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(State or Other Jurisdiction |
(Commission |
(IRS Employer |
of Incorporation) |
File Number) |
Identification No.) |
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(Address of Principal Executive Offices) |
(Zip Code) |
Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Item 2.02. |
Results of Operations and Financial Condition. |
Item 9.01. | Financial Statements and Exhibits. |
Exhibit
Number
|
Description of Exhibit |
99.1 | Press Release dated May 25, 2023 |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
BUILD-A-BEAR WORKSHOP, INC. | ||
Date: May 25, 2023 |
By: |
/s/ Voin Todorovic |
Name: | Voin Todorovic | |
Title: | Chief Financial Officer |
ST. LOUIS--(BUSINESS WIRE)--May 25, 2023--Build-A-Bear Workshop, Inc. (NYSE: BBW) today reported results for its fiscal 2023 first quarter, the 13-week period ended April 29, 2023.
Sharon Price John, Build-A-Bear Workshop President and Chief Executive Officer commented, “Following our record-breaking performance in fiscal 2022, where we posted the highest annual profit in our company’s 25-year history, we are pleased to be on track for another record-breaking year, reporting our best-ever first quarter EPS. We attribute our continuing record performance to the on-going disciplined execution of our multi-year strategic growth plan. Over the past quarter century, the Build-A-Bear brand has created a deep emotional bond with our cherished guests, transcending age barriers and extending our reach from children to teenagers and adults alike. Our expansion efforts encompass growing our retail footprint through stores and online platforms, enabling us to broaden our consumer base and meet their needs, whether through our hands-on, personalized in-store experience, through unique and memorable gifts, or collecting limited edition and exclusive furry friends. Additionally, we are investing in captivating entertainment initiatives that enable us to foster even deeper connections with our consumers.”
Ms. John concluded, “The positive momentum has continued into the second quarter, and we are reiterating our annual guidance. With the growth opportunities we see ahead, we look to a promising future for our business and remain committed to continuing to increase value for our shareholders.”
First Quarter 2023 Results (13 weeks ended April 29, 2023 compared to the 13 weeks ended April 30, 2022):
Store Activity:
As of April 29, 2023, the Company had 482 global locations through a combination of its corporately-managed, third-party retail and international franchise models. This reflects 349 corporately-managed stores with one net closure in the fiscal 2023 first quarter compared to the beginning of the fiscal year.
Through the Company’s third-party retail business model there were 70 locations at the end of the 2023 first quarter with relationships that include Carnival Cruise Lines, Great Wolf Lodge Resorts, Landry’s, and Beaches Family Resorts, unchanged from the beginning of the fiscal year.
The Company’s international franchisees operated 63 locations at the end of the fiscal 2023 first quarter reflecting four net closures compared to the beginning of the fiscal year.
Balance Sheet:
As of April 29, 2023, cash and cash equivalents totaled $32.8 million compared to $26.1 million as of April 30, 2022. Inventory at quarter end was $66.5 million reflecting a decline of $10.9 million, or 14.1%, from April 30, 2022. The Company remains comfortable with the level and composition of its inventory. The Company finished the quarter with no borrowings under its revolving credit facility.
During the first quarter of fiscal 2023, the Company utilized $3.1 million in cash to repurchase 132,385 shares of its common stock. Subsequent to quarter end, the Company utilized an additional $3.4 million in cash to repurchase 156,009 shares of its common stock. As of May 24, 2023, the Company had $40.0 million available under the current $50.0 million stock repurchase program adopted on August 31, 2022.
Fiscal year-to-date, the Company returned $28.6 million to shareholders, reflecting dividend payments of $22.1 million and share repurchases of $6.5 million.
In the fiscal 2023 first quarter, capital expenditures totaled $3.1 million compared to $1.1 million in the fiscal 2022 first quarter. The increase in capital expenditures primarily reflected investment in information technology and store expansion.
2023 Outlook:
The Company is reaffirming its fiscal 2023 outlook with expectations of delivering growth in total revenues and pre-tax income compared to fiscal 2022. While the Company notes that its fiscal 2023 is a 53-week year compared to a 52-week year in fiscal 2022, it expects to deliver growth in total revenues and pre-tax income versus the prior year exclusive of the projected benefit of the 53rd week. For reference, the additional week in fiscal 2023, which will be reflected in the Company’s fourth quarter, is estimated to be $7 million in total revenues with approximately 35% flow-through to EBITDA.
For fiscal 2023, the Company continues to expect:
The Company’s guidance considers a variety of factors ranging from anticipated ongoing inflationary pressures to the expected benefit of reduced freight costs. Additionally, 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 and geo-political 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 adjusted to exclude certain costs, 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 dial-in number for the live conference call is (877) 407-3982 or (201) 493-6780 for international callers. The access code is Build-A-Bear. 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 1, 2023. The telephone replay is available by calling (844) 512-2921. The access code is: 13738110.
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 experience 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” as well as the “Bear Builder 3D Workshop”. 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 revenues of $467.9 million in fiscal 2022. 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 29, |
% of Total |
April 30, |
% of Total |
||||||||||||
2023 |
Revenues (1) |
2022 |
Revenues (1) |
||||||||||||
Revenues: | |||||||||||||||
Net retail sales | $ |
112,096 |
|
93.4 |
|
$ |
112,890 |
96.0 |
|||||||
Commercial revenue |
6,688 |
|
5.6 |
|
4,286 |
3.6 |
|||||||||
International franchising |
1,266 |
|
1.0 |
|
486 |
0.4 |
|||||||||
Total revenues |
120,050 |
|
100.0 |
|
117,662 |
100.0 |
|||||||||
Cost of merchandise sold: | |||||||||||||||
Cost of merchandise sold - retail (1) |
50,904 |
|
45.4 |
|
53,600 |
47.5 |
|||||||||
Cost of merchandise sold - commercial (1) |
3,358 |
|
50.2 |
|
1,946 |
45.4 |
|||||||||
Cost of merchandise sold - international franchising (1) |
885 |
|
69.9 |
|
288 |
59.3 |
|||||||||
Total cost of merchandise sold |
55,147 |
|
45.9 |
|
55,834 |
47.5 |
|||||||||
Consolidated gross profit |
64,903 |
|
54.1 |
|
61,828 |
52.5 |
|||||||||
Selling, general and administrative expense |
45,626 |
|
38.0 |
|
43,620 |
37.1 |
|||||||||
Interest (income) expense, net |
(76 |
) |
(0.1 |
) |
18 |
0.0 |
|||||||||
Income before income taxes |
19,353 |
|
16.1 |
|
18,190 |
15.5 |
|||||||||
Income tax expense |
4,745 |
|
4.0 |
|
3,999 |
3.4 |
|||||||||
Net income | $ |
14,608 |
|
12.2 |
|
$ |
14,191 |
12.1 |
|||||||
Income per common share: | |||||||||||||||
Basic | $ |
1.01 |
|
$ |
0.92 |
||||||||||
Diluted | $ |
0.98 |
|
$ |
0.89 |
||||||||||
Shares used in computing common per share amounts: | |||||||||||||||
Basic |
14,457,858 |
|
15,475,731 |
||||||||||||
Diluted |
14,974,930 |
|
15,964,433 |
(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 29, |
January 28, |
April 30, |
|||||||||||||
2023 |
2023 |
2022 |
|||||||||||||
ASSETS |
|||||||||||||||
Current assets: | |||||||||||||||
Cash, cash equivalents and restricted cash |
$ |
32,819 |
|
$ |
42,198 |
|
$ |
26,093 |
|
||||||
Inventories, net |
|
66,489 |
|
|
70,485 |
|
|
77,366 |
|
||||||
Receivables, net |
|
13,307 |
|
|
15,374 |
|
|
11,838 |
|
||||||
Prepaid expenses and other current assets |
|
13,503 |
|
|
19,374 |
|
|
12,436 |
|
||||||
Total current assets |
|
126,118 |
|
|
147,431 |
|
|
127,733 |
|
||||||
Operating lease right-of-use asset |
|
73,780 |
|
|
71,791 |
|
|
72,126 |
|
||||||
Property and equipment, net |
|
50,385 |
|
|
50,759 |
|
|
46,691 |
|
||||||
Deferred tax assets |
|
6,642 |
|
|
6,592 |
|
|
7,609 |
|
||||||
Other assets, net |
|
4,785 |
|
|
4,221 |
|
|
2,266 |
|
||||||
Total Assets |
$ |
261,710 |
|
$ |
280,794 |
|
$ |
256,425 |
|
||||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||||||||||
Current liabilities: | |||||||||||||||
Accounts payable |
$ |
13,686 |
|
$ |
10,286 |
|
$ |
19,930 |
|
||||||
Accrued expenses |
|
27,272 |
|
|
37,358 |
|
|
23,444 |
|
||||||
Operating lease liability short term |
|
27,843 |
|
|
27,436 |
|
|
23,470 |
|
||||||
Gift cards and customer deposits |
|
18,637 |
|
|
19,425 |
|
|
18,770 |
|
||||||
Deferred revenue and other |
|
5,010 |
|
|
6,646 |
|
|
3,881 |
|
||||||
Total current liabilities |
|
92,448 |
|
|
101,151 |
|
|
89,495 |
|
||||||
Operating lease liability long term |
|
59,030 |
|
|
59,080 |
|
|
66,617 |
|
||||||
Other long-term liabilities |
|
1,260 |
|
|
1,446 |
|
|
1,774 |
|
||||||
Stockholders' equity: | |||||||||||||||
Common stock, par value $0.01 per share |
|
149 |
|
|
148 |
|
|
157 |
|
||||||
Additional paid-in capital |
|
70,324 |
|
|
69,868 |
|
|
71,962 |
|
||||||
Accumulated other comprehensive loss |
|
(12,177 |
) |
|
(12,274 |
) |
|
(12,452 |
) |
||||||
Retained earnings |
|
50,676 |
|
|
61,375 |
|
|
38,872 |
|
||||||
Total stockholders' equity |
|
108,972 |
|
|
119,117 |
|
|
98,539 |
|
||||||
Total Liabilities and Stockholders' Equity |
$ |
261,710 |
|
$ |
280,794 |
|
$ |
256,425 |
|
||||||
BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES | ||||||||||
Unaudited Selected Financial and Store Data |
||||||||||
(dollars in thousands) |
||||||||||
13 Weeks |
13 Weeks |
|||||||||
Ended |
Ended |
|||||||||
April 29, |
April 30, |
|||||||||
2023 |
2022 |
|||||||||
Other financial data: | ||||||||||
Retail gross margin ($) (1) | $ |
61,192 |
|
$ |
59,290 |
|
||||
Retail gross margin (%) (1) |
54.6 |
% |
52.5 |
% |
||||||
Capital expenditures (2) | $ |
3,065 |
|
$ |
1,070 |
|
||||
Depreciation and amortization | $ |
3,080 |
|
$ |
3,250 |
|
||||
Store data (3): | ||||||||||
Number of corporately-managed retail locations at end of period | ||||||||||
North America |
312 |
|
306 |
|
||||||
Europe |
37 |
|
39 |
|
||||||
Total corporately-managed retail locations |
349 |
|
345 |
|
||||||
Number of franchised stores at end of period |
63 |
|
64 |
|
||||||
Number of third-party retail locations at end of period |
70 |
|
62 |
|
||||||
Corporately-managed store square footage at end of period (4) | ||||||||||
North America |
726,209 |
|
721,966 |
|
||||||
Europe |
52,763 |
|
58,216 |
|
||||||
Total square footage |
778,972 |
|
780,182 |
|
(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. Store impairment is excluded from retail gross margin. |
|||||||
(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. |
|||||||
* Non-GAAP Financial Measures | ||||||||
BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES |
||||||||
Reconciliation of GAAP to Non-GAAP figures |
||||||||
(dollars in thousands) |
||||||||
13 Weeks |
13 Weeks |
|||||||
Ended |
Ended |
|||||||
April 29, |
April 30, |
|||||||
2023 |
2022 |
|||||||
Income before income taxes (pre-tax) |
$ |
19,353 |
|
$ |
18,190 |
|||
Interest (income) expense, net |
|
(76 |
) |
|
18 |
|||
Depreciation and amortization expense |
|
3,080 |
|
|
3,250 |
|||
Earnings before interest, taxes, depreciation and amortization (EBITDA) |
$ |
22,357 |
|
$ |
21,458 |
Investors:
Gary Schnierow
VP Investor Relations & Corporate Finance
Build-A-Bear Workshop
(314) 593-3233
Media:
PR@buildabear.com