelve months ended December 31, 2005)
became a Build-A-Bear Workshop franchisee in May 2003 and opened its
first store in Sheffield, England in November 2003. Amsbra holds the
Build-A-Bear Workshop franchise rights in England, Scotland, Wales,
Northern Ireland and the Irish Republic. Amsbra currently operates 11
Build-A-Bear Workshop stores in the U.K. and owns a partial interest
in Faber France S.A.S. the Build-A-Bear Workshop franchisee in France.
Hamleys, the world famous toy retailer, opened its first toy shop
in London in 1760. It operates its main flagship store on Regent
Street in London, five airport stores and a Website operation.
Additionally, it has recently opened three concession stores in
Denmark as a first step in an expansive overseas development plan.
Updated 2006 Guidance
Build-A-Bear Workshop expects the Bear Factory/Amsbra acquisition
to reduce its previously announced fiscal 2006 earnings per diluted
share guidance of $1.57 to $1.63 by $0.10 to $0.13. This reduction in
earnings guidance primarily reflects the impact of costs associated
with re-branding, store conversion, and integration of the Bear
Factory stores, as well as, a reduction in franchise fee revenue and
lower interest income.
For the first half of fiscal 2006, earnings per diluted share are
expected to be in the range of $0.63 to $0.66, excluding the Bear
Factory/Amsbra transaction. For the second half of fiscal 2006,
earnings per diluted share are expected to be in the range of $0.94 to
$0.97, excluding the Bear Factory/Amsbra transaction.
This guidance includes the anticipated impact of expensing
stock-based compensation as required by SFAS 123R of approximately
$2.7 million pretax ($1.7 million net of tax or $0.08 per diluted
share) and distribution center transition costs of approximately $1.4
million pretax ($0.9 million net of tax or $0.04 per diluted share),
which will primarily impact the third quarter of fiscal 2006.
Management Conference Call - Monday, March 6, 9:00 a.m. Eastern
Time
Build-A-Bear Workshop management will host a financial analyst and
investor conference call on Monday, March 6, 2006 at 9:00 a.m. ET to
discuss the Bear Factory transaction. The dial-in number for the live
conference call is (617) 614-3925. The access code is 'Build-A-Bear'.
Build-A-Bear Workshop will broadcast the conference call over the
Internet via webcast. The webcast will be accessible through the
Investor Relations page of Build-A-Bear Workshop's corporate web site,
http://ir.buildabear.com. Participants are encouraged to log on to the
webcast approximately 15 minutes in advance of the scheduled start
time of the call.
Following the live call, replays will be made available on the
Internet and via telephone. A replay of the webcast will be posted on
http://ir.buildabear.com approximately two hours after the completion
of the call and will remain available until our next quarterly
conference call. To access the telephone replay dial (617) 801-6888.
The access code is 62055474. The telephone replay will be available
from noon on March 6, 2006 to 11:59 p.m. on March 20, 2006.
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. Founded in St. Louis in 1997, the company currently
operates more than 200 stores in the United States and Canada. The
addition of franchise stores in Europe, Asia and Australia make
Build-A-Bear Workshop the leader in interactive retail. In November
2004, the company expanded the make-your-own concept from stuffed
animals to dolls with the opening of its first friends 2B made(R), in
which Guests can make their own dolls. Build-A-Bear Workshop (NYSE:
BBW) posted total revenue of $362 million in fiscal 2005. For more
information, call 888.560.BEAR (2327) or visit the company's
award-winning Web sites at www.buildabear.com and
www.friends2bmade.com.
Forward-Looking Statements
This press release contains "forward-looking statements" (within
the meaning of the federal securities laws) which represent the
Build-A-Bear Workshop's expectations or beliefs with respect to future
events. These forward-looking statements are subject to certain risks
and uncertainties that could cause actual results to differ materially
from those anticipated. Those factors include, without limitation: we
may not realize some of the expected benefits of the acquisition of
Amsbra and The Bear Factory; we may be unable to generate comparable
store sales growth; our marketing initiatives may not generate
sufficient brand awareness and sales; we may be unable to effectively
manage our international franchises or comply with changing laws
relating thereto; we may be unable to generate demand for our retail
experience, or to respond to consumer preferences; customer mall
traffic may decrease, as a result of various factors, including a
reduction of consumer confidence because of terrorism or war; general
economic conditions may worsen; our market share could be adversely
affected by competitors; we may lose key personnel, or be unable to
hire qualified additional personnel; vendor deliveries may be
disrupted; the availability and costs of our products could be
impacted by international manufacturing and trade issues; our
warehousing and distribution vendors may perform poorly; we may fail
to protect our intellectual property and may have infringement,
misappropriation or other disputes or litigation with third parties;
we may be unable to open new stores, renew or replace our store
leases, enter into leases for new stores on favorable terms, or
continue to comply with our current leases; we may experience
communications or information systems failures; we may suffer negative
publicity or be sued due to alleged violations of labor laws, employee
regulations or unethical practices, either by the Company or its
merchandise manufacturers; and we may violate or be accused of
violating privacy or security laws by reason of improperly obtaining
or failing to adequately protect Guest information. These and other
applicable risks, cautionary statements and factors that could cause
actual results to differ from the Company's forward-looking statements
are included in the Company's filings with the SEC, including as
described in the Company's annual report on Form 10-K for the fiscal
year ended January 1, 2005. The Company undertakes no obligation to
update or revise any forward- looking statements to reflect subsequent
events or circumstances even if experience or future changes make it
clear that any projected results expressed or implied therein will not
be realized.
CONTACT: Build-A-Bear Workshop, Inc.
Investors:
Molly Salky, 314-423-8000 x5353
or
Media:
Jill Saunders, 314-423-8000 x5379