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Exhibit
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document)
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BUILD-A-BEAR WORKSHOP, INC. | |
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Date: May 26, 2022 | By: |
/s/ Voin Todorovic |
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Name: |
Voin Todorovic |
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Title: |
Chief Financial Officer |
ST. LOUIS--(BUSINESS WIRE)--May 26, 2022--Build-A-Bear Workshop, Inc. (NYSE: BBW) today reported results for its fiscal 2022 first quarter, the 13-week period ended April 30, 2022.
Sharon Price John, Build-A-Bear Workshop President and Chief Executive Officer, commented, “Following an outstanding performance in fiscal 2021, we are pleased to have delivered our fifth consecutive quarter of record-setting profitability with pre-tax income of $18.2 million in the first quarter of fiscal 2022. We also achieved the highest total first quarter revenues in our nearly 25-year history showing growth in both North America and Europe, in all reported business segments including direct-to-consumer, commercial and franchising business, as well as in both net retail sales and digital demand. In fact, our digital demand this quarter was greater than our total e-commerce sales for the entire 2017 fiscal year, demonstrating the progress made in our digital transformation over the last five years.
“We believe that our sustained profitable growth is largely the result of a multi-faceted, multi-year strategic plan that we have been successfully executing while navigating a highly volatile environment. Our disciplined focus and agility, particularly during the prolonged pandemic-related challenges, have played a key role in the evolution of our company into a more digitally-driven, diversified omnichannel entity that includes a dynamic and efficient vertical experiential retail concept that remains relevant to today’s consumers who have been increasingly seeking highly engaging, family-friendly activities and shopping as restrictions have lifted. Our positive business momentum has continued into our current second quarter. As we look forward, we expect to continue to drive efforts across our stated strategic pillars including implementing a broad-range of comprehensive initiatives to further our digital transformation, the on-going evolution of our retail experience and footprint, and the optimization of our solid financial position to make investments designed to generate future profitable growth and enhance shareholder value,” concluded Ms. John.
First Quarter 2022 Results (13 weeks ended April 30, 2022 compared to the 13 weeks ended May 1, 2021):
Store Activity:
Balance Sheet:
As of April 30, 2022, cash and cash equivalents totaled $26.1 million, compared to $45.9 million as of May 1, 2021. The Company noted that its reduced cash position at quarter-end compared to the prior year reflects the use of $12.5 million to repurchase shares of its common stock, payment of a special dividend of approximately $20 million, and an increased investment in working capital to support strategic initiatives intended to drive further growth. The Company finished the quarter with no borrowings under its revolving credit facility.
Since the adoption of the Company’s $25.0 million stock repurchase program adopted on November 30, 2021, the Company has utilized a total of $14.1 million to repurchase approximately 840,000 shares of its common stock as of May 25, 2022.
Total inventory at quarter-end was $77.4 million, an increase of $33.6 million from fiscal 2021 first quarter-end. The majority of the increase is expected to support projected revenue growth and strategically planned accelerated purchases intended to partially mitigate inflationary and supply chain pressures. The Company noted that it is comfortable with the composition and level of its quarter-ending inventory level.
In the fiscal 2022 first quarter, capital expenditures totaled $1.1 million compared to $0.5 million in the fiscal 2021 first quarter.
2022 Outlook:
With its positive first quarter results and continuing momentum in the current second quarter, the Company is introducing fiscal 2022 guidance including:
The Company’s guidance for growth in profitability takes into account anticipated ongoing inflationary pressures as well as its plans to mitigate the impact on its margins. The Company noted that its outlook assumes no further material changes in the operations of its supply chain including the ability to receive and ship product on a timely basis, the macro-economic environment or relevant foreign currency exchange rates.
Note Regarding Non-GAAP Financial Measures:
In this press release, the Company’s financial results are provided both in accordance with generally accepted accounting principles (GAAP) and using certain non-GAAP financial measures. In particular, the Company provides historic income and income per diluted share adjusted to exclude certain costs and accounting adjustments, which are non-GAAP financial measures. These results are included as a complement to results provided in accordance with GAAP because management believes these non-GAAP financial measures help identify underlying trends in the Company’s business and provide useful information to both management and investors by excluding certain items that may not be indicative of the Company’s core operating results. These measures should not be considered a substitute for or superior to GAAP results. These non-GAAP financial measures are defined and reconciled to the most comparable GAAP measure later in this document.
Today’s Conference Call Webcast:
Build-A-Bear Workshop will host a live internet webcast of its quarterly investor conference call at 9 a.m. ET today. The audio broadcast may be accessed at the Company’s investor relations website, http://IR.buildabear.com. The call is expected to conclude by 10 a.m. ET.
A replay of the conference call webcast will be available in the investor relations website for one year. A telephone replay will be available beginning at approximately noon ET today until midnight ET on June 2, 2022. The telephone replay is available by calling (844) 512-2921. The access code is 13718340.
About Build-A-Bear:
Build-A-Bear is a multi-generational global brand focused on its mission to “add a little more heart to life” appealing to a wide array of consumer groups who enjoy the personal expression in making their own “furry friends” to celebrate and commemorate life moments. Nearly 500 interactive brick-and-mortar retail locations operated through a variety of formats provide guests of all ages a hands-on entertaining experience, which often fosters a lasting and emotional brand connection. The company also offers engaging e-commerce/digital purchasing experiences on www.buildabear.com including its online “Bear-Builder”, the animated “Bear Builder 3D Workshop” and its age-gated adult-focused “Bear Cave”. In addition, extending its brand power beyond retail, Build-A-Bear Entertainment, a subsidiary of Build-A-Bear Workshop, Inc., is dedicated to creating engaging content for kids and adults that fulfills the company’s mission, while the company also offers products at wholesale and in non-plush consumer categories via licensing agreements with leading manufacturers. Build-A-Bear Workshop, Inc. (NYSE: BBW) posted total revenue of $411.5 million in fiscal 2021. For more information, visit the Investor Relations section of buildabear.com.
Forward-Looking Statements:
This press release contains certain statements that are, or may be considered to be, “forward-looking statements” for the purpose of federal securities laws, including, but not limited to, statements that reflect our current views with respect to future events and financial performance. We generally identify these statements by words or phrases such as “may,” “might,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “intend,” “predict,” “future,” “potential” or “continue,” the negative or any derivative of these terms and other comparable terminology. All of the information concerning our future liquidity, future revenues, margins and other future financial performance and results, achievement of operating of financial plans or forecasts for future periods, sources and availability of credit and liquidity, future cash flows and cash needs, success and results of strategic initiatives and other future financial performance or financial position, as well as our assumptions underlying such information, constitute forward-looking information.
These statements are based only on our current expectations and projections about future events. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by these forward-looking statements, including those factors discussed under the caption entitled “Risks Related to Our Business” and “Forward-Looking Statements” in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on April 14, 2022 and other periodic reports filed with the SEC which are incorporated herein.
All of our forward-looking statements are as of the date of this Press Release only. In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of or any material adverse change in one or more of the risk factors or other risks and uncertainties referred to in this Press Release or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to the SEC could materially and adversely affect our continuing operations and our future financial results, cash flows, available credit, prospects and liquidity. Except as required by law, the Company does not undertake to publicly update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.
All other brand names, product names, or trademarks belong to their respective holders.
BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES | |||||||||||
Unaudited Condensed Consolidated Statements of Operations | |||||||||||
(dollars in thousands, except share and per share data) | |||||||||||
13 Weeks | 13 Weeks | ||||||||||
Ended | Ended | ||||||||||
April 30, | % of Total | May 1, | % of Total | ||||||||
2022 |
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Revenues (1) |
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2021 |
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Revenues (1) |
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Revenues: | |||||||||||
Net retail sales | $ |
112,890 |
96.0 |
$ |
89,212 |
97.3 |
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Commercial revenue |
4,286 |
3.6 |
2,109 |
2.3 |
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International franchising |
486 |
0.4 |
372 |
0.4 |
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Total revenues |
117,662 |
100.0 |
91,693 |
100.0 |
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Cost of merchandise sold: | |||||||||||
Cost of merchandise sold - retail (1) |
53,600 |
45.6 |
42,093 |
45.9 |
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Cost of merchandise sold - commercial (1) |
1,946 |
1.7 |
904 |
1.0 |
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Cost of merchandise sold - international franchising (1) |
288 |
0.2 |
268 |
0.3 |
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Total cost of merchandise sold |
55,834 |
47.5 |
43,265 |
47.2 |
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Consolidated gross profit |
61,828 |
52.5 |
48,428 |
52.8 |
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Selling, general and administrative expense |
43,620 |
37.1 |
35,242 |
38.4 |
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Interest expense, net |
18 |
0.0 |
5 |
0.0 |
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Income before income taxes |
18,189 |
15.5 |
13,181 |
14.4 |
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Income tax expense |
3,999 |
3.4 |
2,801 |
3.1 |
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Net income | $ |
14,190 |
12.1 |
$ |
10,380 |
11.3 |
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Income per common share: | |||||||||||
Basic | $ |
0.92 |
$ |
0.69 |
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Diluted | $ |
0.89 |
$ |
0.66 |
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Shares used in computing common per share amounts: | |||||||||||
Basic |
15,475,731 |
15,062,025 |
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Diluted |
15,964,433 |
15,757,033 |
(1) |
Selected statement of operations data expressed as a percentage of total revenues, except cost of merchandise sold - retail, cost of merchandise sold - commercial and cost of merchandise sold - international franchising that are expressed as a percentage of net retail sales, commercial revenue and international franchising, respectively. Percentages will not total due to cost of merchandise sold being expressed as a percentage of net retail sales, commercial revenue or international franchising and immaterial rounding. | |||||||||||||
BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES | ||||||||||||||||
Unaudited Condensed Consolidated Balance Sheets | ||||||||||||||||
(dollars in thousands, except per share data) | ||||||||||||||||
April 30, | January 29, | May 1, | ||||||||||||||
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2022 |
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2022 |
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2021 |
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ASSETS | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash, cash equivalents and restricted cash |
$ |
26,093 |
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$ |
32,845 |
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$ |
45,931 |
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Inventories, net |
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77,366 |
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71,809 |
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43,754 |
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Receivables, net |
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11,838 |
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11,701 |
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8,280 |
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Prepaid expenses and other current assets |
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12,436 |
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13,643 |
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9,798 |
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Total current assets |
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127,733 |
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129,998 |
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107,763 |
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Operating lease right-of-use asset |
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72,126 |
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77,671 |
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99,518 |
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Property and equipment, net |
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46,691 |
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48,966 |
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50,417 |
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Deferred tax assets |
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7,609 |
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7,613 |
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- |
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Other assets, net |
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2,266 |
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2,076 |
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6,685 |
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Total Assets |
$ |
256,425 |
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$ |
266,324 |
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$ |
264,383 |
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LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Accounts payable |
$ |
19,930 |
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$ |
21,849 |
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$ |
19,438 |
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Accrued expenses |
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23,444 |
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25,543 |
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16,629 |
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Operating lease liability short term |
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23,470 |
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25,245 |
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30,631 |
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Gift cards and customer deposits |
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18,770 |
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20,937 |
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18,210 |
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Deferred revenue and other |
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3,881 |
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3,808 |
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2,489 |
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Total current liabilities |
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89,495 |
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97,382 |
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87,397 |
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Operating lease liability long term |
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66,617 |
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73,307 |
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95,654 |
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Other long term liabilities |
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1,774 |
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1,952 |
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3,355 |
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Stockholders' equity: | ||||||||||||||||
Common stock, par value $0.01 per share |
|
157 |
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|
162 |
|
|
163 |
|
|||||||
Additional paid-in capital |
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71,962 |
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|
75,490 |
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73,024 |
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Accumulated other comprehensive loss |
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(12,452 |
) |
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(12,470 |
) |
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(12,532 |
) |
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Retained earnings |
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38,872 |
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30,501 |
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17,322 |
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Total stockholders' equity |
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98,539 |
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|
93,683 |
|
|
77,977 |
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Total Liabilities and Stockholders' Equity |
$ |
256,425 |
|
$ |
266,324 |
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$ |
264,383 |
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BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES | ||||||||||
Unaudited Selected Financial and Store Data | ||||||||||
(dollars in thousands) | ||||||||||
13 Weeks | 13 Weeks | |||||||||
Ended | Ended | |||||||||
April 30, | May 1, | |||||||||
2022 |
2021 |
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Other financial data: | ||||||||||
Retail gross margin ($) (1) | $ |
59,290 |
$ |
47,119 |
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Retail gross margin (%) (1) |
52.5% |
52.8% |
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Capital expenditures (2) | $ |
1,070 |
$ |
491 |
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Depreciation and amortization | $ |
3,250 |
$ |
3,127 |
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Store data (3): | ||||||||||
Number of corporately-managed retail locations at end of period | ||||||||||
North America |
306 |
306 |
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Europe |
39 |
48 |
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Asia |
— |
1 |
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Total corporately-managed retail locations |
345 |
355 |
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Number of franchised stores at end of period |
64 |
72 |
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Corporately-managed store square footage at end of period (4) | ||||||||||
North America |
721,966 |
715,672 |
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Europe |
58,216 |
71,609 |
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Asia |
— |
1,750 |
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Total square footage |
780,182 |
789,031 |
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(1) |
Retail gross margin represents net retail sales less cost of merchandise sold - retail. Retail gross margin percentage represents retail gross margin divided by net retail sales. | |||||||
(2) |
Capital expenditures represents cash paid for property, equipment, and other assets. | |||||||
(3) |
Excludes e-commerce. North American stores are located in the United States and Canada. In Europe, stores are located in the United Kingdom and Ireland. Seasonal locations not included in store count. | |||||||
(4) |
Square footage for stores located in North America is leased square footage. Square footage for stores located in Europe is estimated selling square footage. Seasonal locations not included in the store count. | |||||||
BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES | ||||||
Reconciliation of GAAP to Non-GAAP figures | ||||||
(dollars in thousands) | ||||||
13 Weeks | 13 Weeks | |||||
Ended | Ended | |||||
April 30, | May 1, | |||||
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2022 |
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2021 |
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Income before income taxes (pre-tax) |
$ |
18,189 |
$ |
13,181 |
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Interest expense, net |
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18 |
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5 |
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Depreciation and amortization expense |
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3,250 |
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3,127 |
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Earnings before interest, taxes, depreciation and amortization (EBITDA) |
$ |
21,458 |
$ |
16,313 |
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Fiscal 2022 | ||||||
Guidance | ||||||
(in millions) | ||||||
Income before income taxes (pre-tax) | $52 - $62 | |||||
Interest (income) expense, net |
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- |
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Depreciation and amortization expense |
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13 |
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Earnings before interest, taxes, depreciation and amortization (EBITDA) | $65 - $75 |
Investors:
Voin Todorovic
Build-A-Bear Workshop
(314) 423-8000 x5221
Media:
PR@buildabear.com