Cash Management

Build-A-Bear to Fix Fuzzy Financials

The company understated cash used in operations and overstated cash used in investments.
Stephen TaubNovember 14, 2007

The specialty retailer Build-A-Bear Workshop is busily reconstructing financial statements to correct a number of errors.

The company said its cash flow statement incorrectly reported depreciation and amortization and purchases of property and equipment for the first half of the current calendar year. This caused an understatement of cash used in operating activities and overstated cash used in investing activities.

In addition, capital expenditures and depreciation and amortization for the retail segment were incorrectly reported in a footnote, Build-A-Bear said. The company also said it misstated comprehensive income for the 13 and 26 weeks ended June 30, 2007 and July 1, 2006, respectively.

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As a result of these errors, the company said it will restate its cash flow statement for the first half of 2007 and comprehensive income for the 13- and 26-week periods. But it added that its net change in cash and cash equivalents will not be impacted.

Build-A-Bear said the errors were the result of a material weakness within internal controls over financial reporting, and that it has already taken remedial action.