FORM 10-Q

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  ☒    No   ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No   ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 14(a)13(a) of the Exchange Act. ☐    

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No   ☒

As of December 7, 2020,6, 2021, there were 15,960,26216,327,849 issued and outstanding shares of the registrant’s common stock.

PART I-FINANCIAL INFORMATION

Item 1. Financial Statements

BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except share and per share data)

See accompanying notes to condensed consolidated financial statements.

BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

(Dollars in thousands, except share and per share data)

 See accompanying notes to condensed consolidated financial statements. 

BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands) 

See accompanying notes to condensed consolidated financial statements.

Notes to Condensed Consolidated Financial Statements

1. Basis of Presentation

The condensed consolidated financial statements included herein are unaudited and have been prepared by Build-A-Bear Workshop, Inc. and its subsidiaries (collectively, the “Company”) pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated balance sheet of the Company as of February 1, 2020January 30, 2021 was derived from the Company’s audited consolidated balance sheet as of that date. All other condensed consolidated financial statements contained herein are unaudited and reflect all adjustments which are, in the opinion of management, necessary to summarize fairly the financial position of the Company and the results of the Company’s operations and cash flows for the periods presented. All of these adjustments are of a normal recurring nature. All significant intercompany balances and transactions have been eliminated in consolidation. Because of the seasonal nature of the Company’s operations, results of operations of any single reporting period should not be considered as indicative of results for a full year. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the fiscal year ended February 1, 2020January 30, 2021, which were included in the Company’s Annual Report on Form 10-K filed with the SEC on April 16, 2020.15, 2021. 

COVID-19COVID Pandemic

InThe Company's results of operations in fiscal March 2020 ended January 30, 2021 were significantly negatively impacted by COVID which was declared a global pandemic by the World Health Organization announced that COVID-19 is a global pandemic. Onin March 17, 2020,2020. the Company announced the temporary closure of all corporately-managed stores in the United States, Canada, the United Kingdom, Denmark and Ireland as a result of local and governmental restrictions due to the pandemic. In addition, on March 26, 2020, the Company announced the temporary closure of its warehouse and e-commerce fulfillment center in Ohio as it reviewed its process related to workplace safety, including social distancing and sanitation practices recommended by the Centers for Disease Control and Prevention. The Ohio warehouse was reopened on April 1, 2020 following the review and reconfiguration of workflow and workspaces to further promote social distancing and minimize interaction as merchandise is shipped to stores and e-commerce orders are fulfilled. The Company took various initial steps in response to COVID-19, such as furloughing employees, reducing compensation for all corporate employees including its executive officers, delaying payment of bonuses and 401(k) plan matching contributions, reducing planned capital expenditures to maintenance levels, deferring payments through extension of terms, and leveraging outstanding rent payments to landlords and high optionality in the leases in its real estate portfolio to aggressively renegotiate more favorable terms. During the second quarter, the Company reopened the vast majority of its corporately-managed store locations, many with shortened hours of operations and lower traffic levels, saw strong digital demand on its e-commerce site, accelerated its omni-channel competencies, and continued disciplined expense management and cash preservation which included the renegotiation of lease terms to include rent reductions, deferrals and abatements.

Operational and Distribution Network Update for the third quarter due to COVID-19:

              At the beginning of fiscal 2021 most of the fourth quarter, the Company temporarily closed 43Company's United States store portfolio was open and operating while its stores in the United Kingdom, Canada, and Ireland remained temporarily closed. In April 2021, stores in the United Kingdom reopened as a resultthe government lifted lockdown restrictions resulting in almost all of governmental COVID-the Company's stores operating as of the end of the 192021 mandates. These temporary closures werefirst fiscal quarter with the remaining stores in addition to 2the United Kingdom and Ireland opening in the second fiscal quarter and ending the second fiscal quarter with all stores thatopen. The majority of the Company's Canadian stores were temporarily closed to begin the second fiscal quarter with the majority reopening in Ireland shortly beforeJune 2021 and with all stores open at the end of second fiscal quarter. During the third quarter, temporary, unplanned store closures occurred due to COVID exposures on a limited basis, with 0 stores temporarily closed as of the end of the third quarter due to  COVID-19 mandates. As of December 2, 2020, 39 of these locations in the United Kingdom reopened as restrictions in those jurisdictions were eased.

The Company's operating results for the thirteen and thirty-nine weeks ended October 31, 2020may not be indicative of the results that may be expected for the fiscal year ending January 30, 2021 primarily due to the impact of the COVID-19 pandemic. The pandemic has had, and will continue to have, a negative impact on the Company's retail store operations and financial condition and will continue to affect its cash flows, although the full extent is uncertain at this time. As the pandemic continues to evolve, the extent of the future impact will depend on additional developments, including, but not limited to, the duration and extent of any temporary closing of certain of its stores, the enactment and duration of governmentally-mandated quarantines, shelter-in-place orders and other travel restrictions within the U.S. and other affected countries, the duration and spread of the pandemic (including any relapses), its severity, the actions to contain the virus and/or treat its impact including approval and distribution of vaccines, the duration, timing and severity of the impact on consumer spending (including the recession resulting from the pandemic), and how quickly and to what extent economic and operating conditions can recover and resume, all of which are highly uncertain and cannot be predicted.

In addition, the Company’s business is subject to seasonal fluctuations, with significant portions of the Company’s revenues and net income being realized during the fourth quarter of the fiscal year due to the holiday selling season. Therefore, the results for the thirteen and thirty-nine weeks ended October 31, 2020 are not necessarily indicative of the results to be expected for the fiscal year ending January 30,2021, or for any other future interim period or for any future year.

The Company had not borrowed on its credit facility as of December 7, 2020. Inclusive of the Company's credit facility, the Company's liquidity may be negatively impacted if the pandemic results in the temporary closure of certain of its stores in various locations due to local mandates or requirements. The Company believes that its current cash balance, access to its revolving credit facility, along with the expense management and cash preservation actions taken, provide it with sufficient, current liquidity. Due to the ongoing uncertainty regarding the future impact of COVID-19 and consumer shopping behavior, the Company expects to continue to carefully manage its cash position, and may take further actions to further improve its cash position, including but not limited to, monetizing Company assets, continuing its more aggressive inventory management, reimplementing employee furloughs or further position eliminations, and continuing to forego capital expenditures and other discretionary expenses.quarter.

Significant Accounting Policies

The Company's significant accounting policies are summarized in Note 2 to the consolidated financial statements included in its Form 10-K for the year ended February 1, 2020. January 30, 2021.An update and supplement to these policies is needed for the Company's accounting for government assistance and long-live asset impairment.

Government Grants

As a result of the pandemic, governments enacted relief legislation and stimulus packages to help combat the economic effects through such things as payroll expense reimbursement and business and restart grants. Due to the nature of these grants relating to income, they can be presented in one of two ways: (1) a credit in the income statement under a general heading such as "other income" or (2) as a reduction to the related expense. The Company applied for reimbursement of payroll expenses in certain jurisdictions through COVID-19COVID related government programs for payroll paid to employees who were paid while not providing services to the Company duringand for business and restart grants from the firstthree quarters of fiscal 2020. These programs require the Company to apply to theUnited Kingdom government for reimbursement of wages based onbusinesses in the applicable lawsretail, hospitality and programs within each jurisdiction. Through review of and application to these programs, theleisure sectors. The Company believes it qualifies for such reimbursement, and it is probable that the expenses will be reimbursed. As a result, the Company

recorded a reduction toof expenses of approximately $0.3$0.4 million for the thirteen weeks ended October 31, 2020 and $3.3 million for the thirty-nine weeks ended October 31, 202030, 2021 related to these wages within the Selling, general and administrative line in the Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) for employees in the period ending October 31, 2020United States upon receipt of cash from the U.S. Government and asin Canada from the Canadian government. In the prior year, the Company did not record a reduction to expense for the full amount applied for under U.S. Government programs due to the new nature of the endprograms and uncertainty of collectability. As the thirdcash was received in the current quarter $1.2 million offor the reimbursement was outstanding from tax authorities.

Long-live Assets, including right-of-use operating lease assets

Whenever facts and circumstances indicate thatfull amount applied for, the carrying value of long-lived assets and right-of-use operating lease assets may Company recorded the reduction in expense not be recoverable, the carrying value of those assets is reviewed. If this review indicates that the carrying value of the asset will not be recovered, as determined based on projected undiscounted cash flows related to the asset over its remaining life, the carrying value of the asset is reduced to its estimated fair value. The Company typically performs an annual assessment of its store assetsrecorded in the direct-to-consumer (“DTC”) segment, based on operating performance and forecasts of future performance. As a result of the COVID-19 pandemic, the Company experienced lower than projected revenues and identified indicators of impairment for its store fleet. The Company performed the recoverability test for these assets by comparing the estimated undiscounted future cash flows over the remaining useful life for its long-lived assets and right-of-use assets and determined that certain stores had long-lived and right-of-use assets with carrying values that exceeded their estimated undiscounted future cash flows for the remaining useful life of the respective assets.

The Company estimated fair values of these long-lived assets based on its discounted future cash flows for the remaining useful life of the asset or market rent assessments. The Company's analysis indicated that the carrying values of certain of its long-lived assets exceeded their respective fair values determined by the discounted future cash flow analysis or the market rent assessment. As a result, the Company recognized an impairment charge of $0.2 million forprior year. For the thirteen weeks ended October 31, 2020, with approximately $0.1 million for right-of-use operating lease assets and $0.1 million for fixed assets including leasehold improvements and fixtures, furniture and fixtures, and machinery and equipment.the Company recorded a reduction to expense of $0.3 million. For the thirty-nine weeks ended October 30, 2021 and October 31, 2020, the Company has recognized impairment charges totaling $7.0recorded a reduction of expense related to payroll reimbursements of $1.4 million with approximately $3.6and $3.3 million, respectively. The business and restart grants in the United Kingdom for right-of-use operating lease assetsbusinesses in the non-essential retail, hospitality and $3.4leisure sectors, were applied for on a per-property basis

to support businesses through the latest lockdown restrictions. The Company did not record income related to business or restart grants in the thirteen weeks ended October 30, 2021 and October 31, 2020. For the thirty-nine weeks ended October 30, 2021, the Company recorded $0.9 million for fixed assets including leasehold improvementsof business and fixtures, furniturerestart grants. This amount was recorded as "other income" within the Selling, general and fixtures, machinery and equipment, and construction-in-progress. These charges are recordedadministrative line in Store asset impairment within the Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) for the respective periods. These impairment charges were primarily driven by lower than projected revenues and the effect of temporary store closures as a result of the COVID-19 pandemic.. The majority of the impairment was recorded for assets associated with stores in North America. For the thirteen weeks ended November 2, 2019, the Company recorded 0 impairment charges anddid not record income related to business or restart grants for the thirty-nine weeks ended November 2, 2019October 31, 2020. 

Entertainment Production Costs

Costs of producing entertainment assets, which include direct costs, production overhead and development costs, are capitalized when incurred and are stated at the lower of cost, less accumulated amortization, or fair value. For film related costs, the Company expects assets to be monetized individually and will be amortized using the individual film-forecast-computation method which amortizes such costs in the same ratio that current period actual revenue bears to the estimated remaining unrecognized total revenues (ultimate revenue). Ultimate revenue includes estimates over a period not to exceed ten years from the date of initial release of the film. Participation costs and residuals are accrued and expensed over the applicable product life cycle based upon the ratio of the current period's revenues to the estimated remaining total revenues for each production.

Costs of entertainment productions are subject to recoverability assessments, which for content predominantly monetized individually, compare the estimated fair values with the unamortized cost, whenever events or changes in circumstances indicate that the fair value of the film may be less than the unamortized cost. The fair value is determined based on a discounted cash flow analysis of the cash flows directly attributable to the entertainment assets. The discounted cash flow analysis includes cash flow estimates of ultimate revenue as well as a discount rate (a Level 3 fair value measurement). The discount rate used in the Company’s discounted cash flow model will reflect the time value of money, expectations about variation in the amount or timing of the most likely cash flows, and the price market participants would seek for bearing the uncertainty inherent with the film asset. The amount by which the unamortized costs of entertainment assets exceed their estimated fair values are written off. As of October 30, 2021, January 30, 2021, and October 31, 2020, the Company had capitalized entertainment production costs of $0.8 million, $1.7 million, and $0.4 million, respectively. The October 30, 2021 balance for entertainment production costs is mostly comprised of several in-development entertainment projects.

In October 2021, the Company co-released the film Honey Girls and began recording film cost amortization. The Company does not have any history with this type of entertainment transaction, therefore the Company made a reasonable estimate of ultimate revenues for the film, and amortization of the film costs. The Company recorded impairments chargesan immaterial amount of $5.9 million on right-of-use assets into retained earningsnet revenue and film cost amortization for the thirteen weeks ended October 30, 2021 as "other income/expense" within the Selling, general and administrative line in the Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) and includes it in the financial information of the Commercial reportable segment presented in Note 11 - Segment Information. Additionally, as a result of the adoption of ASC 842, Leases.

The determination of estimated market rent used in the fair value estimatedelivery and release of the Company’s operating lease assets included withinfilm, the respective storeCompany recorded receivables totaling approximately $4.0 million during the third quarter stemming from a refundable Canadian Film Tax Credit and other contractually obligations. These receivables were recorded as a reduction to the film costs associated with the movie as they relate directly to previously capitalized expenses. The remaining net production entertainment asset group requires significant management judgment. Changes in these estimates could have a significant impact on whether long-lived store assets should be further evaluated for impairment and could have a significant impact onrelated the resulting impairment charge. The significant estimates, allHoney Girls film as of which are considered Level 3October 30, 2021 inputs, used in the fair value methodology include: the Company’s expectations for future operations and projected cash flows, including revenues, operating expenses including market rents, and market conditions.is immaterial.

2. Revenue

NearlyCurrently, nearly all the Company’s revenue is derived from retail sales (including from its e-commerce sites) and is recognized when control of the merchandise is transferred to the customer. The Company's disaggregated revenue is fully disclosed as net sales to external customers by reporting segment and by geographic area (See Note 11 — Segment Information for additional information). The Company's direct-to-consumer reporting segment represents 97%96% of consolidated revenue for the third quarter of fiscal 2020.2021. The majority of these sales transactions arewere single performance obligations that arewere recorded when control iswas transferred to the customer.

The following is a description of principal activities from which the Company generates its revenue, by reportable segment.

The Company’s direct-to-consumer segment includes the operating activities of corporately-managed stores, other retail-delivered operations and online sales. Direct-to-consumer revenue is recognized when control of the merchandise is transferred to the customer and for the Company's online sales, generally upon estimated delivery to the customer. Revenue is measured as the amount of consideration, including any discounts or incentives, the Company expects to receive in exchange for transferring the

merchandise. Product returns have historically averaged less than one-half of one percent due to the personalized and interactive

nature of sales, where consumers customize their own stuffed animal. The Company has elected to exclude from revenue all collected sales, value added and other taxes paid by its customers.

The Company’s international franchising segment includes the activities with franchisees who operate store locations in certain countries and includes development fees, sales-based royalties and merchandise, including supplies and fixture sales. The Company's obligations under the franchise agreements are ongoing and include operations and product development support and training, generally concentrated around newinitial store openings. These obligations are highly interrelated rights that are not distinct in the context of the contract and, therefore, have been accounted for as a single performance obligation and recognized as franchisee sales occur. If the contract includes an initial, one-time nonrefundable development fee, this fee is recognized on a straight-line basis over the term of the franchise agreement, which may extend for periods up to 25 years, or sooner if the agreement is terminated prior to the end of the term. The Company classifies these initial, one-time nonrefundable franchise fee contract liabilities as deferred revenue on theits consolidated balance sheet. Revenue from merchandise and fixture sales is recognized when control is transferred to the franchisee which generally occurs upon delivery to the customer.delivery.

The Company also incurs expenses directly related to the startup of new franchises, which may include finder’s fees, legal and travel costs, expenses related to its ongoing support of the franchiseesfranchises and employee compensation. Accordingly, the Company’s policy is to capitalize any finder’s fee, an incremental cost, and expense all other costs as incurred. Additionally, the Company amortizes these capitalized costs into expense in the same pattern as the development fee's recording of revenue as described previously.

3. Leases

The majority of the Company's leases relate to retail stores and corporate offices. For leases with terms greater than 12 months, the Company records the related asset and obligation at the present value of lease payments over the term. Most new retail store leases have an original term of a five to ten-year base period and may include renewal options to extend the lease term beyond the initial base period andperiod. The extension periods are typically much shorter than the original lease term giving the CompanyCompany's strategic decision to maintain a high level of lease optionality. Some leases also include early termination options, which can be exercised under specific conditions. Additionally, the Company may operate stores for a period of time on a month-to-month basis after the expiration of the lease term. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. Additionally, certain leases contain incentives, such as construction allowances from landlords and/or rent abatements subsequent to taking possession of the leased property.

The table below presents certain information related to the lease costs for operating leases for the thirteen and thirty-nine weeks ended October 31, 202030, 2021 and November 2, 2019October 31, 2020 (in thousands).

Other information

The table below presents supplemental cash flow information related to leases for the thirteen and thirty-nine weeks ended October 31, 202030, 2021 and November 2, 2019October 31, 2020 (in thousands).

Operating cash flow for operating leases for the third quarter and year-to-date fiscal 2021 exceeded expense recorded for the same periods, which is expected to continue for the remainder of fiscal 2021, as the Company's deferred rent obligations obtained during rent negotiations in fiscal 2020 are to be paid during fiscal 2021. The Company has approximately $0.7 million remaining of rent deferrals to be paid in the remainder of fiscal 2021, whose liability is recorded in the Operating lease liability short term line of the Condensed Consolidated Balance Sheet.

As of October 31, 202030, 2021 and November 2, 2019October 31, 2020, the weighted-average remaining operating lease term was 5.04.5 years and 5.85.0 years, respectively, and the weighted-average discount rate was 6.0% and 5.9%6.0%, respectively, for operating leases recognized on the Company's Condensed Consolidated Balance Sheets.

As discussed above,For the thirteen and thirty-nine weeks ended October 30, 2021, the Company incurreddid not incur impairment charges duringagainst its right-of-use operating lease assets. For the thirteen and thirty-nine weeks ended October 31, 2020, the Company incurred right-of-use asset impairment charges of $0.1 million and $3.6 million, respectively, against right-of-use operating lease assets.

During the second and third quarters, the Company renegotiated a large portion of its store lease portfolio resulting in a combination of rent reductions, deferments, and abatements in North America and the United Kingdom and Ireland. These negotiations have increased the percentage of leases with variable rent structures resulting in the increase in variable rent expense for the thirteen weeks ended October 31, 2020 compared to thirteen weeks ended November 2, 2019. For these renegotiated leases, under ASC 842 Leases, the Company assessed if the renegotiated leases represented a new, separate contract or a modification of the existing lease. The Company concluded all renegotiated leases represented a modification of terms of each existing agreement. As such, the Company remeasured the lease liability and decreased the carrying amount of the right-of-use asset in proportion to the modification of the existing lease and recognized in profit or loss any difference between the reduction in the lease liability and the reduction in the right-of-us asset, which had an immaterial impact on the second quarter results. The Company remains in negotiations with certain landlords for those stores not already renegotiated and expects further rent reductions, deferments or abatements to be recognized in the fourth quarter of the current fiscal year.respectively.

Undiscounted cash flows

The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating lease liabilities recorded on the balance sheet (in thousands).

As of October 31, 202030, 2021, the Company had an additional executed leaseleases that had not yet commenced with operating lease liabilities of $1.3$1.5 million. This lease isThese leases are expected to commence in the fourth quarter of fiscal 2021 with a lease term ofterms ranging from five to ten years.

4. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following (in thousands):

Other non-current assets consist of the following (in thousands):

5. Accrued Expenses

Accrued expenses consist of the following (in thousands):

6. Stock-based Compensation

On April 14, 2020, the Board of Directors (the “Board”) of Build-A-Bear Workshop, Inc. (the “Company”) adopted, subject to stockholder approval, the Build-A-Bear Workshop, Inc. 2020 Omnibus Incentive Plan (the “2020 Incentive Plan”). On June 11, 2020, at the Company’s 2020 Annual Meeting of Stockholders (the “Annual Meeting”), the Company’s stockholders approved the 2020 Incentive Plan. The 2020 Incentive Plan, which is administered by the Compensation and Development

Committee of the Board (the "Compensation Committee"), permits the grant of stock options (including both incentive and non-qualified stock options), stock appreciation rights, other stock-based awards, including restricted stock and restricted stock units, cash-based awards, and performance awards pursuant to the terms of the 2020 Incentive Plan. The 2020 Incentive Plan will terminate on April 14, 2030, unless terminated earlier terminated by the Board. The number of shares of the Company’s common stock authorized for issuance under the 2020 Incentive Plan is 1,000,000, plus shares of stock that remained available for issuance under the Build-A-Bear Workshop, Inc. 2017 Omnibus Incentive Plan (the “2017 Incentive Plan”) at the time the 2020 Incentive Plan was approved by the Company’s stockholders, and shares that are subject to outstanding awards made under the 2017 Incentive Plan that on or after April 14, 2020 may be forfeited, expire or be settled for cash.

For the thirteen weeks ended October 31, 202030, 2021 and November 2, 2019October 31, 2020, Selling, general and administrative expense included $0.5 million and $0.4 million, respectively, of stock-based compensation expense of $0.6 million and for$0.5 million, respectively. For the thirty-nine weeks ended October 31, 202030, 2021 and November 2, 2019October 31, 2020, Selling, general and administrative expense included $1.3stock-based compensation expense of $2.1 million and $1.8$1.3 million, respectively. As of October 31, 202030, 2021, there was $2.8$3.0 million of total unrecognized compensation expense related to unvested restricted stock and option awards which is expected to be recognized over a weighted-average period of 1.31.4 years.

The following table is a summary of the balances and activity for stock options for the thirty-nine weeks ended October 31, 202030, 2021:

The following table is a summary of the balances and activity related to time-based and performance-based restricted stock for the thirty-nine weeks ended October 31, 202030, 2021:

The total fair value of shares vested during the thirty-nine weeks ended October 31, 202030, 2021 and November 2, 2019October 31, 2020 was $2.3$2.2 million and $2.1$2.3 million, respectively.

In

The outstanding performance shares as of October 31, 202030, 2021 consist of the following:

7. Income Taxes

The Company's effective tax rate was 25.1% and 24.3% for the thirteen and thirty-nine weeks ended October 30, 2021 compared to 0.6% and -8.0%(8)% for the thirteen and thirty-nine weeks ended October 31, 2020, respectively, compared to 23.7% and 2.1% for the thirteen and thirty-nine weeks ended November 2, 2019, respectively.. The 20202021 effective tax rate differed from the statutory rate of 21% primarily due to nostate income tax expense or benefit being recorded onpartially offset by the current quarter's pretax income ortax impact of equity awards vesting. While the year-to-date pretax loss asCompany is still in a full valuation allowance has beenglobally, it recorded globally.  In addition,tax expense on the pretax income earned in the first thirty-nine weeks of fiscal 2021 based on its projected current tax expense. The firstthirty-nine weeks of fiscal 2020 waswere impacted by thea $3.3 million valuation allowance recorded on the beginning balance of the net deferred tax assets in certain jurisdictions.  Thejurisdictions, offset by $0.8 million of benefit as a result of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. In addition, 2019no effective tax rate differed frombenefit was recorded on the statutory rateyear-to-date pretax loss for the firstthirty-nine weeks of 21% primarily due to thefiscal 2020 as a full valuation allowance beingwas recorded in certain foreign loss companies and the $0.2 million tax impactglobally.

8. Stockholders’ Equity

The following table sets forth the changes in stockholders’ equity (in thousands) for the thirteen weeks ended October 31, 202030, 2021 and November 2, 2019October 31, 2020 (in thousands):

(1) - Additional paid-in capital (“APIC”)

(2) - Accumulated other comprehensive income (loss) (“AOCI”)

The following table sets forth the changes in stockholders’ equity (in thousands) for the thirty-nine weeks ended October 31, 202030, 2021 and November 2, 2019October 31, 2020 (in thousands):

(1) - Additional paid-in capital (“APIC”)

(2) - Accumulated other comprehensive income (loss) (“AOCI”)

In August 2017, the Company’s Board of Directors authorized a share repurchase program of up to $20.0 million. From the date of such authorization through the program expiration on September 30, 2020, the Company had repurchased approximately 1.3 million shares at an average price of $8.75 per share for an aggregate amount of approximately $11.2 million. The Company does not plan to utilize cash to resume share repurchases in fiscal 2020. In addition, the Company's ability to repurchase shares is limited by conditions set forth by its lender in its credit agreement, as described below.

9. Income per Share

The following table sets forth the computation of basic and diluted net income/(loss) per share (in thousands, except share and per share data):

In calculating the diluted income per share for the thirteen and thirty-nine weeks ended October 31, 202030, 2021, options to purchase 822,36052,812 and 849,351242,445 shares of common stock, respectively, that were outstanding at the end of the period were not included in the computation of diluted income per share due to their anti-dilutive effect. For the thirteen and thirty-nine weeks ended November 2, 2019October 31, 2020, options to purchase 923,715822,360 and 928,236849,351 shares of common stock, respectively, that were outstanding at the end of the period were not included in the computation of diluted income per share due to their anti-dilutive effect.

10. Comprehensive Income (Loss)

The difference between comprehensive income or loss and net income or loss is the result of foreign currency translation adjustments on the balance sheets of subsidiaries whose functional currency is not the U.S. Dollar. The accumulated other comprehensive income (loss) balance at October 31, 202030, 2021 and November 2, 2019October 31, 2020 was comprised entirely of foreign currency translation. For the thirteen weeks ended October 31, 202030, 2021 and November 2, 2019October 31, 2020, the Company had 0 reclassifications out of accumulated other comprehensive income (loss).

11. Segment Information 

The Company’s operations are conducted through three operating segments consisting of direct-to-consumer (“DTC”), commercial and international franchising. The DTC segment includes the operating activities of corporately-managed locations and other retail delivery operations in the U.S.United States (U.S.), Canada, China, Denmark, Ireland and the United Kingdom (“U.K.”), including the Company’s e-commerce sites and temporary stores. The commercial segment includes the Company’s transactions with other businesses, mainly comprised of licensing the Company’s intellectual properties for third party-party use and wholesale activities. The international franchising segment includes the licensing activities of the Company’s franchise agreements with store locations in Asia, Australia, Mexico, the Middle East, Africa, and South America. The operating segments have discrete sources of revenue, different capital structures and different cost structures. These operating segments represent the basis on which the Company’s chief operating decision maker regularly evaluates the business in assessing performance, determining the allocation of resources and the pursuit of future growth opportunities. Accordingly, the Company has determined that each of its operating segments represent a reportable segment. The three reportable segments follow the same accounting policies used for the Company’s consolidated financial statements.

Following is a summary of the financial information for the Company’s reportable segments (in thousands):