Slide 1: ICR Conference 2023
ICR CONFERENCE 2023
Slide 2: Forward Looking and Cautionary Statements
FORWARD LOOKING AND CAUTIONARY STATEMENTS 2 This presentation 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 eve
Slide 3: Executive Summary
J F) EXECUTIVE SUMMARY
Slide 4: In 1997, we pioneered experiential retail for kids
In 1997, we pioneered experiential retail for kids 4 © 2023 Build-A-Bear Workshop, Inc. BUILD-A-BEAR WORKSHOP, INC. (NYSE: BBW) Today, we are a MULTI-CHANNEL, SITE-BASED EXPERIENCE and ENTERTAINMENT COMPANY with DIVERSIFIED CATEGORIES and CONSUMER SEGMENTS Started as a mall-based vertical kid’s reta
Slide 5: Most Profitable Year in Company History
MOST PROFITABLE YEAR in COMPANY HISTORY 2ND CONSECUTIVE YEAR of RECORD-BREAKING PROFITABILITY 8 CONSECUTIVE QUARTERS of YEAR-OVER-YEAR REVENUE GROWTH 5 *Based on Company’s current projections for fiscal 2022 © 2023 Build-A-Bear Workshop, Inc. BBW FY2022 EXPECTATIONS* FY2022 expected to deliver recor
Slide 6: BBW Snapshot: By the Numbers
25 YEARS OF EMOTIONAL CONNECTIONS 6 93% Brand Awareness* 20MM+ First Party Data Contacts, Social Media Followers & Loyalty Members ~225MM Furry Friends Sold Since Inception ~500 Experience Locations Worldwide with Multiple Business Models >160% Digital Demand Growth (since 2019)*** Skilled Associate
Slide 7: BBW Key Investor Considerations
BBW KEY INVESTOR CONSIDERATIONS BUSINESS STRENGTH AND MOMENTUM SUPPORTS PROVEN STRATEGIC INITIATIVES: Strong financial results with profitable, growing revenue, high margins, good free cash flow, clean debt-free balance sheet and seasoned executive team BRAND POWER PRESENTS MONETIZABLE OPPORTUNITIES
Slide 8: Brand Power
BRAND POWER
Slide 9: BBW Engages at Life Moments to Create Relationships
BBW ENGAGES AT LIFE MOMENTS TO CREATE RELATIONSHIPS 9 © 2023 Build-A-Bear Workshop, Inc. EXPERIENCE + EMOTION = BRAND POWER Empowerment Personalization Emotional Bonding Self Expression Engagement Story Telling Diverse reasons to visit create destination-driven traffic (planned in advance)
Slide 10: BBW Is Beloved
BBW IS BELOVED MULTIPLE OCCASIONS BALANCE BUSINESS SEASONALITY** Jan-Mar Jul-Sep Apr-Jun Oct-Dec First party data email contacts, social followers and loyalty members 20MM+ >60% of visits to experience locations are planned and the top occasion is a birthday Well-Known Multi-Generational Emotional T
Slide 11: BBW Has Diverse and Highly Coveted Consumers
BBW HAS DIVERSE AND HIGHLY COVETED CONSUMERS Build-A-Bear appeals to a broad demographic market with strong purchasing power and brand loyalty Wide interest across ages Educated with spending power: Professional careers, Appx 70% attended college Over 80% are homeowners Approximately 70% are married
Slide 12: Over 10 Billion Annual Media and PR Impressions
12 12 Annual media and PR impressions 2020, 2021, 2022 © 2023 Build-A-Bear Workshop, Inc. OVER 10 BILLION ANNUAL MEDIA AND PR IMPRESSIONS Build-A-Bear IS pop culture; iconic status drives media exposure. Our brand is regularly mentioned on popular TV shows, movies and in celebrity news
Slide 13: BBW Co-Brands with Leading Licenses
BBW CO-BRANDS WITH LEADING LICENSES License relationships with over 75 world-class collaborators from film, TV, art, games, sports and more support enthusiast, collectible, affinity and gifting businesses with appeal to expanded consumer demographics…yet BBW is a brand unto itself providing balanced
Slide 14: Proven Strategy & Dynamic Multi-Channel Business Model
PROVEN STRATEGY & DYNAMIC MULTI-CHANNEL BUSINESS MODEL
Slide 15: BBW Harnesses Brand Equity and Technology to Drive Growth
BBW HARNESSES BRAND EQUITY and TECHNOLOGY TO DRIVE GROWTH BBW operates a dynamic “circle of engagement” model designed to efficiently create multiple consumer touchpoints using our one-to-one experience locations, data capture and advanced digital analytics & communications capabilities to increase
Slide 16: BBW Has Competitive Dynamic Business Model
EXPERIENCE LOCATIONS PRODUCT DEVELOPMENT SOURCING PRODUCTION LOGISTICS CONSUMERS STRATEGIC BRAND INSIGHTS 16 MORE BUSINESS CONTROL: BBW uses proprietary data to design/develop concepts that are directly sourced, distributed, marketed, priced, and sold providing business flexibility. Stores also serv
Slide 17: Execution of 2022 Strategy Delivering Another Record Year
EXECUTION OF 2022 STRATEGY DELIVERING ANOTHER RECORD YEAR © Build-A-Bear Workshop, Inc. 17 © 2023 Build-A-Bear Workshop, Inc. DIGITAL CAPABILITIES TRANSFORMED CATEGORIES & CONSUMERS EXPANDED EXPERIENCE & BUSINESS MODELS DIVERSIFIED Disciplined and agile execution of strategic pillars which provide a
Slide 18: Experience Locations Build Brand and Support E-Commerce
EXPERIENCE LOCATIONS BUILD BRAND and SUPPORT E-COMMERCE Award winning concept enjoys >25% average contribution margin and ~100% of our “experience locations” were EBITDA positive and generate meaningful cash flow for the company Over 50 million guests enter a Workshop per year. The iconic hands-on e
Slide 19: Experience Locations Have Diverse Formats and Models
EXPERIENCE LOCATIONS HAVE DIVERSE FORMATS AND MODELS OPPORTUNITY FOR ADDITIONAL LOCATIONS - BBW is NOT overstored Opened over 20 new locations in 2022 including sites such as Six Flags Magic Mountain and the Pro Football Hall of Fame; additional expansion planned in 2023 and beyond Recently added fo
Slide 20: E-Commerce Growth Includes Expansion of Consumer Base
Rather than “digitizing” the BBW “physical” experience, BBW extended the reach and size of our market with diverse consumer segments including teens, adults, gift-givers, brand enthusiasts and collectors with new licensed relationships, experiences, and advanced digital marketing activities E-COMMER
Slide 21: Diverse Digital Experiences Appeal to Variety of Guests
DIVERSE DIGITAL EXPERIENCES APPEAL TO VARIETY OF GUESTS Buildabear.com offers various online shopping experiences and product options to meet the preferences of diverse consumer segments for multiple occasions and products Third-party marketplaces allow consumers to shop online at their preferred si
Slide 22: BBW Business Is Enhanced by Profitable E-Commerce Platform
BBW BUSINESS IS ENHANCED BY PROFITABLE E-COMMERCE PLATFORM Expanded digital marketing technology enables efficient targeting of broadened consumer segments to drive e-commerce demand E-commerce strong in both US and UK om Salesforce technology expanding loyalty and digital capabilities and efficienc
Slide 23: Business Strength and Momentum
BUSINESS STRENGTH AND MOMENTUM
Slide 24: 2021 Financial Snapshot
2021 FINANCIAL SNAPSHOT TOTAL REVENUES $411.5MM +61.2% OVER 2020 +21.6% OVER 2019 PRE-TAX INCOME +$70.9MM OVER 2020 +$49.1MM OVER 2019 HIGHEST IN COMPANY’S HISTORY CASH AND EQUIVALENTS $32.8MM* +$34.8MM 2020 +$26.7MM 2019 GROSS PROFIT MARGIN 53.0% +1,480 BPS VS 2020 +760 BPS VS 2019 THE MOST PROFITA
Slide 25: Continued Momentum in Fiscal 2022
CONTINUED MOMENTUM IN FISCAL 2022 TOTAL REVENUES $322.8MM VS $281.6MM IN 2021* VS $161.7MM IN 2020** PRE-TAX INCOME VS $30.6MM IN 2021* VS ($31.0MM) IN 2020** EBITDA $45.0MM $35.7MM 25 © 2023 Build-A-Bear Workshop, Inc. FIRST NINE MONTHS 2022 DELIVERED RECORD-SETTING TOTAL REVENUES AND PROFITABILITY
Slide 26: Current Management Led Successful Business Turnaround
CURRENT MANAGEMENT LED SUCCESSFUL BUSINESS TURNAROUND $384 $411.5 2012 2021 In millions TOTAL REVENUES 2021 highest level in over a decade EBITDA Over $85MM swing in profitability PROFITABLE STORES In North America LOCATION DIVERSIFICATION More than doubled non-traditional locations AVERAGE DOLLARS
Slide 27: Sustained Growth
SUSTAINED GROWTH (Excluding 2020 due to negative COVID impact) TOTAL REVENUES >12% growth, following best year in a decade PRETAX INCOME Double-digit profit margin 27 © 2023 Build-A-Bear Workshop, Inc. +12.4% In millions In millions +18.3% 12.3% of Ttl Rev 13.0% of Ttl Rev * * * 2022 annual and Q4 n
Slide 28: Experienced Management Drives Results with Focus on Future
EXPERIENCED MANAGEMENT DRIVES RESULTS WITH FOCUS ON FUTURE Sharon Price John President and Chief Executive Officer Former President of Stride Rite Children’s Group LLC, a division of Wolverine World Wide, Inc. Also: Hasbro, Inc., VTech Industries, Inc. and Mattel, Inc. Eric Fencl Chief Administrativ
Slide 29: Continued Focus on Shareholder Return
CONTINUED FOCUS ON SHAREHOLDER RETURN 29 © 2023 Build-A-Bear Workshop, Inc. * Share repurchase program in effect through August 31, 2025 Repurchased ~10% of our outstanding shares since Q3 2019 Declared $1.25 special dividend in Q4 2021 The Board authorized a new $50.0MM buyback program on August 31
Slide 30: BBW in Review
BBW IN REVIEW BUSINESS STRENGTH AND MOMENTUM SUPPORTS PROVEN STRATEGIC INITIATIVES BRAND POWER PRESENTS MONETIZABLE OPPORTUNITIES 30 © 2023 Build-A-Bear Workshop, Inc. PROVEN STRATEGY AND DYNAMIC BUSINESS MODEL DIVERSIFIES REVENUE BBW’S UNIQUE COMPETITIVE POSITION, GROWTH OPPORTUNITIES AND SIGNIFICA
Slide 31: Explanatory Note on Non-GAAP Financial Measures
Explanatory Note on Non-GAAP Financial Measures 31 © 2023 Build-A-Bear Workshop, Inc. Build-A-Bear Workshop (NYSE: BBW) reports its financial results in accordance with generally accepted accounting principles (GAAP). We have supplemented the reporting of our financial information determined in acco
Slide 32: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures: 32 © 2023 Build-A-Bear Workshop, Inc. $ in millions 1st NINE MONTHS FY22 FY22* Income before income taxes (pre-tax) $35.7 $60.0 Interest $0 $0 Depreciation & Amortization $9.3 $12.5 Earnings before interest, taxes, depreciation and amortization (EBITDA) $45.0 $72
Slide 33: Reconciliation of Non-GAAP Measures: Fiscal 2021 and 2020
Reconciliation of Non-GAAP Measures: First nine months and Fiscal 2021; First nine months and Fiscal 2020 33 © 2023 Build-A-Bear Workshop, Inc. $ in millions 1st NINE MONTHS FY21 FY21 Income before income taxes (pre-tax) $30.6 $50.7 Interest $0 $0 Depreciation & Amortization $9.1 $12.3 Earnings befo
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