Good day ladies and gentlemen and welcome to the first quarter 2009 Build-A-Bear Workshop Inc. earnings conference call. My name is Christa and I’ll be your conference operator for today’s call. At this time all participants’ lines are muted and we will conduct a question-and-answer session at the end of this conference. (Operator Instructions). I would now like to turn the call over to your host for today’s call, Molly Salky, Managing Director of Investor Relations. Please proceed.

Thank you, operator and good morning everyone and thank you for joining us. With us this morning are Maxine Clark, Chairman and Chief Executive Bear and Tina Klocke, Chief Operations and Financial Bear. In a moment, I’ll turn the call over to Maxine to provide her comments on the first quarter. Tina will follow with additional comments on our financial results, and at the end of our remarks we’ll open the call up for your questions. Members of the media who may be on our call today should contact us after this conference call with their questions. We ask that you limit your questions to one question at a time, this way we can get to everyone’s question during this one hour call. Do feel free to re-queue if you have further questions. Please note that our call is being recorded and broadcast live via the Internet. The earnings release is available on our Investor Relations portion of our corporate website and a replay of both our call and webcast will be available later today on our IR website. Before we get started, I’ll remind everyone that forward-looking statements are inherently subject to risks and uncertainties. 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 statements. Now I’d like to turn the call over to Maxine Clark. Maxine.

Thanks, Molly and good morning everyone. Thank you for joining us to review our first quarter 2009 results. During the first quarter we managed to our dual goals of maximizing cash flow while continuing to develop our brand and position our company for improved long term profitability and growth. We consider our brands to be the cornerstone of our successful and profitable business model and we’ll continue to preserve and build upon its long-term value by emphasizing our affordable and entertaining store experience and unique product offering. We know better than any one the power of our business model and one it can deliver when revenues are growing. We believe our focus on cutting $15 million out of expenses was appropriate and now our singular focus is on driving sale. Getting back on track to where we know our brand can perform. Mall traffic continued its decline in North America versus the first quarter of last year as families reduced spending and avoided trips to the mall. While our business is impacted by these factors, we also saw bright spots in our sales trends when mall traffic increased. During spring break when kids were out of school and when occasions call for gift giving like Valentine’s Day and Easter particularly. These bright spot helped validate for us that our brand is still top of mind when families are enjoying time together, celebrating special occasions and selecting a gift. With the inclusion of Easter our year-to-date comparable store sales in North America are showing a slight improvement from our first quarter trend and while the economic environment remains uncertain we have identified initiatives which I will expand upon in a moment that we believe position us to improve our performance of our business. Our first quarter results include solid progress towards…

Thanks, Maxine and good morning everyone. I would provide additional details related to our first quarter fiscal 2009 financial performance. Let me start with few comments on the effective currency encounter ships in our quarter. Starting with currency exchange rates there was a significant strengthening of the U.S dollar versus the British pound in 2009 first quarter compared to first quarter 2008. The impact of the foreign currency exchange during the quarter caused reduction in our reported European revenues. The currency exchange rate also reduced our SG&A cost in the first quarter. Our merchandize margin however continues to be negatively impacted in Europe because that we purchased our inventory in U.S dollars. Our sales performance during the quarter was also impacted by the calendar shift of the Easter holiday and associated school vacations from March last year and April this year. In addition, our 2008 fiscal year included 53 weeks plus the finance reporting quarters this year will begin and end a week later than last year, creating some quarter-over-quarter comparison differences throughout the year on reported revenues. Now, to the income statement; net retail sales were $96.3 million in the first quarter, a decline of 19% excluding the impact of foreign currency. This decline was driven by a 20.5% decrease in North American comp store sales. The comp decline comprises both a decline in transactions as a result of the challenging consumer environment and a decline in average transaction value. Our transaction value decline resulted from lower average product price versus last year, as our value focused merchandizing strategy gained traction and these products became a larger component of overall product mix compared to our year-ago first quarter. Transaction declines represented about 15% of the comp change and the drop in transaction value about 5%. Sales from new stores…

Thank you, Tina. I’ll conclude the call with just a few final comments. 2009 is going to remain a challenge and we are putting our focus on what we can impact to maximize cash flow while continuing to develop our brand. We have taken actions to align operating expenses with revenue expectations, low capital expenditures while at the same time, investing in brand building initiatives and our future growth. Our initiative to improve our top line are focused, structure to take greater advantage of changing consumer shopping pattern and supported by enhanced leadership within our company. We believe these initiatives can improve our sales trends over the balance of the year. Our debt-free balance sheet and $40 million bank credit line provide financial flexibility, liquidity and staying power. We look forward to updating you on our program in the months ahead. Thank you for your participation and now we can take your questions.

(Operator Instructions) Your first question comes from Tracy Kogan - Credit Suisse.

First question is, you mentioned the improvement in April around Easter, can you just quantify how much you think it hurts your comp in the first quarter, and then secondly I was hoping you could quantify some of those changes in the merchandise margin and the buying in occupancy de-leverage. Thanks a lot. - Credit Suisse: First question is, you mentioned the improvement in April around Easter, can you just quantify how much you think it hurts your comp in the first quarter, and then secondly I was hoping you could quantify some of those changes in the merchandise margin and the buying in occupancy de-leverage. Thanks a lot.

With inclusion of Easter we talked about our year-to-date comparable store sales showing a slight improvement over the end of the first quarter, so that we did see an improvement in the trend from the Easter season so to speak. From a perspective of the gross margin, the majority of it was a de-leverage of occupancy cost in North America and some de-leverage in our gross margin on the value price animals and some impact of foreign currency translation in Europe and that was about a 100 basis points on the foreign currency translation, because as a remainder we do purchase all of our inventory in U.S. dollars.

Your next comes from the line of Tom Filandro - SIG.

Two quick questions if I can. One is Maxine can give us a better understanding of your comments about identifying some stronger assortment and rebalancing between value and core, to be more specific in terms of how we should look at the assortment go forward in terms of pricing and positioning. Then my second question is more broadly speaking in terms of John’s impact on the business. Can you give us a little insight, you kind of noted that he had some positive impacts, can you give us some inside on exactly what the impact has been and how he is viewing your marketing spend go forward? Thank you very much.

Tom we always had our value pricing, but now that simply actually begun to feature it in our marketing messaging, we sort of separated out those animals and we’re calling the value price a points that $10 and $12 predominantly and some $14, and then every thing that’s in the middle of that from above that point is our core line. Then we also bring in our seasonal and fashion items that might be just seasonal and sometimes they are at 14, sometimes they are at 16 it just depends on what the animal is. So we are looking at that more critically than we did before, because the customers gravitating so much to the lower side of the spectrum. So we want to make sure that we don’t offer too many things in that price point and that we also have enough inventory behind the items that we do have, so that it balance and we are not chasing $10, we have to fly them in out of stock. So that’s really what we’re looking at from that point, but still it’s always been there. We use to call it just core that was just part of our core inline anything that was not seasonal and/or fashion like Hannah Montana, but today since it has become such a strong segment because of its priced importance we are separating or calling it value, so that we are constantly measuring how much of percentage total of our business it is, how many shows it is on the wall and how much inventory we have behind it. As far as John is concerned, I’m sure you’re going to appreciate that he has only been here for just six weeks, but I have known John for a long time, we have been talking…

Your next question comes from Mike Smith – Kansas City Capital. Mike Smith – Kansas City Capital: I have a couple of questions actually. I missed when Tina was talking about the doll, where you stand in terms of closing that our, how many are you going to convert the Build-A-Bears and so forth. The other thing I was kind of interested in, as you’re gross margins are probably going to improve because of better buying for the lower price point, can you quantify that for me?

The store closing expenses that we talked about in the quarter were about $500,000 relating primarily to these termination expenses and that we have eight more locations to close and that we should have them closed by the end of the third quarter. Of those eight we’ll convert three of those to expanded Build-A-Bear location and from our perspective of gross margin improvement we really have not teased that out on a go forward basis, but as you would anticipate our goal was to get back and mind with the high merchandized margins we have enjoyed over years back.

What does that mean Tina?

Well, it means that we have enjoyed high initial merchandize mark ups and years passed that we want to get back to. As I detailed in my comments, we did see a decline in merchandize margins that impacted the margins and really at this point in time can not quantify it for you on a futuristic basis, but we feel now that our pricing of our inventors are inline with now our retail pricing of our products.

Last year, obviously our $10 and $12 almost were always in there and at there price in the margin, but we use that opportunity to markets of the customer and we tested that in July and then by the time we got to the fall season we could see that the economy had changed even more dramatically after mid-September. We moved some price points of things that it slowed up dramatically that were higher price like $18 or $15 or $14 into some of those price points and so those we sort of just made them happen because we need it to because of the way business have slowed down, but going forward now we have a plan of those what we’re going to have with those price points that we’ve walked to those price points. Not that we might not have one or two things that we might include at a lower price, but right now our plan is that we’ve bought into these particular price points with new and/or existing four products that we’ve negotiated or markup at so that we’re not taking the lessons markdown, taking them down to a price point there, going to be at a price point they own them at and we’ll feature animal at $10 and $12, not animals that used to be, but another that our now $10 and $12.

Your next question comes from James Lewellis – Needham & Co. James Lewellis - Needham & Co: I have two questions related to comps. The first one is what’s the potential impact of the Easter shift that being that being now it has come and gone how much of the comps are attributable to that shift? And the other is about gross margins. What will be the prognosis for comps if gross margins stayed in the negative teen?

So, again Jim as we talked about on the call we did say that our, with the Easter shift that our comps year-to-date were slightly improved over our comps that we reported for the first quarter in North America of 20.5%. So, keep in mind in Europe, we’ve also enjoyed improved comps also there after the Easter shift and from a perspective of margin and comp store sales, I think again we’re working hard to increase those margins along with increasing the top line revenue of our business, and so up to end we are going to do -- as Maxine talked about negotiating with our vendors and getting the margins in line with the top line revenue. So, basically as we rebalance the assortment and we get something to 10 and something to 12 and maybe move more things from 10 to 12 and 12 to 14, we’ll have the higher HPG which equals more gross margin and also should improve the comps. I mean, definitely selling a large percentage of items that at lower price points right now, while its has increased the transactions it’s dramatically over what they were before. It’s not enough to really drive the comp store sales. You need a lot more traffic and I don’t know as anybody is getting that at this point, but we can see an improvement and we think that these price points will become more part of our assortment in the near-term for a longer time, but at a little bit we are going to hedge them up higher a little at a time and focus on some really strong product at these particular value core and then fashion price points.

Your next question comes from Brad Leonard - BMO Capital Management. Brad Leonard – BMO Capital Management: Can we just get an idea of what are the merchandise margins? How much do that hurt the Q1, I mean was it a 100 basis points. I would guess that it was closer to 200 to 300 basis points of the decline and the gross margin was due to merchandized margin. Occupancy alone couldn’t have done, it couldn’t have been 700 basis points or whatever it was. Can you give some more color on that and then also you’ve mentioned that you’re seeing some stabilization in transactions. I’ve taken your comments.

Tina will take the first part and I’ll take the second.

So Brad, I would tell you that the majority of the gross margin decline is on the de-leveraging of the fixed cost and just as a reminder, those fixed cost is rank utilities and depreciation and that is added to the gross margin. I did talk about a 100 point basis on foreign currency on the merchandized margins, so take that into account. Then there was a slight decline in the other part of the merchandized margin, which was impacted by currency.

So, the transactions are still down over last year, but they’re not down as much as they were, but the HPG is down because of the value pricing. So that has impacted the dollar value of each transaction. We would be significantly better if we even achieve the lower transactions that we had this year at last year’s average transaction price for the quarter. If you’re comparing first quarter of this year to first quarter of last year, HPG as we call it against this year’s transactions, it would have been a significant improvement if we’ve had last year’s HPG on this year’s transaction.

(Operator Instruction) Your next question comes from Mike Smith - Kansas City Capital. Mike Smith – Kansas City Capital: Going back to the margins, the cost of goods sold this year was 63.4%, the cost of goods sold in the same period last year was 56.4%, variation of 690 basis points. I know that when I asked you the question earlier, you said you hope to get back to the old rates which net cost of goods sold were between 53% and 55%. How long do you think it will take you to get there?

I think Mike, in the economic environment that we are in; it’s really hard to project that. It’s going to be how we are able to grow our top line and we think we are working diligently on those initiatives to grow the top line. As we grow the top line, we’re going to be able to leverage our fixed expenses, which is at this point in time is the majority of our decline in our gross margin.

You final question comes from Brad Leonard - BMO Capital Management.

Maxine, on your comments about your year-to-date trends for the comps, I just want to quantify you said year-to-date trends so your improved four months or whatever we are in now versus saying April trends. So obviously the April trends are going to be a bigger shift with jump at the Easter shift that I would imagine. Obviously year-to-date trends are better than what we’re seeing. So that doesn’t really tell us what, and I know comparing this April to last April is not going to give us an apples-to-apples?

Right and that’s why we are looking at it all together and I think as I said this in last quarter’s call that I think we’ll have a much better feeling about in the business and where the consumers at after the second quarter, because unlike other retailers our Easter shifts between first quarter and second quarter and just not knowing how travel would be in spring vacations, all those things have a greater impact on us, but I think that we’ll have a better understanding. I feel actually that with the things that we are putting in place for our promotional efforts can not off price, but still mentioning our value products as well our gift with purchase promotions that we’re doing and the way we change the length of them will help us improve our business, because it is a promotion to the customer and it is a reason why you’re in the mall near to come into Build-A-Bear side. I feel that we will start to see an improvement on that borrowing any unforeseen crazy things might go on in the economy or if this flu situation isn’t prolonged, I think we’ll get back to what we were starting to feel a little bit much more positive about our business and certainly we’re seeing that improvement more significantly in the UK and Europe and then in Canada, but not yet as much as we’d like to see it in the United States.

At this time, there are no further questions. I would like to turn the call back over to Ms. Molly Salky.

Thank you, operator and thanks to everyone for your participation today. If you have any follow up questions, please give me a call or send me an e-mail. Thanks and have a great day.

Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Have a good day.