ST. LOUIS - (BUSINESS WIRE) - March 11, 2020 - Build-A-Bear Workshop, Inc. (NYSE: BBW) today reported results for the fourth quarter and fiscal year 2019 ended February 1, 2020.
Sharon Price John, Build-A-Bear Workshop President and Chief Executive Officer, commented, “In fiscal 2019, we remained focused on our key growth strategies and disciplined expense management, and although the year did not unfold on a by-quarter basis as we originally expected, we ultimately delivered annual pre-tax profit in line with the guidance that we issued at the beginning of the fiscal year. During the fourth quarter, we saw a positive shift in retail traffic and sales leading into Christmas, which then carried over into the post-holiday period with our data indicating that Build-A-Bear outpaced national traffic trends over that time. We attribute the improvement to several factors including a meaningful shift to digital marketing that benefited both our online and in-store business and helped drive an increase in sales of gift products that appealed to a broad consumer base. We also had higher sales and redemptions of gift cards, indicative of the ongoing trend-right appeal of our hands-on retail experience.”
“We believe these results, which include our ninth consecutive quarter of double-digit e-commerce expansion and an over 80% increase in commercial revenue for the year, demonstrate the success of our strategy to diversify our business model by leveraging the strength of our brand. Our business year-to-date has been positive, although we recognize the uncertainty in the evolving marketplace due to the coronavirus. As such, we are evaluating potential business scenarios while remaining focused on our long-term goal to build on the foundation and infrastructure that we have been developing for several years,” concluded Ms. John.
Fourth Quarter 2019 Highlights (13 weeks ended February 1, 2020, compared to 13 weeks ended February 2, 2019):
Fiscal Year 2019 Highlights (52 weeks ended February 1, 2020, compared to 52 weeks ended February 2, 2019):
Store Activity:
The Company maintains a high level of lease optionality with over 70% of corporately-managed stores having a lease event within the next three years. As of February 1, 2020, the Company operated 372 corporately-managed locations, including 316 in North America inclusive of 22 shop-in-shops within select Walmart locations, and 56 outside of North America. Through its third-party retail model, there were 60 stores in operation with relationships that included Carnival Cruise Line, Great Wolf Lodge Resorts, Landry’s and Beaches Family Resorts. The Company’s international franchisees ended the year with 92 stores in 12 countries.
Balance Sheet:
As of February 1, 2020, cash and cash equivalents totaled $26.7 million. The Company ended the fiscal year with no borrowings under its revolving credit facility.
Total inventory at year-end was $53.4 million, down 8.5% from fiscal 2018 year-end. For fiscal 2019, capital expenditures totaled $12.4 million and depreciation and amortization were $13.7 million.
As the Company previously noted, for comparison purposes, on February 3, 2019, it recorded lease liabilities of $176.2 million upon adoption of the new lease accounting standard, also referred to as ASC Topic 842, based on the present value of remaining lease payments. A corresponding right-to-use asset of $151.5 million was recorded on the balance sheet upon adoption which was net of accrued and prepaid rent, deferred lease incentives and impairment charges.
Fiscal Year 2020 Expectations:
The Company notes that it has had an increase in total revenues on a year-to-date basis in fiscal 2020 and had intended to share more detailed guidance that included ranges of expected growth in both revenue and pre-tax profit compared to fiscal 2019. However, given the rapidly changing environment with COVID-19, the Company is refraining from providing specific guidance and is evaluating a variety of scenario plans for the business going forward.
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 March 18, 2019. The telephone replay is available by calling (844) 512-2921. The access code is: 13698947.
Build-A-Bear is a global brand kids love and parents trust that seeks to add a little more heart to life. Build-A-Bear Workshop has over 500 stores worldwide where Guests can create customizable furry friends, including corporately-managed stores in the United States, Canada, China, Denmark, Ireland, Puerto Rico, and the United Kingdom, third party retail locations and franchise stores in Africa, Asia, Australia, Europe, Mexico, the Middle East and South America. Build-A-Bear Workshop, Inc. (NYSE: BBW) posted total revenue of $338.5 million in fiscal 2019. 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 (including our ability to amend our credit facility on a timely basis on terms acceptable to us or at all), 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 18, 2019 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.
Voin Todorovic
Investor Relations
Build-A-Bear Workshop
314.423.8000 x5221
Public Relations
PR@buildabear.com
SOURCE Build-A-Bear
Founded in St. Louis in 1997, Build-A-Bear, a global brand kids love and parents trust, seeks to add a little more heart to life.