- Generates $91.7 million in total revenues, an increase of
96.7% compared to the fiscal 2020 first quarter and 8.7% compared
to the fiscal 2019 first quarter
- E-commerce demand expands by 87% compared to the fiscal 2020
first quarter
- Gross profit margin is 52.8% compared to 17.3% in the fiscal
2020 first quarter
- Delivers pre-tax income of $13.2 million, reaching the
highest in the Company’s history for its first quarter, an
improvement of $31.9 million compared to the fiscal 2020 first
quarter and $10.8 million compared to the fiscal 2019 first
quarter
- Increases fiscal 2021 annual guidance for EBITDA to $28
million to $32 million
Build-A-Bear Workshop, Inc. (NYSE: BBW) today reported results
for its fiscal 2021 first quarter, the 13-week period ended May 1,
2021.
Sharon Price John, Build-A-Bear Workshop President and Chief
Executive Officer, commented, “We delivered one of the strongest
first quarters in our Company’s nearly 25-year history including a
96.7% increase in total revenues compared to the fiscal 2020 first
quarter and an 8.7% increase versus the fiscal 2019 period. We grew
pre-tax income to $13.2 million, an improvement of $31.9 million
compared to the loss in the prior year’s quarter and $10.8 million
compared to the 2019 period. We saw sales growth in both our
brick-and-mortar stores and digital channels even with our
locations in Europe temporarily closed for the majority of the
period due to local COVID restrictions. We believe the improvement
in sales was driven by the strength of the emotional connection
that has kept Build-A-Bear a desired and relevant brand, strong
merchandise mix and improved digital marketing programs along with
the benefit of the stimulus package and pent-up consumer
demand.
“I’m proud of our organization’s ability to remain agile and
successfully pivot to aggressively evolve our digital capabilities,
including a drive to enhance our e-commerce experience, increase
omnichannel integration, maintain a flexible real estate portfolio
with high lease optionality and diversify revenue streams to
leverage our powerful brand, putting us in a positive position with
favorable momentum. As a testament to the strength of the brand, we
recently surpassed over 200 million furry friends sold since the
company was established in 1997,” Ms. John continued.
“As we look forward, we believe the initiatives and investments
that were put in place prior to the pandemic, and in many cases
accelerated during the pandemic, are delivering improved results,
which we expect to continue. While trends may moderate as the year
progresses, thus far, sales in the current second quarter have
remained strong, providing us the confidence to increase our profit
guidance for this fiscal year. With a solid balance sheet and
intense focus on our strategic priorities, we expect fiscal 2021 to
represent a year of significant accomplishments and progress toward
our objective to generate long term sustained profitable growth,”
concluded Ms. John.
First Quarter 2021 Results (13 weeks ended May 1, 2021
compared to the 13 weeks ended May 2, 2020):
- Total revenues were $91.7 million, a 96.7% increase compared to
$46.6 million in the fiscal 2020 first quarter and an 8.7% increase
from $84.4 million in the fiscal 2019 first quarter;
- Net retail sales were $89.2 million, a 95.4% increase compared
to $45.6 million in the fiscal 2020 first quarter and a 10.1%
increase compared to $81.0 million in the fiscal 2019 first
quarter;
- Consolidated e-commerce demand (orders generated online to be
fulfilled from either the Company’s warehouse or its stores) rose
87% compared to the fiscal 2020 first quarter and 194% compared to
fiscal 2019 first quarter;
- Commercial and international franchise revenues were $2.5
million compared to $1.0 million in the fiscal 2020 first quarter
and $3.3 million in the fiscal 2019 first quarter;
- Gross profit margin was 52.8%, the highest rate for a first
quarter in the Company’s history, compared to 17.3% in the fiscal
2020 first quarter and 45.3% in the fiscal 2019 first quarter. The
gross profit margin expanded by 3,550 basis-points compared to 2020
and 750 basis-points versus 2019 despite continuing impact from the
pandemic and temporary stores closures due to local restrictions.
The 2021 results reflected leverage on fixed occupancy expense and
expansion in merchandise margin;
- Selling, general and administrative (“SG&A”) expenses were
$35.2 million, or 38.4% of total revenues, compared to $26.7
million, or 57.3% of total revenues in the fiscal 2020 first
quarter. The increase in SG&A expenses, as compared to the
fiscal 2020 first quarter, was driven by the inclusion of store
labor costs given the re-opening of substantially all of the
Company’s North American store base;
- GAAP pre-tax income was $13.2 million compared to pre-tax loss
of $18.7 million in the fiscal 2020 first quarter, an improvement
of $31.9 million, and pre-tax income of $2.4 million in the fiscal
2019 first quarter, an improvement of $10.8 million;
- Adjusted pre-tax income was $12.3 million compared to adjusted
pre-tax loss of $12.4 million in the fiscal 2020 first
quarter;
- Income tax expense was $2.8 million with an effective tax rate
of 21.3% compared to $2.5 million with an effective rate of (13.6%)
in the fiscal 2020 first quarter. The tax rate in the fiscal 2020
first quarter included a $3.3 million non-cash income tax charge,
or $0.22 per share, related to a valuation allowance against net
deferred tax assets;
- Net income was $10.4 million, or $0.66 per diluted share,
compared to net loss of $21.2 million, or ($1.42) per share, in the
fiscal 2020 first quarter; and
- Adjusted net income was $9.5 million, or $0.60 per diluted
share, compared to adjusted net loss of $12.4 million, or ($0.83)
per share in the fiscal 2020 first quarter.
Store Activity:
- As of May 1, 2021, the Company had 355 corporately-managed
stores. The Company noted that its locations in the United Kingdom
and Ireland began the quarter closed due to COVID-related
government mandates with the majority reopening on April 12, 2021.
The Company maintains a high level of lease optionality with over
70% of its corporately-managed stores having a lease event within
the next three years.
- Separately, locations associated with the Company’s third-party
retail model with relationships that include Carnival Cruise Lines,
Great Wolf Lodge Resorts, Landry’s and Beaches Family Resorts, as
well as international franchise locations, were either closed or
operated under restrictions due to COVID for a portion of the 2021
first quarter.
Balance Sheet:
At the end of the fiscal 2021 first quarter, the Company had
cash and cash equivalents totaling $45.9 million compared to $21.9
million at the end of the fiscal 2020 first quarter. The Company’s
strong business performance and profitability in the fiscal 2021
first quarter helped drive the increase partially offset by the
timing of inventory receipts, deferred rent payments for 2020
obligations and planned capital expenditures. Inventory at quarter
end was $43.8 million, a $9.5 million decline from the fiscal 2020
first quarter. The Company expects its cash balance to fluctuate
throughout the year as it builds its inventory levels and makes
deferred rent payments. The Company is actively prioritizing
opportunities to accelerate investments with the goal of continuing
to drive profitable growth for the enhancement of shareholder
value.
In the fiscal 2021 first quarter, capital expenditures totaled
$0.5 million compared to $2.8 million in the fiscal 2020 first
quarter.
Outlook:
While the Company had anticipated the reopening of its European
stores and an increase in demand in North America as vaccines were
more fully rolled out when it provided annual guidance on its
fourth quarter call on March 10, 2021, the Company believes its
business performance has it positioned to exceed those
expectations.
- For fiscal 2021, the Company is introducing guidance that its
total revenues are expected to exceed fiscal 2019 total revenues of
$338.5 million. The Company reports that its sales trend in the
fiscal 2021 second quarter remains strong and expects to report
growth in total revenues over both the fiscal 2020 and 2019
periods. It notes that in the fiscal 2020 second quarter,
e-commerce was its only channel of revenue for the majority of the
period leading to growth of 299% over the fiscal 2019 second
quarter. With the reopening of its brick-and-mortar stores, the
Company expects e-commerce demand in its fiscal 2021 second quarter
to be essentially flat compared to the prior year’s period while
still representing a triple digit increase over 2019. On an annual
basis, the Company continues to expect strong growth in e-commerce
demand over both fiscal 2020 and 2019;
- The Company is increasing its guidance range for fiscal 2021
EBITDA to $28 million to $32 million, representing an increase from
its previous guidance to be higher than fiscal 2019 EBITDA of $15.3
million;
- In addition, for fiscal 2021, the Company currently expects
capital expenditures to be in the range of $5 to $10 million and
for depreciation and amortization to be in the range of $13 to $14
million.
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, 2021. 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 an engaging
e-commerce/digital purchasing experience called the “Bear-Builder”
at www.buildabear.com. 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 $255.3 million in fiscal 2020. 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 16, 2020 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
May 1,
% of Total
May 2,
% of Total
2021
Revenues (1)
2020
Revenues (1)
Revenues:
Net retail sales $
89,212
97.3
$
45,647
97.9
Commercial revenue
2,109
2.3
333
0.7
International franchising
372
0.4
644
1.4
Total revenues
91,693
100.0
46,624
100.0
Cost of merchandise sold:
Cost of merchandise sold - retail (1)
42,093
47.2
33,352
73.1
Store asset impairment
—
0.0
4,819
10.6
Cost of merchandise sold - commercial (1)
904
42.9
140
42.0
Cost of merchandise sold - international franchising (1)
268
72.0
255
39.6
Total cost of merchandise sold
43,265
47.2
38,566
82.7
Consolidated gross profit
48,428
52.8
8,058
17.3
Selling, general and administrative expense
35,242
38.4
26,725
57.3
Interest expense (income), net
5
0.0
(3)
(0.0)
Income (loss) before income taxes
13,181
14.4
(18,664)
(40.0)
Income tax expense
2,801
3.1
2,540
5.4
Net income (loss) $
10,380
11.3
$
(21,204)
(45.5)
Income (loss) per common share:
Basic $
0.69
$
(1.42)
Diluted $
0.66
$
(1.42)
Shares used in computing common per share amounts:
Basic
15,062,025
14,926,097
Diluted
15,757,033
14,926,097
(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)
May 1,
May 2,
2021
2020
ASSETS
Current assets: Cash, cash equivalents and
restricted cash
$
45,931
$
21,851
Inventories, net
43,754
53,238
Receivables, net
8,280
7,099
Prepaid expenses and other current assets
9,798
5,896
Total current assets
107,763
88,084
Operating lease right-of-use asset
99,518
124,112
Property and equipment, net
50,417
61,626
Other assets, net
6,685
3,005
Total Assets
$
264,383
$
276,827
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: Accounts payable
$
19,438
$
22,905
Accrued expenses
16,629
10,395
Operating lease liability short term
30,631
32,963
Gift cards and customer deposits
18,210
18,530
Deferred revenue and other
2,489
2,603
Total current liabilities
87,397
87,396
Operating lease liability long term
95,654
118,416
Deferred franchise revenue
884
915
Other liabilities
2,471
1,643
Stockholders' equity: Common stock, par value $0.01
per share
163
155
Additional paid-in capital
73,024
71,491
Accumulated other comprehensive loss
(12,532
)
(11,909
)
Retained earnings
17,322
8,720
Total stockholders' equity
77,977
68,457
Total Liabilities and Stockholders' Equity
$
264,383
$
276,827
BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES
Unaudited Selected Financial and Store Data (dollars in
thousands)
13 Weeks 13 Weeks
Ended Ended May 1, May 2,
2021
2020
Other financial data:
Retail gross margin ($) (1) $
47,119
$
12,295
Retail gross margin (%) (1)
52.8
%
26.9
%
Capital expenditures (2) $
491
$
2,849
Depreciation and amortization $
3,127
$
3,457
Store data (3): Number of
corporately-managed retail locations at end of period North
America
306
313
Europe
48
55
Asia
1
1
Total corporately-managed retail locations
355
369
Number of franchised stores at end of period
72
80
Corporately-managed store square footage at end of
period (4) North America
715,672
716,760
Europe
71,609
78,786
Asia
1,750
1,750
Total square footage
789,031
797,296
(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. In Asia, the store is located in China.
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 Results (dollars in
thousands, except per share data)
13 Weeks
13 Weeks Ended Ended May 1, May
2,
2021
2020
Income (loss) before income taxes (pre-tax)
$
13,181
$
(18,664
)
Income (loss) before income tax adjustments: United Kingdom
Lockdown Business & Restart Grants (1)
(884
)
-
COVID-19 activity (2)
12
20
Impairment and bad debt (3)
168
5,408
Foreign exchange (gains) losses (4)
(195
)
846
Adjusted income (loss) before income taxes (adjusted pre-tax)
12,282
(12,390
)
Income tax (expense) benefit
(2,801
)
(2,540
)
Tax adjustments: Income tax impact: adjustments (5)
-
-
Income tax impact: CARES Act (6)
-
(773
)
Valuation allowance (7)
-
3,272
Adjusted income tax (expense) benefit
(2,801
)
(41
)
Net (loss) income
10,380
(21,204
)
Adjustments
(899
)
8,773
Adjusted net (loss) income
$
9,481
$
(12,431
)
Net (loss) income per diluted share (EPS)
$
0.66
$
(1.42
)
Adjusted net (loss) income per diluted share (adjusted EPS)
$
0.60
$
(0.83
)
Reconciliation of Non-GAAP figures (dollars in
millions)
Forecasted Actuals
2021
2019
Income before income taxes (pre-tax) $15 - $18
$
1.6
Interest
-
-
Depreciation and Amortization
13 - 14
13.7
Earnings before interest, taxes, depreciation and amortization
(EBITDA) $28 - $32
$
15.3
(1
)
Represents the business and restart grants received from the United
Kingdom government for business in the retail, hospitality and
leisure sectors. These grants were provided on a per-property basis
to support businesses through the latest lockdown restrictions as a
result of the COVID-19 pandemic and to resume business when
restrictions were eased.
(2
)
Represents COVID-19 related expenses at our stores, warehouse, and
headquarters.
(3
)
Represents non-cash adjustments including asset impairment charges
related to store fixed assets and right-of-use operating lease
assets and bad debt expense in the 13 weeks ending May 1, 2021 and
May 2, 2020.
(4
)
Represents the consolidated impact of foreign exchange rates on the
re-measurement of balance sheet items not denominated in functional
currency recorded under the provisions of U.S. GAAP. This does not
include any impact on margin associated with the translation of
revenues or the foreign subsidiaries' purchase of inventory in U.S.
dollars.
(5
)
As a result of the Company's full, global valuation allowance, the
Company cannot realize an income tax benefit on these adjustments
for the first quarters of fiscal 2021 and 2020.
(6
)
Represents the impact of the technical correction related to
qualified leasehold improvements resulting from the CARES Act
occurring in the first quarter of fiscal 2020
(7
)
Represents the valuation allowance recorded on its net deferred tax
assets in North America in the first quarter of fiscal 2020.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210526005426/en/
Investors: Voin Todorovic Build-A-Bear Workshop (314) 423-8000
x5221
Media: PR@buildabear.com
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