Greetings and welcome to the Build-A-Bear Workshop Third Quarter Fiscal 2012 Results conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star, zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Alison Malkin of ICR. Thank you, Ms. Malkin. You may begin. Alison Malkin – ICR: Good morning. Thank you for joining us. With me today are Maxine Clarke, Chairman and Chief Executive Bear, and Tina Klocke, Chief Operations and Financial Bear. Before I turn the call over to management, I want to remind members of the media who may be on our call today to contact us after this conference call with their questions. We ask that you limit your questions to one questions and one follow-up. This way, we can get to everyone’s questions during this one-hour call. Feel free to re-queue if you have further questions. Please note our call is being recorded and broadcast live via the Internet. The earnings release is available on the Investor Relations portion of our corporate website and a replay of both our call and webcast will be available later today on the IR site. Before we get started, I will remind everyone that forward-looking statements are inherently subject to risks and uncertainties and our actual results could differ materially from those currently anticipated due to a number of factors, including those set forth in the risk factors section in our annual report on Form 10-K, and we undertake no obligation to update or revise any forward-looking statement. Now I would like to turn the call over to Maxine. Maxine?

Thank you, Alison, and good morning everyone. Thank you for joining us to discuss our 2012 third quarter and first nine months results. On our call today, I’ll review the progress that we’ve made on our key strategies as well as update you on our store, marketing and product initiatives; then I’ll turn the call over to Tina Klocke, our Chief Operations and Financial Bear, to review the financial results in more detail. After my concluding remarks, we will open the call to answer your questions. Clearly we are disappointed with our third quarter results. We were up against a difficult comparison from last year when product tied to the release of the Smurfs movie drove traffic and transactions throughout the quarter. Our product and marketing events were not strong enough to offset the strength of last year’s product, which was supported by tremendous studio marketing and advertising. As you know, we are in a turnaround phase. Build-A-Bear Workshop has historically produced very high sales per square foot and profitability, and we are taking steps that are needed to regain that position. For more than a year, we’ve had bold actions in play to deliver our long-term strategies and objectives. As a reminder, our objectives as well as our recent progress include, first, introducing a new store design to reinvent our experience that gives our stores destination appeal. We have opened three of the six stores scheduled for this year. Second, improve store productivity by reducing our store base and overall square footage to drive traffic and sales to fewer stores that are overall more profitable. We are in the midst of executing aggressive store closure and repositioning plans. Third, increase shopping frequency by rebalancing our marketing to emphasize brand advertisement as opposed to strictly product and promotion messaging. In…

Thanks, Maxine, and good morning everyone. I will highlight the key components of our third quarter and first nine months results. The full details can be found in our press release. For the quarter, total revenues were 86 million, a decrease of 12% excluding the impact of foreign exchange. Consolidated net retail sales decreased 11.9% excluding the impact of foreign exchange. This decrease was driven by a comp store sales decline of 11.1% due to the decline in transactions as our average transaction value was flat. Ecommerce sales declined 7.6% excluding the impact of foreign exchange. Retail gross margin declined 370 basis points to 36.5%. We had benefits from reduced packaging costs; however, this benefit was offset by de-leverage of occupancy cost of 270 basis points and merchandise margin pressure of 130 basis points. SG&A decreased to 37 million or 42.5% of total revenues compared to 39% in 2011. The dollar savings were a result of lower store payroll. The increase as a percent of sales was driven by the de-leverage of advertising and corporate expenses. Pre-tax loss was 4 million compared to pre-tax income of 2 million last year. Our effective tax rate was 4.5% in the third quarter compared to 54% last year. Our tax rate continues to have high volatility due to the valuation allowance established on all of our U.S. deferred tax assets at the end of 2011. Net loss was 4 million or $0.26 per share. This compares to net income of 900,000 or $0.05 per diluted share last year. Net loss for the quarter was negatively impacted by $0.14 per share related to the changes in the effective tax rate and $0.02 per share resulting from a change in share count due to repurchases that were made in the fourth quarter of 2011. Turning…

Thank you, Tina, and I apologize again for our loss of electricity. We’re both using our mobiles, so I hope you can hear us. At the end of our last quarterly earnings call, I wrapped up by saying that I’m confident we will post improvement in sales productivity and profitability when 2012 is complete. I still feel that way. Our brand is a favorite of kids and moms, which we have seen clearly in the initial response to our new store design. I want to emphasize that our plans are not just about closing stores. We are changing our business dynamics across the board. What does success look like for Build-A-Bear Workshop? Success means positive comps starting in the fourth quarter driven by a balanced assortment and supported by our brand advertising. Success means consistent annual profitability. This will come from elevating our experience and reducing our store count to have destination locations in each market. For the end of 2014, we expect to have between 225 to 250 locations in North America. These stores will have higher sales and profitability as they benefit from the transfer of sales from closed locations. The other essential piece of our plan is to refresh our store design in at least 40 to 50 locations, and we expect to continue our global expansion particularly with existing and new franchisees. I am optimistic as we begin the fourth quarter. We continue to drive all of our long-term strategies in order to return our company to its leadership position for the benefit of our shareholders, our associates and our guests. And with that, I’ll open the call for your questions.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star, one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star, two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Tom Filandro of Susquehanna Financial Group. Please proceed with your question. Tom Filandro – Susquehanna Financial Group: Hey, thanks. Maxine, can you please first confirm – you guys are paying your electric bills, right?

Yes! The whole place is dark, the whole office complex outside and all around us. It’s not just us here. Somebody must have cut a cable. Tom Filandro – Susquehanna Financial Group: Okay, well hopefully everybody’s safe. So two quick questions – I want to really hone in a little bit more on the new store design. Can you be more specific about what’s going on in that store that’s different than your core stores; and more important is from a merchandising point of view, what are the variances there? And then my second question is also related to that. If you can more deeply explain what you said about that 30% pop, is it possible that you’re a little premature in identifying 50 to 60 store closings if you’ve just identified what potentially can be a big productivity boost to your core base? Thank you.

Thank you, Tom. That’s a good and long question. So let’s just say that we’ve always said at Build-A-Bear Workshop, the story for the customer, what they’re paying for when they come into our stores, is half of it is the product and half is the experience. While our product has changed over time a lot, meaning every couple of months or every couple of weeks sometimes we’re changing and bringing in new products, we really haven’t changed our experience in 15 years. And that’s pretty amazing when you think that we’ve stood the test of time that way with children who are constantly being bombarded with new and different all the time. So we have been aware, obviously, when we added Bearville that that was something that kids liked, and gaming is a big part of our engagement after the Build-A-Bear Workshop experience. But we really wanted to figure out how to incorporate that love of the technology with their love of a soft, cuddly stuffed animal, and we’ve worked hard on that for the last 18 months, including our guests—I mean, totally including our guests to help us do that. So the store—you know, you’ll basically go through the same processes, but we’ve enhanced several of them. The first one that’s been enhanced is the opening of the store. You can actually see into the store, you’re not blocked by signing. Everything is wide open and bright. We have interactive digital signing at the door that greets you and tells you about the new merchandise, but we can also convert it into a game that kids can play with on the front door if there’s lines, which fortunately in these new stores – in some ways, that’s fortunate, anyway, they have been – and they’re playing with that…

Thank you, and again as a reminder, if you would like to ask a question at this time, please press star, one on your telephone keypad. Our next question comes from the line of Gerrick Johnson of BMO Capital Markets. Please proceed with your question. Gerrick Johnson – BMO Capital Markets: Hey, good morning. I was wondering if you could talk about the impact of the Olympics on the U.K. business. Was it a positive or was it actually a negative, considering the change in shopping dynamics over there?

I’d say it was probably a negative. In some places, like in Stratford Mall where we have a store, they actually closed it off. They had tight security so people were having their bags checked, so it was probably not as well executed in the retail space. They also told people to stay home, so in some parts of central London it wasn’t nearly as busy as it should have been, and we know this to be true also from our concessions that we have in other retail stores, not just Build-A-Bear but how other stores fared. So I think it was really good leading up to it, and the Queen’s Jubilee and all of that was really fabulous for business, and especially in London stores where that was tourist and traffic driven. But when the onslaught of tourists came, they weren’t shopping as much as any of us had hoped in the retail area. But quite frankly, we had started the British products category starting at Boxing Day this past year, so we actually had a phenomenal year in selling product that related to I Heart London, I Heart Great Britain, the Union Jack, all kinds of fashion products that revolved around the patriotism going on in the U.K. Bu those couple of weeks of the Olympics were quite difficult. Gerrick Johnson – BMO Capital Markets: Okay, great. Thank you. Can I ask two questions?

Sure. Gerrick Johnson – BMO Capital Markets: All right. Excluding the stores that you guys are planning for closing, do you know what your 3Q same store sales result would have been for the rest of the portfolio? I mean, I understand there’s going to be different dynamics after those closures, but right now how are those other stores excluding the, was it 50 or 60 or so that are planned for closing, how are those comping?

We haven’t actually determined all the stores that we’ll exactly close, just the ones maybe in early stages of the decision-making process, so we can’t tell you that by market. But we’re really looking at the stores on—they aren’t closed, so they aren’t having an impact on the other stores yet except in stores that we’ve closed in prior years and earlier this year, where we did have an average of about a 20 to 30% transfer sales, so that helps that store that’s receiving the sales. But otherwise, we haven’t closed those stores and there’s no way to tell you their comps, because the other stores are still open. Gerrick Johnson – BMO Capital Markets: Okay, all right. Thank you.

Thank you. We do have a follow-up question from the line of Tom Filandro of Susquehanna Financial Group. Please proceed with your question. Tom Filandro – Susquehanna Financial Group: Hey, just one quick one on the marketing, sort of a two-part question. One, I think I heard Tina say that the ATV for the quarter was basically flat, so what I’m curious about, Maxine, is why the change in strategy on the marketing where I think you had said previously that the marketing was more tied to pricing, and now you want to tie it more to branding if you didn’t see a downward pressure on ATV, and maybe AUR was there – maybe that’s the reason. And then the second part of that question is how do you leverage television advertising and marketing overall, and if Tina, if you could put some numbers around this when you’re going to have 30 to 35 million, I think you said, of lower volume as you close these stores over time. Thank you.

Well, that’s a challenge that we’re working on because the marketing is working, and we can see that already in the change in our trends even since it started, and that’s pretty much what we had back in October of 2003 when we started testing television. We were—we turned a significant negative into a positive by telling people about the brand of Build-A-Bear Workshop, and so the same thing has already started to happen so we can see that this is different. And it really is – when you look at the commercial, I think you’ll see. If you can remember back to our first commercials, it’s a child engaged in the Build-A-Bear Workshop experience and mom is present, and that is the way the Build-A-Bear Workshop experience happens most of the time and we never show that. We haven’t shown that in years, in four years, and so the customer—the young customers who have been growing up with us, they don’t remember, four years is a lifetime to them. But the little kids that are just coming into our age, the 3 to 6 year olds, have never seen it, so if they don’t want that Hello Kitty that we had on television or they don’t care about—children don’t care about 29.99, mom cares about that. That’s all they’ve really seen, and we had to do that in 2008 in response to the recession and cutting back advertising dollars pretty dramatically. We’re nowhere near those numbers, by the way. While we might end up a little bit higher in dollars for the quarter because we want to invest in this, you remember when you first met us, we had turned those dollars into huge sales and profitability by investing in the marketing. So we can’t exactly tell you the…

I mean, it’s historically been around $35 a transaction, and I think that we’re projecting it to be fairly consistent through the fourth quarter. Again, we’ll see slight variations over time, but as Maxine said, the real thing that we need to do is drive transactions and that’s one of the things that not only brand TV advertising did for us, it also reignites customers that may not have been in our store in a while. So again, it brings new and then brings the current customers back.

You know, one of the things, Tom, that I think is important just to highlight here is that we ran—for the grand opening of the St. Louis West County store, we ran television advertising around that, not the first two weeks but the second two weeks after it had opened. We let the normal buzz start on that. And the good news here is that we haven’t seen the dissipation of the sales at the St. Louis Galleria, which was about 8 miles apart. They’ve actually held their own and that’s pretty impressive, and I think that the only reason that’s happening is because of the brand advertising. It’s elevating the brand, and so people are going to their St. Louis Galleria, the Fairview Heights store, and the West County store, which is exactly what we wanted – again, another vote for brand advertising. Tom Filandro – Susquehanna Financial Group: Understood. Thank you.

Thank you. And as a reminder, ladies and gentlemen, if you would like to ask a question at this time, please press star, one on your telephone keypad. One moment, please, while we poll for any additional questions. It appears there are no further questions at this time. I would like to turn the call back over to Ms. Clarke for any closing comments.

Thanks again for joining us today. I wish all of you a happy holiday and look forward to speaking with you when we report our year-end results in February. Thank you.

Thank you. This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.