Build-A-Bear Workshop, Inc. Reports Outstanding Growth in Sales and Net Income in the Fiscal 2004 Fourth Quarter and Full Year.ST. LOUIS -- Build-A-Bear Workshop Build-A-Bear Workshop (NYSE: BBW) is an American retailer that sells customizable teddy bears and other stuffed animals. Build-A-Bear is the largest of the create-your-own animal chains with the other companies in the business consisting of regional and/or locally-owned , Inc. (NYSE NYSE See: New York Stock Exchange :BBW BBW Big Beautiful Women BBW Big Black Women BBW Beautiful Black Women BBW Broadband Wireless BBW Bath & Body Works BBW Big Bad Wolf BBW Buyer Beware BBW Broken Bow, Nebraska (Airport Code) BBW Brake-By-Wire ): --Fourth quarter net income increased 19.9%, slightly exceeding company guidance. Full year net income increased 162.5%. --Fourth quarter earnings per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. 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 diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of in 2005. Build-A-Bear Workshop, Inc. (NYSE:BBW), an interactive entertainment retailer of customized stuffed animals
A stuffed animal is toy animal stuffed with straw, beans, cotton or other similar materials. Some stuffed animals are very old – home made cloth dolls stuffed with straw go back to at least the , 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 Raising awareness is a common phrase advocacy groups use to justify a particular event, brochure or even the entire organization. Raising awareness refers to alerting the general public that a certain issue exists and should be approached the way the group desires. . We realized revenue contribution from international franchising and third-party licensing - businesses that we expect to increasingly contribute to our bottom-line bot·tom-line adj. 1. Concerned exclusively with costs and profits: bottom-line issues. 2. Ruthlessly realistic; pragmatic: a bottom-line political strategy. 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 A baseball park, baseball stadium, or ball park / ballpark is the field of play in the game of baseball and the spectator seating areas or any other features around it. 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 Easter [A.S. Eastre, name of a spring goddess], chief Christian feast, commemorating the resurrection of Jesus after his crucifixion. In the West, Easter is celebrated on the Sunday following the full moon next after the vernal equinox (see calendar); thus, it 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 pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta , $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 Occupancy costs are the whole life costs of buildings and their associated land from occupancy until disposal. These costs may be incurred on a regular or irregular basis. Occupancy costs are those costs related to occupying a space including; rent, real estate taxes, personal 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 BABW Build-A-Bear Workshop ) retail stores in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , 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 Denmark (dĕn`märk), Dan. Danmark, officially Kingdom of Denmark, kingdom (2005 est. pop. 5,432,000), 16,629 sq mi (43,069 sq km), N Europe. (2 stores) and Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. (2 stores) -- and closed one store in Seoul Seoul (sā`  l, sā` l, sōl), city (1995 pop. 10,229,262), capital of South Korea, NW South Korea, on the Han River. , South Korea Korea (kôrē`ə, kə–), Korean Hanguk or Choson, region and historic country (85,049 sq mi/220,277 sq km), E Asia. at the end of December December: see month. 2004. The South Korea franchise has been transferred to a new franchisee
which will reopen re·o·pen tr. & intr.v. re·o·pened, re·o·pen·ing, re·o·pens 1. To open or be opened again: Officials reopened the airport after the snow was cleared. Schools reopen in September. 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 Clarification The removal of small amounts of fine, particulate solids from liquids. The purpose is almost invariably to improve the quality of the liquid, and the removed solids often are discarded. of Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting provided by the Chief Accountant A person who has the requisite skill and experience in establishing and maintaining accurate financial records for an individual or a business. The duties of an accountant may include designing and controlling systems of records, auditing books, and preparing financial statements. of the Securities and Exchange Commission. As a result of this review, and discussions with its independent auditor Independent Auditor An external auditor with a certified public accounting designation that qualifies him or her to provide an auditor's report. Notes: These auditors aren't affiliated with the company being audited. , the company has corrected its lease accounting methods and will restate re·state tr.v. re·stat·ed, re·stat·ing, re·states To state again or in a new form. See Synonyms at repeat. re·state prior period financial statements in its annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for fiscal 2004. Historically, the company had recognized rent expense for leases on a straight-line straight-line adj. 1. Lying in a straight line. 2. Relating to a device whose linkage produces or copies motion in straight lines. 3. basis beginning on the earlier of the store opening date or lease commencement date. This had the effect of excluding the build-out Build-out is an urban planner’s estimate of the amount and location of potential development for an area. Build-out is one step of the land use planning process. Evaluation of potential development impacts begins with a build-out analysis. 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 Leasehold Improvement Improvements on a leased asset that increase the value of the asset. Notes: A leasehold improvement is classified as an asset that must be depreciated over time. . 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 Vesting The process by which employees accrue non-forfeitable rights over employer contributions that are made to the employee's qualified retirement plan account. Notes: period of the options. As a result of the initial public offering (priced on October October: see month. 27, 2004) all of these option grants became fully vested vested adj. referring to having an absolute right or title, when previously the holder of the right or title only had an expectation. Examples: after 20 years of employment Larry Loyal's pension rights are now vested. (See: vest, vested remainder) . 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 (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ) are expected to be in the range of $1.29 to $1.35 and comparable store sales growth is expected to be approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 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 July: see month. 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 This article is about the lead ship, store, or product of a group. For other uses, see Flagship (disambiguation). A flagship is the ship used by the commanding officer of a group of naval ships. store in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. , 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 SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 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 Missouri, state, United States Missouri (mĭz r`ē, –ə), one of the midwestern states of the United States. , on Thursday Thursday: see week. , May 12, 2005, at 10:00
a.m. local time.Today's Conference Call Webcast Today at 9:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy , 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 February: see month. 2005 the company operated 170 stores in 40 states and Canada. With the opening of its first international store in Sheffield Sheffield, city, England Sheffield, city (1991 pop. 470,685), N England, at the confluence of the Don River and four tributaries. Sheffield was one of the leading industrial cities of England. It has been a center of cutlery manufacture since the 14th cent. , England England, the largest and most populous portion of the United Kingdom of Great Britain and Northern Ireland (1991 pop. 46,382,050), 50,334 sq mi (130,365 sq km). It is bounded by Wales and the Irish Sea on the west and Scotland on the north. 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 teddy bear cuddly commodity named after President Theodore Roosevelt. [Am. Hist.: Frank, 46] See : Cuteness business. In November November: see month. 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 Adj. 1. award-winning - having received awards; "this award-winning bridge spans a distance of five miles" website at www.buildabear.com. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 Final Prospectus A legal document stating the price of a newly issued security, the delivery date, and other facts that are important for investors. Notes: The final prospectus must be given to every investor who purchases a new issue of registered securities. 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 relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc 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 shopping mall or shopping centre Collection of independent retail stores, services, and parking areas constructed and maintained by a management firm as a unit. It is a 20th-century adaptation of the historical marketplace. In the U.S. 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 COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. ; (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 MERCHANDISE. By this term is understood all those things which merchants sell either wholesale or retail, as dry goods, hardware, groceries, drugs, &c. It is usually applied to personal chattels only, and to those which are not required for food or immediate support, but such as remain may be disrupted dis·rupt tr.v. dis·rupt·ed, dis·rupt·ing, dis·rupts 1. To throw into confusion or disorder: Protesters disrupted the candidate's speech. 2. ; (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 The encroachment, breach, or violation of a right, law, regulation, or contract. The term is most frequently used in reference to the invasion of rights secured by Copyright, patent, or trademark. or misappropriation misappropriation n. the intentional, illegal use of the property or funds of another person for one's own use or other unauthorized purpose, particularly by a public official, a trustee of a trust, an executor or administrator of a dead person's estate, or by any 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 fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. terms, or may violate the terms of our current leases; (16) we may experience failures in our communications or information systems; (17) terrorism terrorism, the threat or use of violence, often against the civilian population, to achieve political or social ends, to intimidate opponents, or to publicize grievances. or the uncertainty of future terrorist attacks or war could reduce consumer confidence and mall mall: see shopping center. (World-Wide Web) mall - A collection of World-Wide Web documents featuring commercial products and services, usually served by one particualr Internet access provider. traffic; (18) we may become subject to challenges relating to overtime Overtime is the amount of time someone works beyond normal working hours. Normal hours may be determined in several ways:
said of conduct not conforming with professional ethics. practices by manufacturers of our merchandise, and (20) we may improperly im·prop·er adj. 1. Not suited to circumstances or needs; unsuitable: improper shoes for a hike; improper medical treatment. 2. obtain or be unable to protect information from our guests in violation VIOLATION. An act done unlawfully and with force. In the English stat. of 25 E. III., st. 5, c. 2, it is declared to be high treason in any person who shall violate the king's companion; and it is equally high treason in her to suffer willingly such 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 Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. 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.
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