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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) December 6, 2004
(December 6, 2004)
Build-A-Bear Workshop, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 001-32320 43-1883836
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(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
1954 Innerbelt Business Center Drive 63114
St. Louis, Missouri ------------------
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(Address of Principal Executive Offices)
(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 December 6, 2004, Build-A-Bear Workshop, Inc. (the "Company") issued
a press release announcing guidance for net income, diluted earnings per share,
and comparable stores sales growth for the fourth quarter (13 weeks ending
January 1, 2005) and full year of fiscal 2004. 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.
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Item 9.01 Financial Statements and Exhibits.
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(c) Exhibits
Exhibit Number Description of Exhibit
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99.1 Press Release dated December 6, 2004
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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.
(Registrant)
Date: December 6, 2004 /s/ Tina Klocke
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Name: Tina Klocke
Title: Chief Financial Bear, Secretary
and Treasurer
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EXHIBIT INDEX
Exhibit Number Description of Exhibit
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99.1 Press Release dated December 6, 2004
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Exhibit 99.1
Build-A-Bear Workshop, Inc. Provides Fiscal 2004
Full Year and Fourth Quarter Earnings Guidance
ST. LOUIS--(BUSINESS WIRE)--Dec. 6, 2004--Build-A-Bear Workshop,
Inc. (NYSE: BBW):
-- Full year comparable store sales growth expected to be in the
range of 16% to 18%, based on expected fourth quarter comp
store sales growth of 20% to 22%
-- Full year diluted EPS expected to be in the range of $1.02 to
$1.05, including stock-based compensation expense of $0.07 per
diluted share, compared to fiscal 2003 full year diluted EPS
of $0.45
Build-A-Bear Workshop, Inc. (NYSE: BBW), an interactive,
entertainment retailer of customized stuffed animals, today provided
earnings guidance for the fiscal 2004 full year and fourth quarter.
For full year fiscal 2004 (52 weeks ended January 1, 2005), the
company expects net income in the range of $18.9 million to $19.5
million, diluted earnings per share (EPS) in the range of $1.02 to
$1.05, and comparable store sales growth in the range of 16% to 18%.
These expected results compare to fiscal 2003 full year (53 weeks
ended January 3, 2004) net income of $8.0 million or $0.45 per diluted
share.
For the fiscal 2004 fourth quarter (13 weeks ended January 1,
2005) the company expects net income in the range of $5.1 million to
$5.7 million, diluted EPS in the range of $0.26 to $0.29, and
comparable store sales growth in the range of 20% to 22%. These
expected results compare to fiscal 2003 fourth quarter (14 weeks ended
January 3, 2004) net income of $5.3 million or $0.30 per diluted
share.
The fiscal 2004 fourth quarter earnings guidance reflects the
following:
-- The fiscal 2004 fourth quarter will include 13 weeks and the
full year will include 52 weeks. The fiscal 2003 fourth
quarter included 14 weeks and the full year included 53 weeks.
-- Fiscal 2004 fourth quarter earnings results will include the
impact of a non-cash, stock- based compensation expense of
$1.4 million pre-tax ($1.0 million net of tax or $0.05 per
diluted share). No stock-based compensation expense was
recognized in the fiscal 2003 fourth quarter.
-- Fiscal 2004 fourth quarter earnings results are expected to
reflect higher bonus compensation expense in recognition of
the improved company performance during fiscal 2004, and
higher marketing and advertising expenses related to the
company's ongoing brand building efforts.
-- The fiscal 2003 fourth quarter results benefited from a
reduction in the deferred revenue balance. This adjustment
reflected projected redemption rates in the frequent shopper
program which resulted in an increase in total revenues and
gross margin of $1.1 million pre-tax ($0.7 million net of tax
or $0.04 per diluted share). Additionally, the amount of
revenue being deferred beginning in fiscal 2004 was decreased
from the previous deferral rate.
-- Fiscal 2004 fourth quarter diluted shares outstanding are
anticipated to be 19.57 million; fiscal 2003 fourth quarter
diluted shares outstanding were 17.76 million.
Stock Based Compensation Expense
The non-cash, stock-based compensation expense relates to stock
options granted during the first half of 2004 at $8.78 per share,
which an independent appraisal had determined was a fair value at the
time. Subsequently, it was determined that the fair value of the
underlying common stock should have been $15.00 per share.
Accordingly, a $1.9 million pre-tax total stock-based compensation
expense will be recorded over the vesting period of the options. As a
result of the initial public offering, all of these option grants
became fully vested. A portion ($0.5 million pre tax, $0.4 million net
of tax or $0.02 per diluted share) of the expense was recognized in
the fiscal 2004 third quarter and the balance will be recognized in
the fourth quarter.
Frequent Shopper Program
Build-A-Bear Workshop's frequent shopper program provides guests
who purchase approximately $100 of merchandise a discount off future
purchases. An estimate of the obligation related to the program, based
on historical redemption rates, is recorded as deferred revenue, and a
reduction to net sales, at the time of the original purchase. The
deferred revenue obligation is reduced at the time the discount is
redeemed. The company periodically reviews the redemption rates and
assesses the adequacy of the deferred revenue account.
Other Company Background
As previously announced, Build-A-Bear Workshop priced its initial
public offering of 8,604,300 shares of common stock on October 27,
2004 at $20.00 per share. The offering closed on November 2, 2004.
Following the offering, and the mandatory conversion of all preferred
stock into common stock, 19,551,651 shares of common stock were
outstanding.
Build-A-Bear Workshop's fiscal year consists of 52 or 53 weeks,
reported in four 13-week periods, and ends on the Saturday nearest
December 31 in each year. Stores are considered comparable beginning
in their thirteenth full month of operations. Comparable store sales
percentage changes are based on net retail sales and comparable
stores, which exclude the webstore and seasonal and event-based
locations.
About Build-A-Bear Workshop, Inc.
Build-A-Bear Workshop, with fiscal 2003 revenues of $214 million,
is the leading and only national, company providing a "make your own
stuffed animal" interactive retail-entertainment experience. As of
December 3, 2004, the company operated 170 stores in 40 states and
Canada and had 12 franchised stores internationally, all under the
Build-A-Bear Workshop brand. In November 2004, the company opened two
Friends 2B Made stores, the newest concept launch from Build-A-Bear
Workshop. For more information about our company and its products call
(888) 560-BEAR (2327) or visit the company website 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, expected
net income, diluted earnings per share and comparable store sales
growth in the fiscal 2004 full year and fourth quarter, as well as,
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 final
prospectus dated October 28, 2004 under the caption "Risk Factors" and
the following: (1) we may be unable to maintain our current 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 deteriorate, 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.
Full year fiscal 2004 revenues are anticipated to be in the range
of $298.5 million to $299.8 million, including anticipated fourth
quarter comparable store sales growth of 20% to 22%.
CONTACT: Build-A-Bear Workshop, Inc.
Investors and Analysts:
Molly Salky, 314-423-8000 x5353
invest@buildabear.com
or
Media:
Jill Saunders, 314-423-8000 x5293
jills@buildabear.com