ST. LOUIS - (BUSINESS WIRE) - Mar. 10, 2021 - Build-A-Bear Workshop, Inc. (NYSE: BBW) today reported results for the fourth quarter and fiscal year 2020 ended January 30, 2021. The Company noted that the actions that were taken to respond to the COVID-19 pandemic combined with the disciplined execution of its stated strategy, inclusive of the acceleration of its digital transformation initiatives, led to growth in pre-tax income for the fiscal 2020 fourth quarter as compared to the fiscal 2019 fourth quarter.
The Company’s total revenues also exceeded guidance, although still representing a decline compared to the prior year, largely driven by ongoing negative impact of the pandemic on its retail store operations as well as commercial and international franchising revenue. The negative impact in corporately-managed stores included a significant decline in traffic with an 18% reduction in store operating days driven by the forced closure of all of the Company’s locations in Europe for two-thirds of the quarter and a reduction of approximately 25% in operating hours in North America as compared to the fourth quarter of fiscal 2019.
Sharon Price John, Build-A-Bear Workshop President and Chief Executive Officer commented, “During a year with great global disruption, I am proud of our organization’s ability to rapidly respond and make the changes needed to deliver $9.2 million in pre-tax profit in the fourth quarter, an increase of over 20% compared to the prior year and exceeding previously issued guidance, as well as a stronger year-end cash position. Although there were challenges, we were able to accelerate important long-term strategic initiatives including moving forward with our digital transformation and rapidly evolving our retail model and capabilities while simultaneously managing our financial stability and liquidity.
“As we begin fiscal 2021, our operations continue to be negatively impacted by the pandemic with persistent temporary store closures affecting direct-to-consumer as well as commercial and international franchising revenue while e-commerce demand continues to be very strong across geographies fueled by Valentine’s product performance and the initial response to our Easter assortment. As we look forward, we are excited to announce plans to launch a product collection based on the highly popular Nintendo Switch game, Animal Crossing™: New Horizons, later this quarter. Separately, as announced yesterday, through our agreement with Sony Picture Worldwide Acquisitions, we anticipate a fall release of Honey Girls, a live-action film inspired by one of our popular proprietary intellectual properties and product lines. We remain focused on the advancement of our key strategies with the goal to deliver profitable growth as the macro-environment stabilizes,” concluded Ms. John continued.
Fourth Quarter 2020 Highlights (13 weeks ended January 30, 2021 compared to the 13 weeks ended February 1, 2020):
Fiscal Year 2020 Highlights (52 weeks ended January 30, 2021 compared to the 52 weeks ended February 1, 2020):
Store Activity:
As of January 30, 2021, the Company had 354 corporately-managed stores with select locations continuing to be temporarily closed by government mandated restrictions. While the Company’s response to the pandemic included renegotiating over 90% of its corporately-managed store leases in fiscal 2020, it maintains a high level of lease optionality with over 75% of locations 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 for a portion of the 2020 fiscal year.
Balance Sheet:
As of January 31, 2021, total cash totaled $34.8 million, a 30% increase over the prior year-end. The Company ended the fiscal year with no borrowings under its revolving credit facility.
Total inventory at year-end was $46.9 million, down 12.1% from fiscal 2019 year-end. For fiscal 2020, capital expenditures totaled $5.0 million and depreciation and amortization were $13.2 million.
Fiscal Year 2021 Expectations:
For fiscal 2021, the Company currently expects EBITDA to be higher than fiscal 2019 EBITDA of $15.3 million. The Company also expects to achieve EBITDA in the range of $20-$30 million by fiscal 2023. This outlook assumes the reopening of the Company’s European locations by the end of the first quarter and no additional significant closures due to government mandates in fiscal 2021 as well as a more stable economic and retail environment in fiscal 2022 and beyond.
In addition, for fiscal 2021, the Company currently expects capital expenditures to approximate $5 - $10 million and for depreciation and amortization to be in the range of $13 - $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. 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 17, 2021.
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.
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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.