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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) March 10, 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 March 10, 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 fiscal 2004
full year and fourth quarter 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.
Item 9.01 Financial Statements and Exhibits.
- --------------------------------------------
(c) Exhibits
Exhibit Number Description of Exhibit
- -------------- ----------------------
99.1 Press Release dated March 10, 2005.
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: March 10, 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 March 10, 2005.
4
Exhibit 99.1
Build-A-Bear Workshop, Inc. Reports Outstanding Growth in Sales
and Net Income in the Fiscal 2004 Fourth Quarter and Full Year
ST. LOUIS--(BUSINESS WIRE)--March 10, 2005--Build-A-Bear Workshop,
Inc. (NYSE:BBW):
-- Fourth quarter net income increased 19.9%, slightly exceeding
company guidance. Full year net income increased 162.5%.
-- Fourth quarter earnings per diluted share were $0.32 vs. $0.30
in fiscal 2003, an increase of 6.7%. Full year earnings per
diluted share were $1.07 vs. $0.43 in fiscal 2003, an increase
of 148.8%.
-- 2004 full year results include non-cash stock-based
compensation expense (reduced earnings $0.07 per diluted
share) and lease accounting corrections (reduced earnings
$0.01 per diluted share). Lease accounting corrections were
not included in our previous guidance.
-- Fiscal 2005 earnings guidance remains $1.29 to $1.35 per
diluted share, representing net income growth of 31% to 37%
compared to fiscal 2004 -- lease accounting corrections are
expected to be neutral to diluted earnings per share in 2005.
Build-A-Bear Workshop, Inc. (NYSE:BBW), an interactive
entertainment retailer of customized stuffed animals, announced that
total revenue for the fiscal 2004 fourth quarter (13 weeks ended Jan.
1, 2005) increased 36.0% to $99.4 million, compared to $73.1 million
in the prior year's fourth quarter (14 weeks ended Jan. 3, 2004). For
the full year fiscal 2004 (52 weeks ended Jan. 1, 2005), total revenue
increased 41.2% to $301.7 million, compared to $213.7 million in
fiscal 2003 (53 weeks ended Jan. 3, 2004).
Fourth quarter net income increased 19.9% to $6.3 million or $0.32
per diluted share on 19.7 million diluted shares outstanding. This
compares to net income as restated of $5.3 million, or $0.30 per
diluted share on 17.8 million diluted shares outstanding in last
year's fourth quarter. For the full year fiscal 2004, net income
increased 162.5% to $20.0 million or $1.07 per diluted share on 18.6
million diluted shares outstanding. This compares to net income as
restated of $7.6 million or $0.43 per diluted share on 17.5 million
shares outstanding in fiscal 2003.
"2004 was an outstanding year for Build-A-Bear Workshop," said
Chairman and Chief Executive Bear Maxine Clark. "Our net income showed
significant growth as a result of our investment in marketing, which
focused on building the brand and raising awareness. We realized
revenue contribution from international franchising and third-party
licensing - businesses that we expect to increasingly contribute to
our bottom-line results. And, we continued to improve our highly
productive and profitable store economic model, achieving sales per
square foot of $602 compared to $503 in 2003, an increase of 20%. 2004
provided a solid foundation for continued growth and improvement and
we are pleased that our results were slightly better than our
guidance.
"In 2005, we will build on our 2004 success," added Clark. "We are
excited to add two new baseball park stores and three new friends 2B
made(R) stores to our 2005 growth plans. And we continue to enhance
our strategy of taking our brand wherever families go to have fun with
our new Build-A-Bear Workshop On Tour mobile store. To date, our first
quarter sales are on target with our previous guidance. March is a
significant month for us with the anniversary of our appearance on a
nationally syndicated TV show, as well as the shift of the Easter
holiday from the second quarter in 2004 to the first quarter in 2005."
The company has completed its review of lease accounting.
Corrections to lease accounting methods are reflected in the restated
financial results and fiscal 2005 financial guidance. The impact of
these corrections to fiscal 2004 full year results was to reduce
earnings by $0.3 million pre-tax, $0.2 million net of tax, or $0.01
per diluted share. The corrections had no impact on fourth quarter
earnings per share. The impact of these corrections to fiscal 2003
full year results was to reduce earnings by $0.6 million pre-tax, $0.4
million net of tax, or $0.02 per diluted share.
Fiscal 2004 fourth quarter and full year results include the
impact of non-cash stock-based compensation expense of $1.4 million
pre-tax ($1.0 million net of tax or $0.05 per diluted share) and $1.9
million pre-tax ($1.4 million net of tax or $0.07 per diluted share),
respectively. No stock-based compensation expense was recognized in
fiscal 2003. See further discussion of non-cash stock-based
compensation expense in this press release.
Comparisons made between fiscal 2004 and fiscal 2003 should
recognize that the fiscal 2004 fourth quarter included 13 weeks and
the full year included 52 weeks, while the fiscal 2003 fourth quarter
included 14 weeks and the full year included 53 weeks.
Fiscal 2004 Fourth Quarter
Fiscal 2004 fourth quarter total revenue includes net retail sales
of $98.8 million, an increase of $25.8 million or 35.3% compared to
last year's fourth quarter. Net retail sales growth was primarily
driven by comparable store sales growth of 23.3% and the addition of
21 new stores opened during 2004. Fourth quarter total revenue
includes revenue from international franchise fees totaling $348,000,
an increase of $258,000 compared to last year's fourth quarter, and
licensing revenue totaling $245,000, compared to no licensing revenue
last year.
Fourth quarter net income growth of $1.0 million, compared to the
fiscal 2003 fourth quarter, was driven primarily by increased revenue
and improved leverage on costs and expenses. Gross margin rate
improved to 52.7% up from 49.2% in the fiscal 2003 fourth quarter, as
strong sales volume leveraged store occupancy costs and produced
purchasing cost efficiencies. Selling, general and administrative
expense as a percent of total revenue increased to 41.7% from 37.1%
primarily due to higher marketing spending, which increased $4.4
million to $10.8 million from $6.4 million, and non-cash stock-based
compensation expense of $1.4 million.
During the fourth quarter, the company opened six new Build-A-Bear
Workshop (BABW) retail stores in the United States and Canada,
compared with opening seven BABW stores during the same period last
year. Also during the fourth quarter, the company opened its first two
friends 2B made (F2BM) stores adjacent and connected to existing BABW
stores.
Fiscal 2004 Full Year
Fiscal 2004 total revenue includes net retail sales of $300.5
million, an increase of $87.0 million or 40.8% compared to fiscal
2003. Net retail sales growth was driven by comparable store sales
growth of 18.1% and the addition of 21 new stores opened during the
year. Fiscal 2004 total revenue includes revenue from international
franchise fees totaling $846,000, an increase of $602,000 compared to
fiscal 2003, and licensing revenue totaling $347,000, compared to no
licensing revenue in fiscal 2003.
Fiscal 2004 net income growth of $12.4 million, compared to fiscal
2003, was driven primarily by higher net retail sales, a significant
increase in retail gross margin rate and lower store pre-opening
expenses. Gross margin rate improved to 49.5% up from 45.5% in fiscal
2003. Marketing and advertising spending in fiscal 2004 increased
$12.6 million to $22.7 million or 7.5% of total revenue. During 2004,
Build-A-Bear Workshop launched a national television advertising
campaign designed to raise consumer awareness of the Build-A-Bear
Workshop brand.
In the United States and Canada during fiscal 2004, the company
opened 21 new BABW stores and two F2BM stores, and closed one BABW
store increasing total square footage to 514,986 square feet. During
fiscal 2003 the company opened 43 BABW stores, closed one BABW store
and ended the year with total store square footage of 462,484 square
feet.
During fiscal 2004, international franchisees opened 12 stores in
four countries -- ending the year with stores in the United Kingdom (4
stores), Japan (4 stores), Denmark (2 stores) and Australia (2 stores)
- -- and closed one store in Seoul, South Korea at the end of December
2004. The South Korea franchise has been transferred to a new
franchisee which will reopen the Seoul store in a new location in May
2005.
Lease Accounting
As previously announced, the company has reviewed its lease
accounting methods in light of new clarification of Generally Accepted
Accounting Principles provided by the Chief Accountant of the
Securities and Exchange Commission. As a result of this review, and
discussions with its independent auditor, the company has corrected
its lease accounting methods and will restate prior period financial
statements in its annual report on Form 10-K for fiscal 2004.
Historically, the company had recognized rent expense for leases
on a straight-line basis beginning on the earlier of the store opening
date or lease commencement date. This had the effect of excluding the
build-out period from the calculation of the period over which rent is
expensed. The company has determined that it will correct this
practice to include the build-out period in the calculation of the
period over which rent is expensed.
Furthermore, the company had accounted for landlord allowances as
a reduction of the cost of leasehold improvements. The company has
determined that it will now account for landlord allowances as a
deferred credit that will be recognized over the term of the lease as
a reduction of rent expense. The term of the lease, as mentioned
above, will now include the build-out period. These corrections to
lease accounting methods will not have an impact on the cash flow and
rent expense recognized over the periods of the underlying leases. See
Supplemental Information Table for Lease Accounting Corrections for
further information.
Non-Cash Stock-Based Compensation Expense
The non-cash stock-based compensation expense recorded in fiscal
2004 relates to stock options granted during the first half of 2004 at
$8.78 per share, which an independent appraisal had determined was
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 stock-based compensation
expense was recorded over the vesting period of the options. As a
result of the initial public offering (priced on October 27, 2004) 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 ($1.4 million pre-tax, $1.0 million net of tax or $0.05 per
diluted share) was recognized in the fourth quarter.
Outlook
The company's sales and earnings guidance for 2005 remains
unchanged and reflects lease accounting corrections, which have no
impact on guidance.
At this time, the company expects fiscal 2005 (52 weeks ended Dec.
31, 2005) net income in the range of $26.1 million to $27.3 million,
representing net income growth of 31% to 37% compared to fiscal 2004.
Diluted earnings per share (EPS) are expected to be in the range of
$1.29 to $1.35 and comparable store sales growth is expected to be
approximately 3%.
In the first quarter of fiscal 2005 (13 weeks ended April 2, 2005)
the company expects net income in the range of $6.4 million to $6.8
million, EPS in the range of $0.32 to $0.34 and comparable store sales
growth in the range of 5% to 7%. These expected results compare to
fiscal 2004 first quarter net income of $5.3 million or diluted EPS of
$0.30.
In the second quarter of fiscal 2005 (13 weeks ended July 2, 2005)
the company expects net income in the range of $4.7 million to $5.1
million, diluted EPS in the range of $0.23 to $0.25 and comparable
store sales growth in the range of 2% to 3%. These expected results
compare to fiscal 2004 second quarter net income of $4.9 million, or
diluted EPS of $0.27.
Build-A-Bear Workshop expects to open approximately 30 new BABW
stores in the United States and Canada, including a flagship store in
New York City, and three new F2BM stores in fiscal 2005. International
franchisees expect to open 15 to 20 new stores in fiscal 2005.
The company expects to begin expensing stock-based compensation in
the third quarter of fiscal 2005 as required by SFAS 123R, Share-Based
Payment. Fiscal 2005 guidance does not include the impact of SFAS
123R.
Other News
Build-A-Bear Workshop will host its first Annual Meeting of
Shareholders in St. Louis, Missouri, on Thursday, May 12, 2005, at
10:00 a.m. local time.
Today's Conference Call Webcast
Today at 9:00 a.m. EST, Build-A-Bear Workshop will host a live
audio webcast of its discussion with the investment community
regarding the company's fiscal 2004 fourth quarter and full year
results. The webcast can be accessed at http://ir.buildabear.com.
Following the live discussion, a replay of the webcast will be
available until our next quarterly conference call.
About Build-A-Bear Workshop, Inc.
Build-A-Bear Workshop, Inc. (NYSE: BBW), with fiscal 2004 total
revenue of $301.7 million, is the leading and 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 and as of February 2005 the company operated 170 stores in 40
states and Canada. With the opening of its first international store
in Sheffield, England in the fall of 2003 and 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 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, 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 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 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 14 Weeks
Ended Ended
January 1, % of Total January 3, % of Total
2005 Revenues(1) 2004 Revenues(1)
----------- ----------- ----------- -----------
Revenues: (restated)
Net retail sales $ 98,836 99.4% $ 73,035 99.9%
Franchise fees 348 0.3 90 0.1
Licensing revenue 245 0.2 -- 0.0
----------- ---------- ----------- -----------
Total revenues 99,429 100.0 73,125 100.0
----------- ---------- ----------- -----------
Costs and expenses:
Costs of merchandise
sold 46,720 47.3 37,078 50.8
Selling, general,
and administrative 41,478 41.7 27,161 37.1
Store preopening 714 0.7 372 0.5
Interest expense
(income), net (129) 0.1 3 0.0
----------- ---------- ----------- -----------
Total costs and
expenses 88,783 89.3 64,614 88.4
----------- ---------- ----------- -----------
Income before
income taxes 10,646 10.7 8,511 11.6
Income tax expense 4,344 4.4 3,257 4.5
----------- ---------- ----------- -----------
Net income 6,302 6.3 5,254 7.2
Cumulative dividends
and accretion of
redeemable preferred
stock 125 492
Cumulative dividends
of nonredeemable
preferred stock -- 113
----------- -----------
Net income
available to
common and
participating
preferred
stockholders $ 6,177 $ 4,649
=========== ===========
Net income allocated
to common
stockholders $ 6,177 $ 104
=========== ===========
Net income allocated
to participating
preferred
stockholders $ -- $ 4,545
=========== ===========
Earnings per common
share:
Basic $ 0.45 $ 0.48
=========== ===========
Diluted $ 0.32 $ 0.30
=========== ===========
Shares used in
computing common per
share amounts:
Basic 13,870,389 217,519
Diluted 19,650,953 17,759,083
(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)
52 Weeks 53 Weeks
Ended Ended
January 1, % of Total January 3, % of Total
2005 Revenue(1) 2004 Revenue(1)
----------------------- ----------------------
Revenues: (restated)
Net retail sales $ 300,469 99.6% $ 213,427 99.9%
Franchise fees 846 0.3 245 0.1
Licensing revenue 347 0.1 -- 0.0
----------- ---------- ----------- ----------
Total revenues 301,662 100.0 213,672 100.0
----------- ---------- ----------- ----------
Costs and expenses:
Costs of merchandise
sold 151,588 50.5 116,287 54.5
Selling, general, and
administrative 115,254 38.2 81,091 38.0
Store preopening 2,186 0.7 3,859 1.8
Interest expense
(income), net (299) (0.1) (58) (0.0)
----------- ---------- ----------- ----------
Total costs and
expenses 268,729 89.1 201,179 94.2
----------- ---------- ----------- ----------
Income before
income taxes 32,933 10.9 12,493 5.8
Income tax expense 12,934 4.3 4,875 2.3
----------- ---------- ----------- ----------
Net income 19,999 6.6 7,618 3.6
Cumulative dividends
and accretion of
redeemable preferred
stock 1,262 1,970
Cumulative dividends
of nonredeemable
preferred stock 263 455
----------- -----------
Net income
available to
common and
participating
preferred
stockholders $ 18,474 $ 5,193
=========== ===========
Net income allocated
to common
stockholders $ 8,519 $ 116
=========== ===========
Net income allocated
to participating
preferred
stockholders $ 9,955 $ 5,077
=========== ===========
Earnings per common
share:
Basic $ 2.30 $ 0.53
=========== ===========
Diluted $ 1.07 $ 0.43
=========== ===========
Shares used in
computing common per
share amounts:
Basic 3,702,365 217,519
Diluted 18,616,435 17,546,348
(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 data)
January 1, January 3,
2005 2004
------------ ------------
(restated)
ASSETS
Current assets:
Cash and cash equivalents $67,327 $20,601
Inventories 30,791 22,573
Receivables 3,792 2,163
Prepaid expenses and other current assets 5,320 4,215
Deferred tax assets 2,725 1,531
------------ ------------
Total current assets 109,955 51,083
Property and equipment, net 75,815 73,635
Goodwill - 97
Other intangible assets 1,411 1,493
Other assets, net 2,056 1,902
------------ ------------
Total Assets $189,237 $128,210
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $25,767 $21,822
Accrued expenses 13,966 6,366
Other current liabilities 22,222 12,432
------------ ------------
Total current liabilities 61,955 40,620
------------ ------------
Deferred franchise revenue 2,075 1,957
Deferred rent 26,426 23,801
Other liabilities 732 877
Deferred tax liabilities 2,539 3,220
Redeemable preferred stock, at redemption
price - 37,890
Stockholders' equity:
Nonredeemable preferred stock, at par value - 94
Common stock, par value $0.01. 196 5
Additional paid-in capital 77,708 10,918
Retained earnings 19,386 10,649
Notes receivable from officers (1,770) (1,821)
Unearned Compensation (10) -
------------ ------------
Total stockholders' equity 95,510 19,845
------------ ------------
Total Liabilities and Stockholders' Equity $189,237 $128,210
============ ============
BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Cash Flows
(dollars in thousands)
52 Weeks 53 Weeks
Ended Ended
January 1, January 3,
2005 2004
------------ ------------
(restated)
Cash flows from operating activities:
Net income $19,999 $7,618
Adjustments to reconcile net income to
net cash from operating activities:
Depreciation and amortization 14,948 12,840
Deferred taxes (1,875) 1,394
Tax benefit from exercise of non-qualified
options 410 -
Loss on disposal of property and equipment 533 340
Impairment of goodwill 97 200
Impairment charge (credit) (54) -
Stock-based compensation 1,974 -
Change in assets and liabilities:
Inventories (8,218) (1,002)
Receivables (1,629) 49
Prepaid expenses and other current assets (1,105) (3,397)
Accounts payable 3,998 4,483
Accrued expenses and other liabilities 19,449 9,245
------------ ------------
Net cash provided by operating
activities 48,527 31,770
------------ ------------
Cash flows from investing activities:
Purchases of property and equipment (16,494) (24,917)
Purchases of other assets (1,238) (1,918)
Purchase of minority interest in subsidiary - (200)
------------ ------------
Net cash used in investing activities (17,732) (27,035)
------------ ------------
Cash flows from financing activities:
Payment of cash dividend (10,000) -
Exercise of employee stock options 52 -
Collection of note receivable 144 -
Proceeds from initial public offering, net
of offering costs 25,735 -
------------ ------------
Net cash provided by financing
activities 15,931 -
------------ ------------
Net increase in cash and cash
equivalents 46,726 4,735
Cash and cash equivalents, beginning of year 20,601 15,866
------------ ------------
Cash and cash equivalents, end of year $67,327 $20,601
============ ============
BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES
Unaudited Selected Financial and Store Data
(dollars in thousands, except square foot data)
13 Weeks 14 Weeks 52 Weeks 53 Weeks
Ended Ended Ended Ended
January 1, January 3, January 1, January 3,
2005 2004 2005 2004
---------- ---------- ---------- ----------
Other financial data:
Gross margin ($)(1) $ 52,116 35,957 $ 148,881 97,140
Gross Margin (%)(1) 52.7% 49.2% 49.5% 45.5%
Capital expenditures(2) $ 5,216 4,227 $ 16,494 24,917
Depreciation and
amortization $ 4,132 3,891 $ 14,948 12,840
Store data(3):
Number of stores at end
of period(4) 170 150
Store square footage at
end of period(4) 514,986 462,484
Average net retail sales
per store(5) $ 1,857 1,605
Net retail sales per
gross square foot(6) $ 602 503
Comparable store sales
change (%)(7) 23.3% (12.5)% 18.1% (15.9)%
(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 consists of leasehold improvements, furniture
and fixtures, and computer equipment and software purchases.
(3) Excludes our webstore and seasonal and event-based locations.
(4) End of period information is the same for both quarterly and
annual periods.
(5) Average net retail sales per store represents net retail sales
from stores open throughout the entire period divided by the total
number of such stores. Calculated on an annual basis only.
(6) Net retail sales per gross square foot represents net retail sales
from stores open throughout the entire period divided by the total
gross square footage of such stores. Calculated on an annual basis
only.
(7) 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
Supplemental Information Table for Lease Accounting Changes
(dollars in thousands)
The following tables present the impact of the corrections of lease
accounting on the periods indicated:
January 3, 2004
-----------------------
As Previously
Reported(1) As Restated
------------------------
Balance Sheet Data
Property and
equipment, net $ $56,358 73,635
Accounts payable 22,187 21,822
Deferred Rent 3,403 23,801
Deferred tax
liabilities 4,281 3,220
Retained Earnings 12,343 10,649
14 Weeks Ended 53 Weeks Ended
January 3, 2004 January 3, 2004
----------------------- -----------------------
As Previously As Previously
Reported As Restated Reported(1) As Restated
------------------------ -----------------------
Statement of
Operations Data
Costs of Merchandise
Sold $ 37,107 37,078 $ 116,515 116,287
Store Preopening 343 372 3,045 3,859
Income before Income
Taxes 8,511 8,511 13,079 12,493
Income Tax Expense 3,257 3,257 5,101 4,875
Net Income 5,254 5,254 7,978 7,618
Net Income allocated
to common
stockholders 104 104 124 116
Net Income allocated
to participating
preferred
stockholders 4,545 4,545 5,429 5,077
Earnings per common
share:
Basic 0.48 0.48 0.57 0.53
Diluted 0.30 0.30 0.45 0.43
Statement of Cash
Flows Data
Net cash provided by
operating
activities 25,215 31,770
Net cash used in
investing
activities (20,480) (27,035)
(1) Certain reclassifications were made to prior years' financial
statements to be consistent with fiscal year 2004 presentation.
CONTACT: Build-A-Bear Workshop Inc., St. Louis
Investors: Molly Salky, 314-423-8000 Ext. 5353
or
Media: Jill Saunders, 314-423-8000 Ext. 5293