Build-a-bear Workshop, Inc. · NYSE:BBW
Build-a-bear Workshop — Investor Presentation (December 2024)
28 slides from Build-a-bear Workshop's investor presentation, December 2024
Slide 1: Build-A-Bear Investor Overview
Build-A-Bear Investor Overview December 2024
Slide 2: Important Disclosures
Important Disclosures Forward-Looking Statements This presentation may contain “forward-looking statements” within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995. We generally identify these statements by words or phrases such as “may,” “mi
Slide 3: Build-A-Bear began as a pioneer of Experiential Retail
Build-A-Bear began as a pioneer of Experiential Retail Click to see how Build-A-Bear has become so much more 3
Slide 4: And is now a powerful brand
And is now a powerful brand WELL-KNOWN RESPECTED BELOVED >90% Aided Brand The #1 ~80-90m store and web Awareness* North American toy visits per year retailer** OUTSIZED BRAND EQUITY PART OF POP CULTURE One of the 20 most Iconic, ~30 billion annual influential retailers media impressions and in North
Slide 5: We have improved our financial results
We have improved our financial results 2023 Snapshot 2019-2023 Growth Total Revenue $486M 44% Net Retail Sales $456M 41% Third-Party Revenue* $30M 99% EBITDA** $79M 417% Margin 16.3% +1,180 bps Diluted EPS $3.65 NM*** FCF $46M 399% ROIC 37.5% NM*** Store Contribution Mgn**** > 25% + > 1,000 bps *Thi
Slide 6: By diversifying the business
By diversifying the business Beyond Kids Expanding To More Ages ~40% of sales now to Appealing to older consumers through pop culture, teens and adults* licensed relationships and our Bear Cave microsite Beyond Stores Expanding Online Web Demand** has grown ~140% Buildabear.com sells mostly to colle
Slide 7: And evolving our store footprint
And evolving our store footprint Partner Store Growth Store Count Mix 92 22% 14% 70 61 18% 58 56 68% 39 78% 2017 2023 - Corporately Managed Partner-Operated Franchised 2017 2018 2019 2020 2021 2022 2023 Partner-Operated Stores were launched domestically in 2018 and internationally in 2023 7
Slide 8: We have expanded both sides of our business model
We have expanded both sides of our business model Net Retail Sales Third-Party Revenue** (Direct-to-Consumer Segment*) (Commercial & Intl. Franchise Segments) +99% +41% $30.0 $456.4 $323.5 $15.1 $M $M 2019 2023 2019 2023 *Direct-to-Consumer (DTC) is sales by Company-managed retail stores, two e-comm
Slide 9: And we have entered a new era of profitability
And we have entered a new era of profitability Net Retail Pretax Income Third-Party Pretax Income (Direct-to-Consumer Segment) (Commercial & Intl. Franchise Segments) +$60M +102% $56.6 $9.7 $4.8 -$3.3 2019 2023 2019 2023 -1.0% 12.4% 32.1% 32.4% Margin Margin Margin Margin 9
Slide 10: Consistent returns position us for a new phase of growth
Consistent returns position us for a new phase of growth Free Cash Flow ROIC* 37.5% +75% +37% 35.9% 35.7% $46.0 $33.6 $19.2 $M 2021 2022 2023 2021 2022 2023 *Return on Invested Capital (ROIC) is a Non-GAAP financial measure, see “Important Disclosures.” 10
Slide 11: We have multiple levers to grow the business
We have multiple levers to grow the business Domestic Store International Store New Category Web Growth/ Wholesale Growth Growth Introductions Gifting Sales Growth All Driven By Our Circle of Engagement Content Increased Consumer Base Consumer Growth Connection More Loyalty Purchase Programs Occasio
Slide 12: And we have restarted new store unit growth
And we have restarted new store unit growth Total Experience Locations (includes Corporate, Partner and Franchised stores) A teddy bear hug is understood in every language. 600 590 20% 550 15% 522 525 We are expanding 12% 500 481 479 488 10% domestically & 8% internationally in three 450 5% models a
Slide 13: We generate revenue from product sales at retail, at wholesale, and from royalties
We generate revenue from product sales at retail, at wholesale, and from royalties International Retail Commercial Franchising DTC Wholesale sales Sales-based royalty (Corporate stores and websites (includes US & Intl. revenue, development fees, Fiscal 2023 in US, UK, CN) partner-operated stores) an
Slide 14: At retail, multiple store models produce top tier unit economics
At retail, multiple store models produce top tier unit economics Class of 2019 Corporate Store Returns Class of 2019 reached Discovery Concourse/SIS maturity in 2023 Store Model* Store Model* Avg. Corp Store Unit Vol. $1,457K $621K 4-Wall EBITDA** $382K $155K 4-Wall EBITDA margin 26% 25% Avg. Net In
Slide 15: Commercial is our fastest growing segment
Commercial is our fastest growing segment Partner-Operated Stores Commercial Revenue +18% +79% CAGR CAGR 92 $25.4 70 $18.5 61 56 $11.5 $4.4 Launched $M international 2020 2021 2022 2023 Partner- 2020 2021 2022 2023 Operated Stores Commercial revenue is primarily wholesale sales, including to partner
Slide 16: International Franchise is also growing
International Franchise is also growing Intl. Franchise Stores Intl. Franchise Revenue +39% CAGR $4.5 74 72 $3.2 71 $2.3 $1.7 68 $M 2020 2021 2022 2023 2020 2021 2022 2023 Intl. Franchise revenue includes sales-based royalties, development fees, and merchandise sales 16
Slide 17: Systemwide Sales growth exceeds revenue growth
Systemwide Sales growth exceeds revenue growth Revenue Systemwide Sales* +9.5% +10.4% CAGR CAGR $535.0 $508.5 $486.1 $467.9 $440.0 $411.5 $371.4 $338.5 $255.3 $272.5 $M $M 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Systemwide Sales exceed revenue because it includes BAB product sales at all s
Slide 18: While growing, we are returning capital to shareholders
While growing, we are returning capital to shareholders $123M/$7.71* per share Returned to Shareholders $50.0 The Company paid an initial quarterly cash dividend $45.0 $46.0 of $0.20 per share in April 2024, with additional quarterly cash dividends paid in July 2024 and October 2024. $40.0 $35.0 $33
Slide 19: Our opportunity to sell more products to more people in more places
Our opportunity to sell more products to more people in more places is a testament to the power of the brand The specialty toy company that helped define experiential retail in the late ’90s has not only survived but thrived. From inspiring viral moments, generating products that leverage pop cultur
Slide 20: Financial Review
Financial Review
Slide 21: Fiscal 2023 was the most profitable year in Build-A-Bear history
Fiscal 2023 was the most profitable year in Build-A-Bear history Revenue $486.1M, +3.9% Pretax Income $66.3M, +7.1% Net New Unit Growth* 37 units Gross Profit Margin 54.4%, + 190 BPS EBITDA $79.1M, 16.3% margin YE Cash $44.3M Free Cash Flow $46.0M Cash Returned $42.6M 2023 was our third consecutive
Slide 22: Q3 2024 was our most profitable third quarter
Q3 2024 was our most profitable third quarter Revenue $119.4M, +11.0% Pretax Income $13.1M, +26.4% Net New Unit Growth* 17 units Gross Profit Margin 54.1%, + 140 BPS EBITDA $16.7M, 14.0% margin Quarter-end Cash $29.0M 9MO Free Cash Flow $18.0M 9MO Cash Returned $31.5M *Net New Unit Growth includes C
Slide 23: Fiscal 2024 Guidance calls for net new unit growth acceleration
Fiscal 2024 Guidance calls for net new unit growth acceleration Revenue $489M-$495M Pretax Income $65M-$67M Net New Unit Growth* At least 65 units Capital Expenditures $18M-$20M Depreciation & Amortization $15M-$16M Tax Rate ≈24.5% Fiscal 2024 Guidance vs. Fiscal 2023 on a 52-week basis** Revenue at
Slide 24: BBW Key Statistics
BBW Key Statistics Share Price - Nov. 29 $37.99 Shares Out. 3Q-end 13.4M Market Capitalization $511M Cash 3Q-end 29.0M Qtly. Dividend/Yield $0.20/2.1% Float (est.) 92.5% Avg. Daily Vol. (3 mos.) 273,000 Source: BAB, NYSE Connect 24
Slide 25: Appendix
Appendix
Slide 26: Build-A-Bear Non-GAAP Reconciliations
Build-A-Bear Non-GAAP Reconciliations Systemwide Sales, Free Cash Flow, EBITDA Fiscal Year-End ($ millions) 2019 2020 2021 2022 2023 Fiscal Year-End ($ millions) 2021 2022 2023 Systemwide Sales: Calculation of Free cash flow Net retail sales 323.5 249.2 397.7 446.2 456.2 Net cash provided by operati
Slide 27: Build-A-Bear Non-GAAP Reconciliations
Build-A-Bear Non-GAAP Reconciliations Return on invested capital, Segment ROIC Fiscal Year-End ($ millions) 2021 2022 2023 Fiscal Year-End ($ millions) 2023 Fiscal Year-End ($ millions) 2023 Calculation of Return on Invested Capital Calculation of Return on Invested Capital Calculation of Return on
Slide 28: Contact Information
Contact Information Gary Kim Schnierow Utlaut VP, Investor Relations SVP, & Corporate Finance Chief Brand Officer GaryS@buildabear.com KimU@buildabear.com 28
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