Slide 1: Build-A-Bear Workshop October 2020 Investor Update
Build-A-Bear Workshop October 2020 - Investor Update
Slide 2: Forward Looking and Cautionary Statements
Forward Looking and Cautionary Statements ‘This presentation contains certain statements that are, or may be considered to be, “forward-locking statements" forthe purpose of federal securities laus, including, but not limited to, statements that reflect our current views with respect to future event
Slide 3: Experienced Team, Powerful Brand, Sound Strategy
EXPERIENCED TEAM. Flexible, responsive and disciplined management team and organization POWERFUL BRAND ) Build-A-Bear has multi-generational consumer connections and monetizable brand equity SOUND STRATEGY Focused on driving profitable growth and leveraging brand equity to diversify revenue streams
Slide 4: Almost 25 Years in the Making
Almost 25 Years in the Making 20; LISTED te , "Rest! # NYSE 2004 Make-Your-Own Stuffed os Animal Mall Retailer 60 92 200 MM Furry Friends Sold Corporately- Third-party _ International Managed Stores Retail Locations Franchise Stores Known, emotional and leverageable brand equity 3,500+ Associates |
Slide 5: A Powerful Brand
A Powerful Brand 90% + Build-A-Bear is a brand that has (0) consumer | 2US7) and LOVE and over 80% of kids say BAB is “fun to visit” Source: C&R Research 2017 Aided Brand Awareness US Moms of Kids ages 2-12 With Broad Demographic Appeal... 1/3 Male ‘Age range Oto2 3to5 6tos 9to12 Teen+ ..and a Loyal
Slide 6: A Sound Strategy
A Sound Strategy Leverage Diversify and expand the retail Monetize the power footprint globally of the brand $ Investment The strategy is based on: 1. OPTIMIZING a key skill set of EXPERIENTIAL RETAIL OPERATIONS (to include e-commerce) and PLUSH DESIGN, DEVELOPMENT AND SOURCING, while 2. LEVERAGING
Slide 7: 2019 and Early 2020 Momentum
2019 and Early 2020 Momentum Coming off of a strong 4" quarter that saw Total Revenues grow by 3% including 2.1% in Net Retail Sales and 46.2% in Commercial Revenue, BBW was positioned with momentum leading into FY2020 after delivering profitable growth in FY 2019 4% FY 2018 $338. 5MM MM vs 2s of FY
Slide 8: Focused and Fast Response to COVID
Focused and Fast Response to COVID Furloughed over 90% of Forced to temporarily workforce; Focused aegis von E all corporately- Salaries temporarily Diesen es and managed stores reduced for all others reducing EXPENSES Pivoted to manage Triple-Dig | aw Oa increase in e-commerce demand Shifted to UAL
Slide 9: 2020 COVID Impact in the First Half of the Fiscal Year
2020 COVID Impact in the First Half of the Fiscal Year The temporary closure of all corporately-managed retail stores had significant negative impact on results in the first half of FY 2020. 25.3 MM tide vs end of Hi 2019 ‘Actual H1 2020 ‘Actual H1 2019 vs Prior Year Total Revenues $87.0 $163.6 ($76
Slide 10: Q3 2020 Revenue Expectations
Q3 2020 Revenue Expectations North America Europe Projected Actual vs Prior Year* 9320200 3.2019 t t-t 5 > TotalRevenue -$72.0-$74.0 $70.4 $2.6 E-comm Brick& Net Reta E-comm Brick& Net Reta Mortar Sales Mortar Sales NetRetail Sales $70.5-$72.0 $66.6 a7 es es OtherRevenue 4.5.9.0 $38 ($2.2) + + a ‘Co
Slide 11: Q3 2020 Profitability Expectations
Q3 2020 Profitability Expectations A meaningful EBITimprovementis expected compared to the 2019 fiscal third quarter EBIT loss of $7.7 million; Q3 2020 EBIT expected to be in the range of break-even to $1.5M loss Q3 2020 Revenue by Segment Expectations ns) Projected Q3 2020 Actual Q3 2019 Total Reve
Slide 12: Regaining Momentum in Q3 2020
Regaining Momentum in Q3 2020 Expect to finish Q3 (historically the smallest and least profitable) with improvementin top- and bottom-line results, with higher cash position and lower inventory. +500 bps vs FY 2019 $13.8MM vs end of Q3 2019 | Projected Q3 2020 Actual Q3 2019 vs Prior Year* Total Rev
Slide 13: Focused and Fast Acceleration of Key Initiatives
Focused and Fast Acceleration of Key Initiatives After initially focusing on responding to and managing the immediate challenges brought by COVID, a rapid shift was made to leverage the circumstances to accelerate our strategic initiatives for long-term benefit. Resources have focused in 3 primary a
Slide 14: Acceleration of Digital Transformation
ACCELERATION OF DIGITAL TRANSFORMATION We are focused on rapi proved and enhanced fulfillment capabi platforms to inform and di : vs prior year consecutiv leveraging store locations to supplement e- commerce fulfillment through buy on: p from store and buy on-line, pick u store lly growing e-commerc
Slide 15: Rapid Evolution of Retail Stores
RAPID EVOLUTION OF RETAIL STORES We are monitoring the retail landscape regarding consumer traffic and business rebound while maintaining a post-COVID profitable store base; will continue to prioritize the third party retail model While the environment remains volatile, we returned to retail growth
Slide 16: Disciplined Focus on Financial Stability
DISCIPLINED FOCUS ON FINANCIAL STABILITY We are maintaining a solid financial position with the liquidity needed to support our business including assertive cash management and meaningful cost reductions Immediate action was taken to preserve cash and reduce costs Cash and Equivalents >$20.0MM Proje
Slide 17: Commercial and International Revenue, Franchising
COMMERCIAL a INTERNATIONAL REVENUE y FRANCHISING rts revenue based on whole: 1g minimal capital and reducing operational ri ntly and strategically expanding our retail footprint. ures have negatively impacted revenue in t! BBW has a franchise model that can be leveraged for iternational development,
Slide 18: The Future: Integrated Brand Value Creation
The Future: Integrated Brand Value Creation Channel and category-agnostic retail transactions Over 20 outbound licenses and categories i ie ‘f° stable SOREL
Slide 19: Why BBW? Emerging Stronger!
Why BBW? EMERGING STRONGER! Investment in digital platforms and capabilities is delivering consistent and escalating e- commerce growth + 12 consecutive quarter of double-digit (or greater) e-commerce growth since platform upgrade* We have a proven experiential retail concept diverse optionality tha
Slide 20: Buildabear.com
Buildabear.com #celeBEARate
Slide 21: Explanatory Note on Non-GAAP Financial Measures
Explanatory Note on Non-GAAP Financial Measures The Company reports it financial results in accordance with generally accepted accounting principles (GAAP). We have supplemented the reporting of our financial information determined in accordance with GAAP with certain non-GAAP financial measures. Th
Slide 22: Reconciliation of Non-GAAP Measures: Q3 2020 Expectations
Reconciliation of Non-GAAP Measures: Q3 2020 Expectations and Q3 2019 Actuals ($in millions) | Projected Q3 2020 | 032019 Loss before income taxes (pre-tax) ($1.5)-$0.0 ($7.7) Interest so so Earnings before interest and taxes ($1.5)-$0.0 ($7.7) (EBIT) Depreciation & Amortization $3.5 $3.6 Earnings b
Slide 23: Reconciliation of Non-GAAP Measure: First Half EBIT
Reconciliation of Non-GAAP Measure First Half 2020 and 2019 Results EBIT ($ in millions) | Actual H1 2020 | ActualH1 2019 Loss before income taxes (pre-tax) ($32.6) $1.7 Interest $0 $0 Earnings before interest and taxes (EBIT) ($32.6) $1.7 COVID-19 activity $0.1 $0 Impairmentand other charges 2) $8.
Slide 24: Reconciliation of Non-GAAP Measures: First Half EBITDA
Reconciliation of Non-GAAP Measures: First Half 2020 and 2019 Results EBITDA ($ in millions) | Actual H1 2020 | Actual H1 2019 Loss before income taxes (pre-tax) ($32.6) $1.7 Interest $0 $0 Depreciation & Amortization $6.7 $8.1 Earnings before interest, taxes, ($25.9) $9.8 depreciation and amortizat
Slide 25: Reconciliation of Non-GAAP Measures: 2019 and 2018 EBIT
Reconciliation of Non-GAAP Measures: 2019 and 2018 EBIT Income (loss) before income taxes (pre-tax) $1.6 ($18.5) Interestincome (loss) $0 $0 Earnings before interest and taxes (EBIT) $1.6 ($18.5) Asset impairment/Lease modification ($1.0) $9.1 Foreign exchange losses 2) $0 $1.0 Other ©) $0.4 $0.7 Ad
Slide 26: Reconciliation of Non-GAAP Measures: 2019 and 2018 EBITDA
Reconciliation of Non-GAAP Measures: 2019 and 2018 EBITDA ($ in millions) Income (loss) before income taxes (pre-tax) $1.6 ($18.5) Interestincome (loss) $0 $0 Depreciation & Amortization $13.7 $16.0 Earnings before interest, taxes, depreciation and $15.3 ($2.5) amortization (EBITDA) | Asset impairme