Build-A-Bear Workshop 2014 Annual Report Download - page 25

• the eectiveness of our inventory management;
• the timing and frequency of our marketing initiatives;
• changes in consumer preferences;
• the continued introduction and expansion of merchandise
oerings;
• actions of competitors or mall anchors and co-tenants;
• weather conditions;
• the timing of store closures, relocations and openings and related
expenses; and
• the timing and frequency of national media appearances and
other public relations events.
If our future quarterly results fluctuate significantly or fail to meet the
expectations of the investment community, then the market price of
our common stock could decline substantially.
Fluctuations in our operating results could reduce our cash flow and
we may be unable to repurchase shares at all or at the times or in the
amounts we desire or the results of the share repurchase program
may not be as beneficial as we would like.
In February 2015, our Board of Directors implemented a $10 million
share repurchase program, after terminating the previously existing
share repurchase plan under which we had repurchased 6.2
million shares of our common stock for an aggregate price of $46.2
million since February 2007. The new program does not require
the Company to repurchase any specific number of shares of our
common stock, and may be modified, suspended or terminated at
any time without prior notice. Shares repurchased under the program
will be subsequently retired. If our cash flow decreases as a result
of decreased sales, increased expenses or capital expenditures or
other uses of cash, we may not be able to repurchase shares of our
common stock at all or at times or in the amounts we desire. As a
result, the results of the share repurchase program may not be as
beneficial as we would like.
Our certificate of incorporation and bylaws and Delaware law
contain provisions that may prevent or frustrate attempts to replace
or remove our current management by our stockholders, even if such
replacement or removal may be in our stockholders’ best interests.
Our basic corporate documents and Delaware law contain provisions
that might enable our management to resist a takeover. These
provisions:
• restrict various types of business combinations with significant
stockholders;
• provide for a classified board of directors;
• limit the right of stockholders to remove directors or change the
size of the board of directors;
• limit the right of stockholders to fill vacancies on the board of
directors;
• limit the right of stockholders to act by written consent and to call a
special meeting of stockholders or propose other actions;
• require a higher percentage of stockholders than would otherwise
be required to amend, alter, change or repeal our bylaws and
certain provisions of our certificate of incorporation; and
• authorize the issuance of preferred stock with any voting rights,
dividend rights, conversion privileges, redemption rights and
liquidation rights and other rights, preferences, privileges, powers,
qualifications, limitations or restrictions as may be specified by our
board of directors.
These provisions may:
• discourage, delay or prevent a change in the control of our
company or a change in our management, even if such change
may be in the best interests of our stockholders;
• adversely aect the voting power of holders of common stock; and
• limit the price that investors might be willing to pay in the future for
shares of our common stock.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 2. PROPERTIES
Stores
We lease all of our store locations. As of January 3, 2015, we operated
324 retail stores located primarily in major malls throughout the
United States, Canada, Puerto Rico, the United Kingdom and Ireland
in our Retail segment. Our leases in the United Kingdom and Ireland
typically have rent reviews every five years in which the base rental
rate is adjusted to current market rates if they are higher than the
original rent agreed.
Non-Store Properties
In addition to leasing all of our store locations, we own a warehouse
and distribution center in Groveport, Ohio, which is utilized primarily
by our Retail segment. The facility is approximately 350,000
square feet and includes our web fulfillment site. We also lease
approximately 59,000 square feet for our corporate headquarters in
St. Louis, Missouri which houses our corporate sta, our call center
and our on-site training facilities. The lease was amended, eective
January 1, 2014 with a five-year term. In the United Kingdom, we lease
approximately 2,500 square feet for our regional headquarters in
Windsor, England. The lease commenced in August 2003 and can be
terminated at any time by either party giving notice of termination six
months prior to cancellation.
BUILD-A-BEAR WORKSHOP, INC. 2014 ANNUAL REPORT 13