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) June 14, 2007
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 File Number) (IRS Employer
of Incorporation) Identification No.)
1954 Innerbelt Business Center Drive
St. Louis, Missouri 63114
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(Address of Principal Executive Offices) (Zip Code)
(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 June 14, 2007, Build-A-Bear Workshop, Inc. (the "Company") announced revised
financial guidance for the second fiscal quarter of 2007 (the 13 weeks ending
June 30, 2007) and for the full fiscal year 2007.
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. The
information furnished in contained or incorporated by reference into this Item
2.02, including Exhibit 99.1 attached hereto, is being furnished and shall not
be deemed "filed" for purposes of Section 18 of the Securities and Exchange Act
of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that
section, nor shall it be deemed incorporated by reference in any filing under
the Securities Act of 1933, as amended, or the Exchange Act, regardless of any
general incorporation language in such filing. In addition, this report
(including Exhibit 99.1) shall not be deemed an admission as to the materiality
of any information contained herein that is required to be disclosed solely as a
requirement of this Item.
Forward-looking Statements
The statements contained or incorporated by reference in this Form 8-K contain
"forward-looking statements" (within the meaning of the federal securities laws)
which represent the Company'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: 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 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; our marketing initiatives may not be effective
in generating sufficient levels of brand awareness and guest traffic; we may be
unable to generate comparable store sales growth; we may be unable to open new
stores or may be unable to effectively manage our growth; we may be unable to
effectively manage our international franchises or laws relating to those
franchises may change; we may be unable to realize some of the expected benefits
of the acquisition of Amsbra and Bear Factory including making these operations
profitable; customer traffic may decrease in the shopping malls where we are
located, on which we depend to attract guests to our stores; general economic
conditions may deteriorate, which could lead to disproportionately reduced
consumer demand for our products, which represent relatively discretionary
spending; our market share could be adversely affected by a significant, or
increased, number of competitors; we may lose key personnel, be unable to hire
qualified additional personnel, or experience turnover of our management team;
the ability of our principal vendors to deliver merchandise may be disrupted;
the availability and costs of our products could be adversely affected by risks
associated with international manufacturing and trade; high petroleum products
prices could increase our inventory transportation costs and adversely affect
our profitability; we may be unable to realize the anticipated benefits from our
company-owned distribution center; fluctuations in our quarterly results of
2
operations could cause the price of our common stock to substantially decline;
we may fail to renew, register or otherwise protect our trademarks or other
intellectual property; we may have disputes with, or be sued by, third parties
for infringement or misappropriation of their proprietary rights; we may be
unable to renew or replace our store leases, or enter into leases for new stores
on favorable terms or in favorable locations, or may violate the terms of our
current leases; we may suffer negative publicity or be sued due to violations of
labor laws or unethical practices by manufacturers of our merchandise; and we
may improperly obtain or be unable to protect information from our guests in
violation of privacy or security laws or expectations. 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 December 30, 2006. 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.
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 June 14, 2007
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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: June 14, 2007 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 June 14, 2007
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Exhibit 99.1
Build-A-Bear Workshop, Inc. Revises Second Quarter and Fiscal Year Outlook
ST. LOUIS--(BUSINESS WIRE)--June 14, 2007--Build-A-Bear Workshop,
Inc. (NYSE: BBW), an interactive, entertainment retailer of customized
stuffed animals, today said that based on its net sales results for
the ten week period ended June 9, 2007, it now expects earnings per
diluted share for the second quarter (the 13 weeks ending June 30,
2007) to be in the range of $0.07 to $0.10. The company had previously
said that it had expected to report second quarter earnings per
diluted share of $0.15 to $0.19. Build-A-Bear Workshop reported
earnings per diluted share of $0.15 for the second quarter 2006.
The company said that the revised earnings guidance is primarily a
result of North American comparable store sales in the negative 7% to
9% range. The prior guidance was based upon achieving comparable store
sales in the flat to negative low-single digit range.
"We were encouraged by our sales in April, the start of our second
quarter, however recent sales trends have been below our
expectations," said Maxine Clark, Build-A-Bear Workshop chairman and
chief executive bear. "Our licensed product introductions, which based
on our research were expected to have a balanced appeal to both girls
and boys, actually appealed most strongly to boys who are a
significant part of our customer base but not our core customer. While
we supported these products with an aggressive integrated marketing
campaign, inventory and strong in-store presentation, they ultimately
did not perform as planned. We believe we can manage our inventory
positions and continue to expect our strong store economic model to
deliver top line and net income growth this year."
The revised second quarter earnings outlook continues to take into
account higher costs compared to the 2006 second quarter reflecting
increased advertising expenses as a percentage of sales,
performance-based bonus compensation expense, and language translation
costs associated with store openings in Montreal and Puerto Rico in
the second half of the year. Second quarter earnings outlook also
continues to anticipate an operating loss from the United Kingdom
operations; while the anticipated impact of expensing stock-based
compensation is approximately $0.9 million pretax ($0.5 million net of
tax or $0.03 per diluted share). The second quarter guidance includes
a reduction in deferred revenue of approximately $0.3 million pretax
($0.2 million net of tax or $0.01 per diluted share) related to the
company's frequent shopper program.
Based upon the revised second quarter guidance, the company now
expects its full year earnings per diluted share to be in the range of
$1.55 to $1.65. This guidance includes a number of assumptions
including North American comparable store sales in the negative
mid-single digit range and the anticipated impact of expensing
stock-base compensation of approximately $3.1 million pretax ($2.0
million net of tax or $0.10 per diluted share). The company had
previously provided guidance in a range of $1.65 to $1.75. In fiscal
year 2006, the company reported fully diluted earnings per share of
$1.44.
Build-A-Bear Workshop plans to release financial results for the
second quarter on Thursday, July 26, 2007, before the opening of
trading on the New York Stock Exchange.
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 275 stores in the United States, Canada, the United
Kingdom and Ireland. 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) stores, where Guests can make their own doll
friends. Build-A-Bear Workshop (NYSE: BBW) posted total revenue of
$437 million in fiscal 2006. 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 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; our marketing initiatives may not be effective in
generating sufficient levels of brand awareness and guest traffic; we
may be unable to generate comparable store sales growth; we may be
unable to open new stores or may be unable to effectively manage our
growth; we may be unable to effectively manage our international
franchises or laws relating to those franchises may change; we may be
unable to realize some of the expected benefits of the acquisition of
Amsbra and Bear Factory including making these operations profitable;
customer traffic may decrease in the shopping malls where we are
located, on which we depend to attract guests to our stores; general
economic conditions may deteriorate, which could lead to
disproportionately reduced consumer demand for our products, which
represent relatively discretionary spending; our market share could be
adversely affected by a significant, or increased, number of
competitors; we may lose key personnel, be unable to hire qualified
additional personnel, or experience turnover of our management team;
the ability of our principal vendors to deliver merchandise may be
disrupted; the availability and costs of our products could be
adversely affected by risks associated with international
manufacturing and trade; high petroleum products prices could increase
our inventory transportation costs and adversely affect our
profitability; we may be unable to realize the anticipated benefits
from our company-owned distribution center; fluctuations in our
quarterly results of operations could cause the price of our common
stock to substantially decline; we may fail to renew, register or
otherwise protect our trademarks or other intellectual property; we
may have disputes with, or be sued by, third parties for infringement
or misappropriation of their proprietary rights; we may be unable to
renew or replace our store leases, or enter into leases for new stores
on favorable terms or in favorable locations, or may violate the terms
of our current leases; we may suffer negative publicity or be sued due
to violations of labor laws or unethical practices by manufacturers of
our merchandise; and we may improperly obtain or be unable to protect
information from our guests in violation of privacy or security laws
or expectations. 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 December 30, 2006. 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 ext. 5353
or
Media:
Jill Saunders, 314-423-8000 ext. 5293