2009 ANNUAL REPORT Sharing St
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making Build-A-Bear Workshop, Inc. smiles 1 954 Innerbelt Business Center Drive 2009 ANNUAL REPORT Sharing St. Louis, MO 63114 buildabear.com® buildabearville.com® smiles Every interaction with our beary special brand makes you smile. For kids, it’s the empowerment and creativity of making their own stuffed animal friend...from choosing it, making a wish on its heart and creating its personality with hundreds of outfits and accessories. And for moms, it’s knowing she can say YES and have fun too because it’s a good value. This experience connects families to their new furry friend and to our brand for life. And most importantly makes ts them...and us...smile. making hear Build-A-Bear Workshop® supports causes related to children, animals and the smile environment. And through our Huggable Heroes® program, we recognize young peoplepeop for extraordinary service. WELCOME Our beary fun and interactive stores have a theme-park in a mall like Talia, Founder & CEO of RandomKid environment with larger-than ™ life customized teddy bear fixtures and eight interactive bear-making stations. Company Profile Build-A-Bear Workshop, Inc. is the leading and only global company that offers an interactive make-your-own stuffed animal retail-entertainment experience. Founded in 1997, the company and its franchisees currently operate more than 400 stores worldwide, including company-owned stores in the United States, Puerto Rico, Canada, the United Kingdom, Ireland and France, and franchise stores in Europe, Asia, Australia, Africa and the Middle East. The company extends its in-store interactive experience online with its award winning virtual world at buildabearville.com.® Build-A-Bear Workshop (NYSE: BBW) posted total revenue of $394.4 million in fiscal 2009. The company was named to the 2010 & 2009 20082008 HUGGABLE HEROES HALL OF FAME FORTUNE 100 Best Companies to Work For® list. For more information, TalTaliaia founded a nonprofit organization that helps call 888.560.BEAR (2327) or visit buildabear.com.® kidkidss help others. She has worked with kids from 20 ccountries and raised over $10 million! MAXINE CLARKARK Founder, Chairman, and Chief Executive BearBear 031810_BAB09AR_RlsdWrap.indd 1 3/31/10 11:04:50 AM making Build-A-Bear Workshop, Inc. smiles 1 954 Innerbelt Business Center Drive 2009 ANNUAL REPORT Sharing St. Louis, MO 63114 buildabear.com® buildabearville.com® smiles Every interaction with our beary special brand makes you smile. For kids, it’s the empowerment and creativity of making their own stuffed animal friend...from choosing it, making a wish on its heart and creating its personality with hundreds of outfits and accessories. And for moms, it’s knowing she can say YES and have fun too because it’s a good value. This experience connects families to their new furry friend and to our brand for life. And most importantly makes ts them...and us...smile. making hear Build-A-Bear Workshop® supports causes related to children, animals and the smile environment. And through our Huggable Heroes® program, we recognize young peoplepeop for extraordinary service. WELCOME Our beary fun and interactive stores have a theme-park in a mall like Talia, Founder & CEO of RandomKid environment with larger-than ™ life customized teddy bear fixtures and eight interactive bear-making stations. Company Profile Build-A-Bear Workshop, Inc. is the leading and only global company that offers an interactive make-your-own stuffed animal retail-entertainment experience. Founded in 1997, the company and its franchisees currently operate more than 400 stores worldwide, including company-owned stores in the United States, Puerto Rico, Canada, the United Kingdom, Ireland and France, and franchise stores in Europe, Asia, Australia, Africa and the Middle East. The company extends its in-store interactive experience online with its award winning virtual world at buildabearville.com.® Build-A-Bear Workshop (NYSE: BBW) posted total revenue of $394.4 million in fiscal 2009. The company was named to the 2010 & 2009 20082008 HUGGABLE HEROES HALL OF FAME FORTUNE 100 Best Companies to Work For® list. For more information, TalTaliaia founded a nonprofit organization that helps call 888.560.BEAR (2327) or visit buildabear.com.® kidkidss help others. She has worked with kids from 20 ccountries and raised over $10 million! MAXINE CLARKARK Founder, Chairman, and Chief Executive BearBear 031810_BAB09AR_RlsdWrap.indd 1 3/31/10 11:04:50 AM BUILD-A-BEAR WORKSHOP, INC. LETTER TO SHAREHOLDERS financial highlights (dollars in thousands, except per share, per store, and per gross square foot data) Fiscal year (1) 2009 2008 2007 Revenues: Net retail sales . $ 388,552 $ 460,963 $ 468,168 Franchise fees . $ 3,353 $ 4,157 $ 3,577 Licensing revenue . $ 2,470 $ 2,741 $ 2,616 Total revenues . $ 394,375 $ 467,861 $ 474,361 Net income (loss) . $ (12,473) $ 4,564 $ 22,509 Earnings (loss) per common share: Basic . $ (0.66) $ 0.24 $ 1.11 Diluted . $ (0.66) $ 0.24 $ 1.10 (2) Other fi nancial and store data: Gross margin (dollars)(3) . $ 142,572 $ 190,500 $ 209,090 Gross margin (percent) (3) . 36.7% 41.3% 44.7% Number of company-owned stores at end of period . 345 346 321 Average net retail sales per store . $ 1,044 $ 1,329 $ 1,576 Net retail sales per gross square foot . $ 358 $ 445 $ 516 (1) Our fi scal year consists of 52 or 53 weeks; it ends on the Saturday nearest Dec. 31 in each year. Fiscal years 2009 and 2007 were 52 weeks each; fi scal year 2008 consisted of 53 weeks. (2) For descriptions of this fi nancial and store data, please see the fi scal 2009 annual report on Form 10-K. (3) Gross margin represents net retail sales less cost of merchandise sold, which includes store asset impairment charges in 2009 and 2008. Gross margin percentage represents gross margin divided by net retail sales. TOTAL REVENUE NUMBER OF COMPANY-OWNED STORES (dollars in millions) (at end of period) 500 350 346 345 474.4 467.9 321 437.1 394.4 271 361.8 200 250 175 05 06 07 08 09 05 06 07 08 09 1 ® stuff Me STiTCH Me fluff Me Shareholder Information e Build-A-Bear Workshop Form 10-K Build-A-Bear Workshop® World Bearquarters The Build-A-Bear Workshop® Form 10-K common stock is traded to 1954 Innerbelt Business Center Drive may be requested by a letter to the on the New York Stock M St. Louis, Mo. 63114-5760 Investor Relations department at the Exchange. Our symbol is BBW. 888.560.2327 World Bearquarters, by a phone call As of March 31, 2010, there were Reasons 314.423.8000 to the Investor Relations department approximately 10,500 shareholders. Fax: 314.423.8188 at 314.423.8000, or by an e-mail ENGAGINGE GUESTS That number is based on the actual Web: buildabear.com® to [email protected]. IInn 2009, we made significant advances in our number of holders of record and an eentertainment initiatives with our first-ever television Transfer Agent and Registrar Comprehensive fi nancial information for estimated number of benefi cial holders sspecial, “Holly and Hal Moose™: Our Uplifting Christmas BNY Mellon Shareowner Services Build-A-Bear Workshop is also available of the company’s common stock. Adventure,”A airing on ABC Family! Engaging kids in 480 Washington Boulevard, 27th Floor at the company’s investor relations our character stories is important to our success and Certifi cations provides a larger opportunity for growth. smile Jersey City, N.J. 07310-1900 Web site: http://ir.buildabear.com. The most recent certifi cations by 888.667.7679 hear hear ® Annual Meeting our chief executive offi cer and chief BEARY LIMITEDMITED EDITIONSEDITIONS FURBULOUSFURBULO FASHIONS POWERFUL PARTNERSHIPS www.bnymellon.com/shareowner/isd Seasonal limited-editionmited-edition ananimalsimals aandnd IIff a trend is big for kids, our bears are We are aligned with the most The annual meeting of shareholders fi nancial offi cer pursuant to Section outfits are veryery successful in driving wearing iit! From peace signs and pink powerful and relevant brands in Auditors will be held at 10:00 a.m. St. Louis time 302 of the Sarbanes-Oxley Act repeat business,ess, giftersgifters and collectors. ttoo accessaccessorizingo with Pawtracks Players fashion, entertainment and sports, KPMG LLP (CDT) on Thursday, May 13, 2010, of 2002 are fi led as exhibits to our In addition too these seasonal offerinofferings,gs, aandnd camcamerae phones, our outfits and which appeal to both boys and St. Louis, Mo. at the company’s World Bearquarters, Form 10-K. We have also fi led with we will introduceduce ververyy llimitedimited eeditiondition aaccessoriesccessori are authentic right down girls. We continue to partner with 1954 Innerbelt Business Center Drive, the New York Stock Exchange the “stories” buildinglding ddemandemand andand sense ttoo the bearybea smallest detail. pop culture icons like Hello Kitty® Counsel St. Louis, Missouri 63114. A formal notice most recent Annual CEO Certifi cation, of urgency throughouthroughout thethe yyearear at by Sanrio,® and successful movie Bryan Cave LLP ® of the meeting and a proxy statement as required by the New York non-holiday times. BUILD-A-BEARVILLEBUILD AB franchises like Star Wars™ and St. Louis, Mo. Our virtual worldw builds synergies Alvin and the Chipmunks.® will be sent to each shareholder as of Stock Exchange. betbetweenween ourour real world and online March 31, 2010. experiencexperiences,es provides monetization opportunitieopportunities and increases Guest engagemenengagement. The value of the transactions from animals brought to life onlineonline exceeded $64 million GIFTS STUFFED WITH HEART in 2009, and traffic and time spent We have personalized, huggable and a global commu n ity on the site continuesc to grow. unforgettable gifts for all occasions and we are capturing more everyday HUGS AROUND THE WORLD ENHANCING OUR EXPERIENCE gifting throughout the year.