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Build-A-Bear Investor Overview May 2025
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2 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,” “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 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. Forward-looking statements are not guarantees of future results and are subject to risks and uncertainties, including without limitation, those identified in our annual report on Form 10-K and our Quarterly Reports on Form 10-Q, under the sections titled “Risk Factors,” “Cautionary Note Regarding Forward-Looking Statements,” and “Management’s Discussion and Analysis of Financial Conditions and Results of Operations.” All our forward-looking statements are as of the date of this presentation only. In each case, actual results may differ materially from such forward-looking information. 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. Note Regarding Non-GAAP Measures In this presentation, the Company’s financial results are provided both in accordance with generally accepted accounting principles (GAAP) and using certain non-GAAP financial measures, including, but not limited to EBITDA, Systemwide Sales, Store Contribution Margin, Return on Invested Capital and Free Cash Flow. 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. Definitions of Non-GAAP Financial Measures Systemwide sales include sales at all Build-A-Bear stores and websites, whether operated by the Company, by partners, or by franchisees. While partner sales and franchisee sales are not recorded as revenues by the Company, management believes the information is important in understanding the Company’s financial performance, including total sales to end customers. Third-party retail sales are either reported to us by our partners or, where that is unavailable, estimated based on our wholesale sales, grossed up to our MSRP, and are not our revenues. Franchised store retail sales are reported to us by our franchisees and are not our revenues. Less than 5% of our Systemwide Sales are estimated based on our MSRP. The Company’s revenues consist of Direct to Consumer (Net retail sales) --sales by Company-managed retail stores, two e-commerce sites; Commercial--transactions with other businesses, mainly comprised of wholesale product sales and licensing our intellectual property, including entertainment properties, for third-party use; and International franchising— royalties as well as product, fixture sales and supplies from other international operations under franchise agreements. Changes in Systemwide sales are primarily driven by comparable sales and net new unit growth. Web Demand represents sales through all Build-A-Bear websites, whether fulfilled through our warehouse or stores. E-commerce is Web Demand fulfilled through our warehouse. Free Cash Flow represents Build-A-Bear’s net cash flows from operating activities, less capital expenditures. Return on Invested Capital (ROIC) is defined as net operating profit after tax divided by invested capital, with net operating profit calculated as earnings before interest and taxes (EBIT), and invested capital calculated as net working capital, less excess cash, plus operating leases, net property, plant, and equipment (PP&E), and other assets. © Build-A-Bear Workshop, Inc. 2025
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3 Build-A-Bear began as a pioneer of Experiential Retail Click to see how Build-A-Bear has become so much more
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4 And is now a powerful brand WELL-KNOWN >90% Aided Brand Awareness* A DESTINATION ~80% of store visits are planned* BELOVED ~100m store and web visits per year*** MULTI-GENERATIONAL 25+ year-old brand PART OF POP CULTURE Iconic, ~30 billion annual media impressions and PR impressions OUTSIZED BRAND EQUITY One of the 20 most influential retailers in North America** *Source: Proprietary research, LEK Consulting, 2022 survey with U.S. consumers; **Source: WPP BAV “The World’s Most Influential Retailers – 2024;”***Includes estimated traffic for third-party stores TRUSTED Over 20 million loyalty members and first-party data contacts RESPECTED The #1 North American toy retailer**
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5 We have improved our financial results *Third-Party references combine our Commercial + International Franchise segments.. **EBITDA is a Non-GAAP financial measure, see “Important Disclosures.” ***NM=not meaningful. 2019 Net Income was $261,000, and EPS was $0.02. ****Store Contribution margin is store-level EBIT margin for all corporate stores, and is a Non-GAAP financial measure, see “Important Disclosures.” Guests create lifetime memories by making their own stuffed animal at our experiential retail locations 2024 Snapshot 2019-2024 Growth Total Revenue $496M 47% Net Retail Sales $460M 42% Third-Party Revenue* $36M 140% EBITDA** $81M 430% Margin 16.3% +1,180 bps Diluted EPS $3.80 NM*** FCF $28M 199% ROIC 33.0% NM*** Store Contribution Mgn**** 25% + > 1,000 bps
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6 By diversifying the business Beyond Kids ~40% of sales to teens and adults* *Source: Proprietary research, LEK Consulting, 2022 survey with consumers. **Web Demand represents sales through all Build-A-Bear websites, whether fulfilled through our warehouse or stores, and is a Non-GAAP financial measure, see “Important Disclosures.” Expanding Online Buildabear.com sells mostly to collectors and gift givers that are teens and adults Expanding To More Formats Now includes tourist locations, concourse shops, shop- in-shops, ATMs, and wholesale Beyond Stores Web Demand** has grown ~110% from 2019-2024 Beyond Malls 369 corporate stores and 235 third-party stores in multiple formats in 30 countries at Q1 2025 Expanding To More Reasons Mother’s Day, Graduation, Congratulations, New Baby, Get Well, Thank You Beyond Birthdays Birthdays are ~30% of sales, and top holidays are Christmas, Valentine’s Day, and Easter Expanding To More Ages Appealing to older consumers through pop culture, licensed relationships and our Bear Cave microsite
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7 And evolving our store footprint 2017 2024 Corporately Managed FranchisedPartner-Operated Store Count Mix Partner-Operated Stores were launched domestically in 2018, and internationally in 2023 Partner Store Growth 39 58 56 61 70 92 138 2017 2018 2019 2020 2021 2022 2023 2024 62% 23% 14% 78% 22%
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8 We have expanded both sides of our business model Net Retail Sales (Direct-to-Consumer Segment*) Third-Party Revenue** (Commercial & Intl. Franchise Segments) +42% +139% $M $M *Direct-to-Consumer (DTC) is sales by Company-managed retail stores and two e-commerce sites; it is defined in “Important Disclosures.” **Third-Party references combine our Commercial + International Franchise segments.. $323.5 $460.0 2019 2024 $15.1 $36.0 2019 2024
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9 And we have entered a new era of profitability Net Retail Pretax Income (Direct-to-Consumer Segment) Third-Party Pretax Income (Commercial & Intl. Franchise Segments) -1.0% Margin 10.9% Margin 32.1% Margin 46.5% Margin +$12M+$54M $M $M($3.3) $50.4 2019 2024 $4.8 $16.8 2019 2024 Third-Party Pretax Income reached 25% of total Pretax Income in 2024
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10 Consistent returns position us for a new phase of growth Free Cash Flow* *Free Cash Flow and Return on Invested Capital (ROIC) are non-GAAP financial measures; see “Important Disclosures.” ROIC* $M $19.2 $33.6 $46.0 $27.6 2021 2022 2023 2024 35.9% 35.7% 37.5% 33.0% 2021 2022 2023 2024 2023 was a 53-week year; 2024 reflects a temporary drag from working capital timing dynamics. +44%
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11 We have multiple levers to grow the business Domestic Store Growth International Store Growth Wholesale Sales Growth Web Growth/ Gifting All Driven By Our Circle of Engagement Content Consumer Base Growth Loyalty Programs More Purchase Occasions Increased Consumer Connection New Category Introductions
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12 And we have restarted new store unit growth Total Experience Locations (includes Corporate, Partner and Franchised stores) *Based on 2025 Net New Unit Growth guidance of at least 50 locations, which includes Corporate, Partner, and Franchised Stores. We are expanding domestically & internationally in three models and through our multiple store formats A teddy bear hug is understood in every language. 522 481 479 488 525 589 639 2019 2020 2021 2022 2023 2024 2025e
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13 We generate revenue from product sales at retail, at wholesale, and from royalties Retail Commercial International Franchising DTC (Corporate stores and websites in US, UK, CN) Wholesale sales (includes US & Intl. partner-operated stores) Sales-based royalty revenue, development fees, and merchandise sales *% of Co. Pretax Profit doesn’t add to 100% due to rounding. ** Return on Invested Capital (ROIC) is a non-GAAP financial measure; see “Important Disclosures.” Fiscal 2024 Store Count % of Co. Pretax Profit* Revenue Pretax Margin ROIC** 368 75% $460M 10.9% 28% 138 23% $31M 50.2% 106% 83 2% $5M 21.6% 41%
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14 At retail, multiple store models produce top tier unit economics *Discovery Stores are generally 1,800-2,200 square feet and Concourse/SIS are generally 200+ sq feet. The results are for stores open a full year in 2024. **EBITDA is a Non-GAAP financial measure, see “Important Disclosures.” Corporate Store Returns We opened a net 9 new corporate stores in fiscal 2024 2024 Results for store classes Discovery Concourse/SIS of 2019, 2020, and 2021 Store Model* Store Model* Avg. Corp Store Unit Vol. $1,578K $615K 4-Wall EBITDA** $535K $152K 4-Wall EBITDA margin 34% 25% Avg. Net Investment $272K $42K Cash-on-Cash Return 196% 363%
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15 Commercial is our fastest growing segment Partner-Operated Stores Commercial Revenue $M Commercial revenue is primarily wholesale sales, including sales to partner-operated stores Launched international Partner- Operated Stores $4.4 $11.5 $18.5 $25.4 $31.4 2020 2021 2022 2023 2024 56 61 70 92 138 2020 2021 2022 2023 2024 +63% CAGR +25% CAGR
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16 International Franchise is also growing Intl. Franchise Stores Intl. Franchise Revenue $M Intl. Franchise revenue includes sales-based royalties, development fees, and merchandise sales $1.7 $2.3 $3.2 $4.5 $4.7 2020 2021 2022 2023 2024 71 72 68 74 83 2020 2021 2022 2023 2024 +29% CAGR
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17 Systemwide Sales exceed revenue Systemwide Sales*Revenue $M +$10M *Systemwide Sales is a Non-GAAP financial measure, see “Important Disclosures.” $M Systemwide Sales exceed revenue because it includes BAB product sales at all stores, whether operated by the Company, partners, or franchisees $338.5 $255.3 $411.5 $467.9 $486.1 $496.4 2019 2020 2021 2022 2023 2024 $371.4 $272.5 $440.0 $508.5 $535.0 $548.1 2019 2020 2021 2022 2023 2024 +$13M
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18 While growing, we are returning capital to shareholders The Company paid special dividends in December 2021 and April 2023, and in April 2024, it paid an initial quarterly cash dividend of $0.20 per share. In March 2025, the Company increased its quarterly cash dividend by 10% to $0.22. $133M ($9.14/share*) Returned to Shareholders 2021-2024 *Per share using average shares over the time period of 14.6M Dividends Share Repurchase Free Cash Flow $M Our asset-light shift allows a greater ability to return FCF to shareholders $19.9 $0.3 $22.1 $11.0 $4.4 $24.2 $20.5 $31.0 2021 2022 2023 2024 $19.2 $33.6 $46.0 $27.6
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19 Our opportunity to sell more products to more people in more places is a testament to the power of the brand Build-A-Bear Workshop has been one of the most recognizable and beloved toy brands in the world since opening in 1997.*** *https://www.marketingdive.com/news/build-a-bear-business-empire-transformation/699425/ **https://toybook.com/build-a-bear-documentary-streaming-news/ ***Celebrating the Holidays With Build-A-Bear Workshop (cheddar.com) World-Class Licenses …the brand has remained relevant for almost three decades— from the fall of the shopping mall to the rise of e-commerce.** World-Class Relationships 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 culture IP and building a variety of store formats, everyone’s favorite cuddly retailer may be developing an empire.*
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Financial Review
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21 Fiscal 2024 was the most profitable year in Build-A-Bear history 2024 was our fourth consecutive year of record growth and profits *Fiscal 2023 was a 13-week year; the revenue and pretax growth rates exclude the extra week of operations in 2023. **Net New Unit Growth includes Corporate, Partner-Operated, and International Franchise stores. ***Adj. EPS excludes discrete items for both 2023 and 2024. Revenue $496.4M, +3.6%* Pretax Income $67.1M, +5.1%* Net New Unit Growth** 64 units Gross Profit Margin 54.9%, + 50 BPS EBITDA $81.1M, 16.3% margin Adj. EPS $3.77, +10.2%*** YE Cash $27.8M Free Cash Flow $27.6M Cash Returned $42.0M
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22 Q1 2025 was our most profitable first quarter *Net New Unit Growth includes Corporate, Partner-Operated, and International Franchise stores. Revenue $128.4M, +11.9% Pretax Income $19.6M, +30.6% Net New Unit Growth* 15 units Gross Profit Margin 56.8%, + 260 BPS EBITDA $23.1M, 18.0% margin EPS $1.17, +42.7% Quarter-end Cash $44.3M Dividend $2.9M Stock Repurchased $4.2M
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23 Fiscal 2025 Guidance calls for continued top-line growth* *Guidance as of May 29, 2025 **MSD = mid-single-digit ***Net New Unit Growth includes Corporate, Partner, and Franchised Stores ****Excludes discrete items Pretax income includes the impact of less than $15 million in additional cost in fiscal 2025, primarily driven by our current estimated net tariff impact and associated costs, as well as increased medical and labor costs. Revenue** MSD growth Pretax Income $61M-$67M Net New Unit Growth*** At least 50 units Capital Expenditures $20M-$25M Depreciation & Amortization ≈$16M Tax Rate**** 22% - 24%
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24 BBW Key Statistics Source: BAB, NYSE Connect Share Price - May 23 $40.89 Shares Out. 1Q-end 13.15M Market Capitalization $538M Cash 1Q-end 44.3M Qtly. Dividend/Yield $0.22/2.2% Float (est.) 96.0% Avg. Daily Vol. (3 mos.) 290,000
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Appendix
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26 Build-A-Bear Non-GAAP Reconciliations Systemwide Sales, Free Cash Flow, EBITDA Fiscal Year-End ($ millions) 2022 2023 2024 Calculation of Free cash flow Net cash provided by operating activities 47.3$ 64.3$ 46.9$ Net cash used in investing activities (13.6) (18.3) (19.3) Free cash flow 33.6$ 46.0$ 27.6$ Discovery Store Model Clasess of 2019, 2020, and 2021 ($ millions) 2024 Concourse/SIS Store Model Classes of 2019, 2020, and 2021 ($ millions) 2024 Calculation of EBITDA Calculation of EBITDA Income before income taxes 0.495$ Income before income taxes 0.142$ Interest (income expense, net) -$ Interest (income expense, net) -$ Depreciation and amortization expense 0.039$ Depreciation and amortization expense 0.010$ Earnings before interest, taxes, depreciation and amortization (EBITDA) 0.535$ Earnings before interest, taxes, depreciation and amortization (EBITDA) 0.152$ Fiscal Year-End ($ millions) 2019 2020 2021 2022 2023 2024 Systemwide Sales: Net retail sales 323.5 249.2 397.7 446.2 456.2 460.3 Third-party sales 47.9 23.3 42.3 62.3 78.9 87.8 Total Systemwide sales 371.4$ 272.5$ 440.0$ 508.5$ 535.0$ 548.1$ Fiscal Year-End ($ millions) 2024 13 Weeks Ended May 3, 2025 ($ millions) Q1 2025 Calculation of EBITDA Calculation of EBITDA Income before income taxes 67.1$ Income before income taxes 19.6$ Interest (income) expense, net (0.9)$ Interest (income) expense, net (0.2)$ Depreciation and amortization expense 14.8$ Depreciation and amortization expense 3.7$ Earnings before interest, taxes, depreciation and amortization (EBITDA) 81.1$ Earnings before interest, taxes, depreciation and amortization (EBITDA) 23.1$
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27 Build-A-Bear Non-GAAP Reconciliations Return on invested capital, Segment ROIC Fiscal Year-End ($ millions) 2022 2023 2024 Calculation of Return on Invested Capital Numerator Net income 48.0$ 52.8$ 51.8$ Operating lease interest 5.5 5.5 6.9 Interest expense (income) 0.0 (0.9) (0.9) Lease adjusted net operating profit after tax 53.5$ 57.4$ 57.9$ Denominator: Current Assets 147.4$ 127.8$ 126.3$ Current Liabilities 101.2 83.7 79.4 Excess Cash (cash in excess of $20m) 22.2 24.3 7.8 Net Working Capital 24.1 19.7 39.1 Operating Leases 71.8 73.4 90.2 Property + Equipment 50.8 55.3 59.8 Other Assets 4.2 7.2 6.1 Total Invested Capital 150.9 155.6 195.2 Average Invested Capital 149.7$ 153.2$ 175.4$ Return on invested capital 35.7% 37.5% 33.0% Fiscal Year-End ($ millions) 2024 Calculation of Return on Invested Capital Commercial Numerator: Pretax Income 15.8 Tax rate, adj. 23.5% Taxes 3.7 Net operating profit after tax 12.1 Commercial Assets 14.0 Average Commercial Assets 11.4 ROIC—Commercial 106% Intl Franchise Numerator: Pretax Income 1.0 Tax rate, adj. 23.5% Taxes 0.2 Net operating profit after tax 0.8 Intl Franchise Assets 2.6 Avg Intl Franchise Assets 1.9 ROIC—Intl Franchise 41% Fiscal Year-End ($ millions) 2024 Calculation of Return on Invested Capital Net Retail Numerator: Pretax Income 50.4 Tax rate, adj. 23.5% Taxes 11.8 NI 38.5 Operating lease interest 6.9 Interest Expense (0.9) NOPAT 44.6 Retail Assets 273,356 Average Retail Assets 267,828 Average Invested Capital 175.4 Net Retail Avg Invested Capital (Co. IC less Comm and Fran assets)162.1 ROIC—Retail 28%
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28 Gary Schnierow Contact Information SVP, Chief Brand Officer KimU@buildabear.com VP, Investor Relations & Corporate Finance GaryS@buildabear.com Kim Utlaut