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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)
January 27, 2005
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 Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
1954 Innerbelt Business Center Drive 63114
St. Louis, Missouri -----------
---------------------------------------------- (Zip Code)
(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 2.02. Results of Operations and Financial Condition.
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On January 27, 2005, Build-A-Bear Workshop, Inc. (the "Company") issued a
press release announcing, among other things, expected net retail sales per
square foot and second-half expected net income and second-half diluted earnings
per share in fiscal 2004, and reaffirming, among other things, expected fiscal
2004 full year net income and diluted earnings per share, along with guidance
for, among other things, net income, diluted earnings per share and comparable
store sales growth for fiscal 2005 and, in certain cases, for various quarterly
and half-year periods in 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.
As previously reported, the Company will present at the AG Edwards
Retailing 2005 conference in Coral Gables, Florida, on Thursday, January 27,
2005 beginning at 10:45 a.m. and concluding by 11:15 a.m. Eastern Time. The
presentation will include an overview of the Company, a discussion of how
technology is used by the Company, new technology initiatives underway, and
management's guidance for earnings and comparable store sales in fiscal 2005.
An investor conference presentation and slides will be webcast and
available both live and via replay after the presentation on the Company's
investor relations website located at http://ir.buildabear.com, although the
Company reserves the right to discontinue its availability at any time.
The Company does not undertake any plan or obligation to update the
presentation, even though its situation may change in the future.
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 January 27, 2005.
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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.
Date: January 27, 2005 By: /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 January 27, 2005.
4
EXHIBIT 99.1
Build-A-Bear Workshop, Inc. Provides Fiscal 2005 Earnings Guidance
ST. LOUIS--(BUSINESS WIRE)--Jan. 27, 2005--Build-A-Bear Workshop,
Inc. (NYSE:BBW):
- -- Full year 2005 diluted EPS expected to be in the range of $1.29 to
$1.35; comparable store sales growth expected to be approximately
3%
- -- First quarter diluted EPS expected to be in the range of $0.32 to
$0.34; comparable store sales growth expected to be 5% to 7%
- -- Fiscal 2004 net retail sales per square foot reach $602, up 20%
Build-A-Bear Workshop, Inc. (NYSE:BBW), an interactive,
entertainment retailer of customized stuffed animals, today provided
fiscal 2005 earnings guidance.
For full year fiscal 2005 (52 weeks ended December 31, 2005), the
company expects net income in the range of $26.1 million to $27.3
million, or diluted earnings per share (EPS) of $1.29 to $1.35, and
comparable store sales growth of approximately 3%.
As previously announced, the company expects fiscal 2004 full year
net income in the range of $19.7 million to $19.9 million, or diluted
EPS of $1.06 to $1.07. Results in 2004 will include the impact of
non-cash, stock-based compensation expense of $1.9 million pre-tax, or
$0.07 per diluted share. Fiscal 2004 net retail sales per square foot
were $602, up from $502 recorded in fiscal 2003.
"We look forward to delivering significant earnings growth in
2005," said Barry Erdos, president and chief operating officer bear.
"The continued benefits of our national advertising program, new store
expansion, non-mall expansion in ball parks, mobile store, and
contributions from international franchise stores and brand licensing
agreements all are expected to drive revenue and earnings growth this
year. We also expect to deliver profitability improvement through
maintaining our excellent retail gross margin percent and improving
our selling, general and administrative expense percent. Included in
our new store plans for 2005 are three new friends 2B made(R) stores,
one to be located in our NYC flagship store and two other locations
that are being finalized."
2005 Full Year Earnings Outlook
The company's fiscal 2005 full year outlook includes the following:
- -- During 2005 the company plans to open approximately 30 new stores
in the U.S. and Canada including a flagship store in New York
City; this compares to 21 new store openings in 2004.
- -- The company expects international franchisees to open 15 to 20 new
stores in fiscal 2005; this compares to 12 new store openings in
2004.
- -- Selling, general and administrative expenses include costs
associated with the company's integrated marketing program. In
2005, Build-A-Bear Workshop plans to continue its commitment to
national television advertising as a part of the marketing
program. Marketing and advertising spending as a percent of total
revenues is expected to be slightly higher in 2005 compared to
spending in 2004. In 2005, marketing and advertising spending is
expected to approximate 8% of total revenues, or $28 to $29
million pretax, and is included in the fiscal 2005 earnings
guidance.
- -- Estimated flagship store pre-opening costs of approximately $1.7
million pretax, or $0.05 per diluted share, are significantly
higher than for a typical store and are included in the fiscal
2005 earnings guidance. The flagship store is expected to open in
the June/July 2005 timeframe while pre-opening costs will
primarily impact the first and second quarters.
2005 Spring Season Earnings Outlook
The company's fiscal 2005 spring season outlook includes the
following:
- -- The Easter holiday occurs on March 27, 2005 (first quarter fiscal
2005) compared to April 11, 2004 (second quarter fiscal 2004).
This holiday shift combined with spring break school vacations is
expected to positively impact the first quarter 2005 compared to
the year ago period, and negatively impact the second quarter 2005
compared to the year ago period.
- -- At this time, the company expects fiscal 2005 first quarter
(13-weeks ended April 2, 2005) net income in the range of $6.4
million to $6.8 million, or diluted EPS of $0.32 to $0.34
(includes flagship store pre-opening costs of approximately $0.6
million pretax, or $0.02 per share) and comparable store sales
growth in the range of 5% to 7%. These expected results compare to
fiscal 2004 first quarter (13-weeks ended April 3, 2004) net
income of $5.3 million or diluted EPS of $0.30.
- -- Net retail sales in the fiscal 2004 first quarter benefited when
the company was featured in one segment of a nationally syndicated
television show in February 2004.
- -- The company expects fiscal 2005 second quarter (13-weeks ended
July 2, 2005) net income in the range of $4.7 million to $5.1
million, or diluted EPS of $0.23 to $0.25 (includes flagship store
pre-opening costs of approximately $1.1 million pretax, or $0.03
per share), and comparable store sales growth in the range of 2%
to 3%. These expected results compare to fiscal 2004 second
quarter (13-weeks ended July 3, 2004) net income of $4.9 million,
or diluted EPS of $0.27.
- -- Beginning in February 2005, the company will anniversary the start
of its national television advertising program.
For the second half of fiscal 2005 (fiscal third and fourth
quarters combined), the company expects net income in the range of
$15.1 million to $15.5 million, or diluted EPS in the range of $0.74
to $0.76, and comparable store sales growth in the range of
approximately 2%. These results compare to fiscal 2004 second half
expected net income of $9.4 million to $9.6 million, or diluted EPS of
$0.50 to $0.51.
AG Edwards Retailing 2005 Conference
As previously announced, the company's President and Chief
Operating Officer Bear, Barry Erdos, will present today at the AG
Edwards Retailing 2005 Conference in Coral Gables, Florida. The
company's presentation will begin at 10:45 a.m. and conclude by 11:15
a.m. Eastern Time. A live webcast of the presentation will be
available at the Build-A-Bear Workshop Investor Relations website at
http://ir.buildabear.com. A replay of the presentation will be
available shortly after the live presentation.
Other Company Background
Build-A-Bear Workshop is currently scheduled to report fiscal 2004
fourth quarter and full-year financial results and host a conference
call on March 10, 2005.
Fiscal 2005 earnings guidance does not include the impact of SFAS
123R, Share-Based Payment. This new accounting standard pertains to
accounting for stock-based compensation and must be adopted by the
company not later than third quarter fiscal 2005 (13-weeks ended
October 1, 2005).
Net retail sales per square foot represents net retail sales from
stores open throughout the entire period divided by the total gross
square footage of these stores.
The Build-A-Bear Workshop fiscal year ends on the Saturday nearest
December 31 in each year and consists of 52 or 53 weeks, reported in
four 13-week periods. 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, Inc. (NYSE:BBW) is the leading and only
national, company providing a make-your-own stuffed animal interactive
entertainment retail experience. The first store opened in St. Louis
in 1997 and as of January 2005 the company operated 170 stores in 40
states and Canada. With the opening of its international store in
Sheffield, England in the fall of 2003, the addition of international
stores in Japan, Denmark and Australia in 2004, Build-A-Bear Workshop
has become the global leader in the teddy bear business. In November
2004, the company also opened two friends 2B made(R) stores, the
newest concept launch from Build-A-Bear Workshop. For more information
about the company and its products call (888) 560-BEAR (2327) or visit
the company's award-winning 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
diluted earnings per share and comparable store sales growth in the
fiscal 2005 full year, 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 to 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 experiences, 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.
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