UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event
reported) February 25, 2005
Build-A-Bear Workshop, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 001-32320 43-1883836
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(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
1954 Innerbelt Business Center Drive 63114
St. Louis, Missouri ------------------
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(Address of Principal Executive Offices)
(314) 423-8000
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(Registrant's Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 4.02. Non-Reliance on Previously Issued Financial Statements or a
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Related Audit Report or Completed Interim Review.
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(a) On February 25, 2005, management of Build-A-Bear Workshop, Inc. (the
"Company") discussed with the Audit Committee of the Board of Directors of the
Company a February 7, 2005 clarification of existing generally accepted
accounting principles ("GAAP") applicable to leases and leasehold improvements
articulated by the Office of the Chief Accountant of the Securities and Exchange
Commission ("SEC"). The Company has determined it will restate certain prior
period financial statements in order to correct its current method of accounting
for rent holidays and landlord allowances. The Audit Committee concluded that
the Company's previously issued audited consolidated financial statements should
no longer be relied upon because of the errors described above.
Historically, the Company has recognized rent expense for leases on a
straight-line basis beginning on the earlier of the store opening date or lease
commencement date, which had the effect of excluding the build-out period (or
"rent holiday") from the calculation of the period over which rent is expensed.
Based on internal review and discussions with the Audit Committee and the
Company's independent public accountants, the Company has determined that it
will correct its accounting practices to include the build-out period in the
calculation of the period over which rent is expensed.
Furthermore, the Company has historically accounted for landlord allowances
as a reduction of the cost of leasehold improvements. Based on internal review
and discussions with the Audit Committee and the Company's independent public
accountants, the Company has determined that it will now account for landlord
allowances as a deferred credit that will be recognized over the term of the
lease as a reduction of rent expense. The term of the lease, as mentioned above,
will now include the build-out period. The corrections to lease accounting
methods will not have an impact on the cash flow and total rent expense over the
periods of the underlying leases.
Authorized officers of the Company have discussed with the Company's
independent registered public accounting firm the Company's determination that
previously issued financial statements should no longer be relied upon because
of the errors described above. The Company is currently working with its
independent accountants to quantify the error and the impacted periods.
The Company issued a press release in connection with the foregoing on
February 28, 2005. The Company anticipates concluding its review in conjunction
with announcing fiscal 2004 financial results on March 10, 2005. A copy of the
press release is furnished as Exhibit 99.1 hereto and is incorporated by
reference herein. The description of the press release contained herein is
qualified in its entirety by the full text of such exhibit.
Item 9.01 Financial Statements and Exhibits.
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(c) Exhibits
Exhibit Number Description of Exhibit
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99.1 Press Release dated February 28, 2005
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BUILD-A-BEAR WORKSHOP, INC.
(Registrant)
Date: February 28, 2005 /s/ Tina Klocke
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Name: Tina Klocke
Title: Chief Financial Bear, Secretary and
Treasurer
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EXHIBIT INDEX
Exhibit Number Description of Exhibit
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99.1 Press Release dated February 28, 2005
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