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Build-A-Bear Workshop, Inc. Reports Third Quarter Fiscal 2012 Results

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
September 29, % of Total October 1, % of Total
2012 Revenues (1) 2011 Revenues (1)
Revenues:
Net retail sales $ 84,263 98.0 $ 95,378 97.9
Commercial revenue 908 1.1 1,160 1.2
Franchise fees 800   0.9   872   0.9  
Total revenues 85,971   100.0   97,410   100.0  
Costs and expenses:
Cost of merchandise sold 53,887 63.3 57,572 59.6
Selling, general and administrative 36,573 42.5 38,013 39.0
Interest expense (income), net (36 ) (0.0 ) (40 ) (0.0 )
Total costs and expenses 90,424   105.2   95,545   98.1  
Income (loss) before income taxes (4,453 ) (5.2 ) 1,865 1.9
Income tax expense (benefit) (201 ) (0.2 ) 1,011   1.0  
Net income (loss) $ (4,252 ) (4.9 ) $ 854   0.9
 
Earnings (loss) per common share:
Basic $ (0.26 ) $ 0.05  
Diluted $ (0.26 ) $ 0.05  
Shares used in computing common per share amounts:
Basic 16,473,114 17,378,486
Diluted 16,473,114 17,396,144
 
 

(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 and commercial revenue. Percentages will not total due to cost of merchandise sold being expressed as a percentage of net retail sales and commercial revenue and immaterial rounding.
 

 
BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
(dollars in thousands, except share and per share data)
           
39 Weeks 39 Weeks
Ended Ended
September 29, % of Total October 1, % of Total
2012   Revenues (1) 2011   Revenues (1)
Revenues:
Net retail sales $ 258,452 98.4 $ 269,929 98.1
Commercial revenue 1,989 0.8 3,002 1.1
Franchise fees 2,313   0.9   2,312   0.8  
Total revenues 262,754   100.0   275,243   100.0  
Costs and expenses:
Cost of merchandise sold 163,057 62.6 167,723 61.5
Selling, general and administrative 113,774 43.3 120,011 43.6
Interest expense (income), net (185 ) (0.1 ) (41 ) (0.0 )
Total costs and expenses 276,646   105.3   287,693   104.5  
Loss before income taxes (13,892 ) (5.3 ) (12,450 ) (4.5 )
Income tax benefit (1,072 ) (0.4 ) (4,377 ) (1.6 )
Net loss $ (12,820 ) (4.9 ) $ (8,073 ) (2.9 )
 
Loss per common share:
Basic $ (0.79 ) $ (0.45 )
Diluted $ (0.79 ) $ (0.45 )
Shares used in computing common per share amounts:
Basic 16,323,630 17,781,943
Diluted 16,323,630 17,781,943
 
 

(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 and commercial revenue. Percentages will not total due to cost of merchandise sold being expressed as a percentage of net retail sales and commercial revenue and immaterial rounding.
 

   
BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
(dollars in thousands, except per share data)
       
September 29, December 31, October 1,
2012 2011 2011
ASSETS
Current assets:
Cash and cash equivalents $ 22,145 $ 46,367 $ 25,106
Inventories 54,885 51,860 56,258
Receivables 4,721 7,878 4,889
Prepaid expenses and other current assets 13,569 17,854 20,646
Deferred tax assets   487     419     7,624  
Total current assets 95,807 124,378 114,523
 
Property and equipment, net 73,754 77,445 78,965
Goodwill 33,876 32,306 32,614
Other intangible assets, net 510 655 836
Other assets, net   7,218     6,787     15,625  
Total Assets $ 211,165   $ 241,571   $ 242,563  
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 35,151 $ 41,032 $ 38,544
Accrued expenses 5,981 12,128 6,039
Gift cards and customer deposits 21,180 28,323 21,670
Deferred revenue   5,455     5,285     6,803  
Total current liabilities   67,767     86,768     73,056  
 
Deferred franchise revenue 1,238 1,436 1,504
Deferred rent 20,955 23,867 25,139
Other liabilities 257 257 366
 
 
Stockholders' equity:
Common stock, par value $0.01 per share 174 174 182
Additional paid-in capital 66,782 65,402 68,999
Accumulated other comprehensive loss (7,020 ) (10,165 ) (9,506 )
Retained earnings   61,012     73,832     82,823  
Total stockholders' equity   120,948     129,243     142,498  
Total Liabilities and Stockholders' Equity $ 211,165   $ 241,571   $ 242,563  
 

     
BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES
Unaudited Selected Financial and Store Data
(dollars in thousands)
   
13 Weeks 13 Weeks 39 Weeks 39 Weeks
Ended Ended Ended Ended
September 29, October 1, September 29, October 1,
2012 2011 2012 2011
 
Other financial data:
Retail gross margin ($) (1) $ 30,771 $ 38,381 $ 96,448 $ 103,732
Retail gross margin (%) (1) 36.5 % 40.2 % 37.3 % 38.4 %
E-commerce sales $ 2,256 $ 2,452 $ 7,572 $ 7,416
Capital expenditures, net (2) $ 5,103 $ 3,759 $ 13,407 $ 9,896
Depreciation and amortization $ 5,196 $ 5,884 $ 15,832 $ 18,614
 
Store data (3):
Number of company-owned stores at end of period
North America - Traditional 283 287
North America - Non-traditional 10   12  
Total North America 293 299
Europe 58   56  
Total stores 351   355  
 
Number of franchised stores at end of period 87 76
 
Company-owned store square footage at end of period
North America - Traditional 808,925 831,531
North America - Non-traditional 14,160   21,046  
Total North America 823,085 852,577
Europe (4) 83,631   81,661  
Total square footage 906,716   934,238  
 
Comparable store sales change (%) (5)
North America (11.8 )% 0.7 % (3.4 )% (1.1 )%
Europe (7.9 )% 3.0 % (6.7 )% 0.0 %
Consolidated (11.1 )% 1.1 % (4.0 )% (0.9 )%
 

(1)

 

Retail gross margin represents net retail sales less retail cost of merchandise sold. Retail gross margin percentage represents retail gross margin divided by net retail sales.

(2)

 

Capital expenditures, net represents cash paid for property, equipment, other assets and other intangible assets.

(3)

 

North American stores are located in the United States, Canada and Puerto Rico. In Europe, stores are located in the United Kingdom and Ireland. Non-traditional stores include ballpark, zoo, hospital, airport and temporary locations. Excludes our webstores.

(4)

 

Square footage for stores located in Europe is estimated selling square footage.

(5)

 

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

Company-Owned Store Activity

               
 
 
2012
 
Thirty-nine Weeks Ended September 29, 2012 Fifty-two Weeks Ended December 29, 2012 - Projected
December 31, September 29, December 31, December 29,
2011 Opened Closed 2012 2011 Opened Closed 2012
North America
Traditional 287 1 (5 ) 283 287 2 (6 ) 283
Non-traditional 11 1 (2 ) 10 11 1 (3 ) 9
298 2 (7 ) 293 298 3 (9 ) 292
 
Europe 58 - -   58 58 2   -   60
Total 356 2 (7 ) 351 356 5   (9 ) 352
 
 
2011
Thirty-nine Weeks Ended October 1, 2011 Fifty-two Weeks Ended December 31, 2011
January 1, October 1, January 1, December 31,
2011 Opened Closed 2011 2011 Opened Closed 2011
North America
Traditional 290 - (3 ) 287 290 2 (5 ) 287
Non-traditional 15 1 (4 ) 12 15 2 (6 ) 11
305 1 (7 ) 299 305 4 (11 ) 298
 
Europe 54 3 (1 ) 56 54 5   (1 ) 58
Total 359 4 (8 ) 355 359 9   (12 ) 356
 
 
 
Our long term store real estate goal is to bring our stores back to best in class productivity and profitability. Today we believe that the optimal number of Build-A-Bear Workshop stores in North America is between 225 to 250 and approximately 70 in the United Kingdom and Ireland for a total of 295 to 320 stores. We expect to reach this level within the next two years with the closure of 50 to 60 stores.
 




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