Sales increase 5.9% to $239 million
Comparable Sales Increase 1.8%
BASKING RIDGE, N.J.--(BUSINESS WIRE)--
Barnes & Noble Education, Inc. (NYSE: BNED) today reported
sales and earnings for its fiscal 2016 first quarter ended August 1st,
2015. First quarter sales of $239.0 million increased $13.3 million, or
5.9%, as compared to the prior year. The Company reported, on a
carve-out basis since it was still part of Barnes & Noble, Inc.
(NYSE:BKS), a net loss of $26.9 million which is $0.7 million higher
than the prior year for this non-rush, seasonal low quarter.
As previously disclosed, the Company became a separate public company on
August 2nd, 2015, after Barnes & Noble, Inc. completed the
separation of its Retail and College businesses. "By completing the
separation from Barnes & Noble Inc., we believe we are well positioned
to take advantage of future growth opportunities and enhance our
services for our current and future customers," said Max J. Roberts,
Chief Executive Officer, Barnes & Noble Education, Inc.
"We are pleased with the performance of our business," continued Mr.
Roberts. "Comparable sales increased 1.8% during a non-rush period with
strong contributions from general merchandise sales which increased 7.3%
for the quarter. We continue to win new contracts, opening 21 new stores
with estimated annual sales of $45.0 million in the first quarter of
2016. Students have returned to campus and our stores are well
positioned with a complete selection of print and digital course
materials along with an exciting assortment of school branded collegiate
and athletic apparel and gifts, computer and technology related
products, as well as, school supplies and convenience items. Our stores,
along with our e-commerce sites, deliver convenience, choice and value
offering both print and digital products, for sale or for rent, with
digital products seamlessly delivered through our Yuzu® platform.
We are seeing strong customer engagement in our stores and across all
our digital channels, cementing the campus bookstore as the student's
first choice."
The Company's EBITDA loss increased to $35.2 million, as compared to
$34.0 million in the prior year, due primarily to higher expenses
associated with new store growth in the non-rush first quarter and
continued investments in digital education.
First Quarter 2016 Results from Operations
Results for the fiscal 2016 and fiscal 2015 first quarters are as
follows:
|
|
|
|
|
|
|
Revenues (unaudited)
|
|
$ in millions
|
|
|
|
|
|
|
|
Increase/(Decrease)
|
|
|
|
Q1 2016
|
|
|
Q1 2015
|
|
|
$
|
|
|
%
|
|
Product sales and other
|
|
$218.7 |
|
|
$206.2 |
|
|
$12.5 |
|
|
6.1%
|
|
Rental Income
|
|
$20.3 |
|
|
$19.5 |
|
|
$0.8 |
|
|
4.1%
|
|
Total
|
|
$239.0 |
|
|
$225.7 |
|
|
$13.3 |
|
|
5.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA(1) (unaudited)
|
|
|
|
|
|
|
|
|
|
Increase/(Decrease)
|
|
|
|
Q1 2016
|
|
|
Q1 2015
|
|
|
$
|
|
|
%
|
|
EBITDA
|
|
($35.2)
|
|
|
($34.0)
|
|
|
($1.2)
|
|
|
3.5%
|
|
|
|
(1) This non-GAAP financial measure has been reconciled in the
attached schedules to the most directly comparable GAAP measure as
required under SEC rules regarding the use of non-GAAP financial
measures.
|
Net Results
First quarter net loss was $26.9 million, or $0.65 per share, compared
to a net loss of $26.2 million, or $0.71 per share, in the prior year.
Outlook
For fiscal year 2016, the Company continues to expect comparable store
sales to increase by 1%, and capital expenditures to be approximately
$55 million.
Conference Call
A conference call with Barnes & Noble Education, Inc.'s senior
management will be webcast at 11:30 a.m. Eastern Time on Wednesday,
September 9, and can be accessed at Barnes & Noble Education, Inc.'s
corporate website at www.bned.com.
Barnes & Noble Education, Inc. will report fiscal 2016 second quarter
results on or about December 8th, 2015.
EXPLANATORY NOTE
On February 26, 2015, Barnes & Noble, Inc. ("Barnes & Noble") announced
plans for the complete legal and structural separation of Barnes & Noble
Education, Inc. (the "Company") from Barnes & Noble (the "Spin-Off").
Under the Separation and Distribution Agreement between Barnes & Noble
and the Company, Barnes & Noble planned to distribute all of its equity
interest in us, consisting of all of the outstanding shares of our
Common Stock, to Barnes & Noble's stockholders on a pro rata basis.
Following the Spin-Off, Barnes & Noble would not own any equity interest
in us, and we would operate independently from Barnes & Noble.
On July 14, 2015, Barnes & Noble approved the final distribution ratio
and declared a pro rata dividend of the outstanding shares of our Common
Stock, par value $0.01 per share ("Common Stock"), to Barnes & Noble's
existing stockholders. The pro rata dividend was made on August 2, 2015
to the Barnes & Noble stockholders of record (as of July 27, 2015). Each
Barnes & Noble stockholder of record received a distribution of 0.632
shares of our Common Stock for each share of Barnes & Noble common stock
held on the record date.
On August 2, 2015, we completed the legal separation from Barnes &
Noble, at which time we began to operate as an independent
publicly-traded company. Our Common Stock began to trade on a
"when-issued" basis on the NYSE under the symbol "BNED WI" beginning on
July 23, 2015. On August 3, 2015, when-issued trading of our Common
Stock ended, our Common Stock began "regular-way" trading under the
symbol "BNED."
Since the consummation of the Spin-Off occurred after the end of the
August 1, 2015 quarter covered by this release, this release reflects
the results of the Company for periods prior to the completion of the
Spin-Off.
|
BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
|
|
Consolidated Statements of Operations
|
|
(In thousands, except per share data)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 weeks ended
|
|
13 weeks ended
|
|
|
August 1, 2015
|
|
August 2, 2014
|
|
|
|
|
|
|
Sales:
|
|
|
|
|
Product sales and other
|
$
|
218,716
|
|
|
$
|
206,188
|
|
|
Rental income
|
|
20,267
|
|
|
|
19,553
|
|
|
Total sales
|
|
238,983
|
|
|
|
225,741
|
|
|
Cost of sales and occupancy:
|
|
|
|
|
Product and other cost of sales and occupancy
|
|
174,909
|
|
|
|
166,053
|
|
|
Rental cost of sales and occupancy
|
|
12,530
|
|
|
|
12,378
|
|
|
Total cost of sales and occupancy
|
|
187,439
|
|
|
|
178,431
|
|
|
Gross profit
|
|
51,544
|
|
|
|
47,310
|
|
|
Selling and administrative expenses
|
|
86,684
|
|
|
|
81,272
|
|
|
Depreciation and amortization
|
|
13,100
|
|
|
|
12,544
|
|
|
Operating loss
|
|
(48,240
|
)
|
|
|
(46,506
|
)
|
|
Interest expense, net
|
|
3
|
|
|
|
5
|
|
|
Loss before income taxes
|
|
(48,243
|
)
|
|
|
(46,511
|
)
|
|
Income tax benefit
|
|
(21,325
|
)
|
|
|
(20,298
|
)
|
|
Net loss
|
$
|
(26,918
|
)
|
|
$
|
(26,213
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Loss per common share:
|
|
|
|
|
Basic
|
$
|
(0.65
|
)
|
|
$
|
(0.71
|
)
|
|
Diluted
|
$
|
(0.65
|
)
|
|
$
|
(0.71
|
)
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
Basic
|
|
41,426
|
|
|
|
37,437
|
|
|
Diluted
|
|
41,426
|
|
|
|
37,437
|
|
|
|
|
|
|
|
Percentage of sales:
|
|
|
|
|
Sales:
|
|
|
|
|
Product sales and other
|
|
91.5
|
%
|
|
|
91.3
|
%
|
|
Rental income
|
|
8.5
|
%
|
|
|
8.7
|
%
|
|
Total sales
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
Cost of sales and occupancy:
|
|
|
|
|
Product and other cost of sales and occupancy (a) |
|
80.0
|
%
|
|
|
80.5
|
%
|
|
Rental cost of sales and occupancy (a) |
|
61.8
|
%
|
|
|
63.3
|
%
|
|
Total cost of sales and occupancy
|
|
78.4
|
%
|
|
|
79.0
|
%
|
|
Gross profit
|
|
21.6
|
%
|
|
|
21.0
|
%
|
|
Selling and administrative expenses
|
|
36.3
|
%
|
|
|
36.0
|
%
|
|
Depreciation and amortization
|
|
5.5
|
%
|
|
|
5.6
|
%
|
|
Operating loss
|
|
(20.2
|
)%
|
|
|
(20.6
|
)%
|
|
Interest expense, net
|
|
0.0
|
%
|
|
|
0.0
|
%
|
|
Loss before income taxes
|
|
(20.2
|
)%
|
|
|
(20.6
|
)%
|
|
Income tax benefit
|
|
(8.9
|
)%
|
|
|
(9.0
|
)%
|
|
Net loss
|
|
(11.3
|
)%
|
|
|
(11.6
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
(a) Represents the percentage these costs bear to the related sales,
instead of total sales.
|
|
|
|
|
|
|
|
BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
|
|
Consolidated Balance Sheets
|
|
(In thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
August 1, 2015
|
|
August 2, 2014
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
$
|
16,029
|
|
$
|
45,803
|
|
Receivables, net
|
|
35,461
|
|
|
32,032
|
|
Merchandise inventories, net
|
|
766,767
|
|
|
695,040
|
|
Textbook rental inventories
|
|
7,640
|
|
|
7,438
|
|
Prepaid expenses and other current assets
|
|
7,623
|
|
|
5,629
|
|
Short-term deferred tax assets, net
|
|
23,265
|
|
|
21,816
|
|
Total current assets
|
|
856,785
|
|
|
807,758
|
|
|
|
|
|
|
Property and equipment:
|
|
|
|
|
Buildings and leasehold improvements
|
|
154,524
|
|
|
137,753
|
|
Fixtures and equipment
|
|
341,708
|
|
|
318,389
|
|
|
|
496,232
|
|
|
456,142
|
|
Less accumulated depreciation and amortization
|
|
387,449
|
|
|
357,258
|
|
Net property and equipment
|
|
108,783
|
|
|
98,884
|
|
|
|
|
|
|
Goodwill
|
|
274,070
|
|
|
274,070
|
|
Intangible assets, net
|
|
195,627
|
|
|
205,878
|
|
Other noncurrent assets
|
|
44,738
|
|
|
34,233
|
|
Total assets
|
$
|
1,480,003
|
|
$
|
1,420,823
|
|
|
|
|
|
|
LIABILITIES AND PARENT COMPANY EQUITY
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
$
|
603,928
|
|
$
|
538,028
|
|
Accrued liabilities
|
|
61,647
|
|
|
67,268
|
|
Total current liabilities
|
|
665,575
|
|
|
605,296
|
|
|
|
|
|
|
Long-term deferred taxes, net
|
|
73,037
|
|
|
80,584
|
|
Other long-term liabilities
|
|
69,555
|
|
|
61,164
|
|
|
|
|
|
|
Preferred Member Interests
|
|
-
|
|
|
383,839
|
|
|
|
|
|
|
Parent company investment
|
|
671,836
|
|
|
289,940
|
|
Commitments and contingencies
|
|
-
|
|
|
-
|
|
Total liabilities and Parent Company equity
|
$
|
1,480,003
|
|
$
|
1,420,823
|
|
|
|
|
|
|
|
|
BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
|
|
EBITDA (Non-GAAP) Information
|
|
(In thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 weeks ended
|
|
13 weeks ended
|
|
|
|
|
|
August 1, 2015
|
|
August 2, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
|
$
|
(35,140
|
)
|
|
$
|
(33,962
|
)
|
|
Subtract:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
13,100
|
|
|
|
12,544
|
|
|
|
Interest expense, net
|
|
|
|
3
|
|
|
|
5
|
|
|
|
Income taxes
|
|
|
|
(21,325
|
)
|
|
|
(20,298
|
)
|
|
Net loss
|
|
|
|
$
|
(26,918
|
)
|
|
$
|
(26,213
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
|
|
Earnings (Loss) Per Share
|
|
(In thousands, except per share data)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 weeks ended
|
|
14 weeks ended
|
|
|
|
August 1, 2015
|
|
August 2, 2014
|
|
Numerator for basic loss per share:
|
|
|
|
|
|
Net loss
|
|
$
|
(26,918
|
)
|
|
$
|
(26,213
|
)
|
|
Accretion of dividends on preferred stock
|
|
|
-
|
|
|
|
(443
|
)
|
|
Net loss available to common shareholders
|
|
$
|
(26,918
|
)
|
|
$
|
(26,656
|
)
|
|
|
|
|
|
|
|
Numerator for diluted loss per share:
|
|
|
|
|
|
Net loss available to common shareholders
|
|
$
|
(26,918
|
)
|
|
$
|
(26,656
|
)
|
|
|
|
|
|
|
|
Denominator for basic and diluted loss per share:
|
|
|
|
|
|
Basic weighted average common shares (a) |
|
|
41,426
|
|
|
|
37,437
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per common share:
|
|
|
|
|
|
Basic
|
|
$
|
(0.65
|
)
|
|
$
|
(0.71
|
)
|
|
Diluted
|
|
$
|
(0.65
|
)
|
|
$
|
(0.71
|
)
|
|
|
|
|
|
|
|
(a) Basic earnings per share and weighted-average basic shares
outstanding are based on the number of shares of Barnes & Noble
common stock outstanding as of the end of the period, adjusted for
an assumed distribution ratio of 0.632 shares of our Common Stock
for every one share of Barnes & Noble common stock held on the
record date for the Spin-Off.
|
|
|
About Barnes & Noble Education, Inc.
Barnes & Noble Education, Inc. (NYSE: BNED) enhances the academic and
social purpose of educational institutions. Through its Barnes & Noble
College subsidiary, Barnes & Noble Education serves more than 5 million
college students and their faculty through its 736 stores on campuses
nationwide, delivering essential educational content and tools within a
dynamic retail environment. The company is at the forefront of digital
education with its digital education platform, Yuzu®, weaving together
digital learning materials to enhance the teaching and learning
experience. Barnes & Noble Education acts as a strategic partner to
drive student success; provide value and support to students and
faculty; and create loyalty and retention, all while supporting the
financial goals of college and university partners.
General information on Barnes & Noble Education, Inc. can be obtained by
visiting the Company's corporate website: www.bned.com.
Forward-Looking Statements
This press release contains certain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995 and
information relating to Barnes & Noble Education and its business that
are based on the beliefs of the management of Barnes & Noble Education
as well as assumptions made by and information currently available to
the management of Barnes & Noble Education. When used in this
communication, the words "anticipate," "believe," "estimate," "expect,"
"intend," "plan," "will," "forecasts," "projections," and similar
expressions, as they relate to Barnes & Noble Education or the
management of Barnes & Noble Education, identify forward-looking
statements. Moreover, Barnes & Noble Education operates in a very
competitive and rapidly changing environment. New risks emerge from time
to time. It is not possible for the management of Barnes & Noble
Education to predict all risks, nor can Barnes & Noble Education assess
the impact of all factors on its business or the extent to which any
factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements Barnes
& Noble Education may make. In light of these risks, uncertainties and
assumptions, the future events and trends discussed in this press
release may not occur and actual results could differ materially and
adversely from those anticipated or implied in the forward-looking
statements.
Such statements reflect the current views of Barnes & Noble Education
with respect to future events, the outcome of which is subject to
certain risks, including, among others: challenges to running Barnes &
Noble Education independently from Barnes & Noble, Inc. ("Barnes &
Noble") now that the complete legal and structural separation of Barnes
& Noble Education from Barnes & Noble (the "Spin-Off") has been
completed; general competitive conditions, including actions Barnes &
Noble Education's competitors may take to grow their businesses; trends
and challenges to Barnes & Noble Education's business and in the
locations in which it has stores; decisions by colleges and universities
to outsource their bookstore operations or change the operation of their
bookstores; non-renewal of contracts; the general economic environment,
college enrollment and consumer spending patterns, including decreases
in university spending; decreased consumer demand for Barnes & Noble
Education's products, low growth or declining sales; disruptions to
Barnes & Noble Education's computer systems, data lines, telephone
systems or supply chain, including the loss of suppliers; changes to
payment terms, return policies, the discount or margin on products or
other terms with Barnes & Noble Education's suppliers; risks associated
with data privacy, information security and intellectual property; work
stoppages or increases in labor costs; Barnes & Noble Education's
ability to attract and retain employees; possible increases in shipping
rates or interruptions in shipping service, effects of competition;
obsolete or excessive inventory; product shortages; Barnes & Noble
Education's ability to successfully implement its strategic initiatives;
the performance of Barnes & Noble Education's online, digital and other
initiatives, including possible delays in the deployment of, and further
enhancements to, Yuzu® and any future higher education digital products;
technological changes; risk that digital sales growth is less than
expectations and the risk that it does not exceed the rate of investment
spend; higher-than-anticipated store closings; changes in law or
regulation; the amount of Barnes & Noble Education's indebtedness and
ability to comply with covenants applicable to any future debt
financing; Barnes & Noble Education's ability to satisfy future capital
and liquidity requirements; Barnes & Noble Education's ability to access
the credit and capital markets at the times and in the amounts needed
and on acceptable terms; adverse results from litigation, governmental
investigations or tax-related proceedings or audits; changes in
accounting standards; the potential adverse impact on Barnes & Noble
Education's business resulting from the Spin-Off; and the other risks
and uncertainties detailed in the section titled "Risk Factors" in
Barnes & Noble Education's Prospectus filed with the Securities and
Exchange Commission ("SEC") on July 15, 2015 and in Barnes & Noble
Education's other filings made hereafter from time to time with the SEC.
Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results or
outcomes may vary materially from those described as anticipated,
believed, estimated, expected, intended or planned. Subsequent written
and oral forward-looking statements attributable to Barnes & Noble
Education or persons acting on its behalf are expressly qualified in
their entirety by the cautionary statements in this paragraph. Barnes &
Noble Education undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information,
future events or otherwise after the date of this press release.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150909005538/en/
Media:
Barnes & Noble
Education, Inc.
Carolyn Brown, 908-991-2967
Vice President
Corporate
Communications
cbrown@bned.com
or
Investors:
Thomas
Donohue, 908-991-2966
Vice President
Treasurer and Investor
Relations
tdonohue@bned.com
Source: Barnes & Noble Education, Inc.
News Provided by Acquire Media