Company to Receive $45 Million of New Equity
Capital Through Rights Offering and Backstop Transaction
Company to Receive Additional $50 Million of
New Equity Capital Through Concurrent Private Investment
Barnes & Noble Education, Inc. (NYSE: BNED) (“BNED” or the
“Company”), a leading solutions provider for the education
industry, today announced the results of its fully backstopped $45
million equity rights offering (the “Rights Offering”). The Rights
Offering expired at 5:00 P.M. Eastern Time, on June 5, 2024, and
the subscription rights are no longer exercisable. The Rights
Offering resulted in subscriptions for approximately 641,995,541
shares, or 71%, of the 900,000,000 shares offered at a subscription
price of $0.05 per share (the “Subscription Price”). The shares of
Common Stock subscribed for are expected to be issued to
participating stockholders on or about June 10, 2024.
As previously disclosed, the Company entered into an agreement
with Immersion Corporation (NASDAQ: IMMR) (“Immersion”), and
certain of the Company’s existing stockholders (collectively, the
“Standby Purchasers”), through which the Standby Purchasers will
collectively purchase, at the Subscription Price, any subscription
rights that remain unexercised upon the expiration of the Rights
Offering after accounting for all over-subscription rights
exercised (the “Unexercised Shares”), up to $45 million in shares
of Common Stock not subscribed for by the Company’s stockholders
(the “Backstop Commitment”). Pursuant to the Backstop Commitment,
the Standby Purchasers will purchase 258,004,459 Unexercised Shares
for an aggregate purchase price of approximately $12.9 million (the
“Backstop Transaction”). In addition, investors led by Immersion,
have agreed through a private investment to purchase an aggregate
of $50 million in shares of the Company’s Common Stock, at the
Subscription Price, in a private placement exempt from the
registration requirements under the Securities Act of 1933, as
amended (the “Private Investment”).
The Rights Offering, Backstop Transaction, and Private
Investment are part of the Company’s previously announced
transactions (the “Transactions”), which also includes the
conversion of approximately $34 million of second lien debt to
equity, and the refinancing of its existing ABL facility. The
Transactions are expected to close on or around June 10, 2024.
The Company intends to use the net proceeds from the Rights
Offering and Backstop Transaction to reduce the balance under the
Company’s ABL Facility and pay expenses in connection with the
Transactions.
The Rights Offering was made pursuant to the Company’s
registration statement on Form S-1 (File No. 333-278799), which was
declared effective on May 14, 2024. This press release does not
constitute an offer to sell or the solicitation of an offer to buy
any securities, nor shall there be any offer, solicitation or sale
of any securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful.
About Barnes & Noble Education, Inc.
Barnes & Noble Education, Inc. (NYSE: BNED) is a leading
solutions provider for the education industry, driving
affordability, access and achievement at hundreds of academic
institutions nationwide and ensuring millions of students are
equipped for success in the classroom and beyond. Through its
family of brands, BNED offers campus retail services and academic
solutions, wholesale capabilities and more. BNED is a company
serving all who work to elevate their lives through education,
supporting students, faculty and institutions as they make tomorrow
a better, more inclusive and smarter world. For more information,
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 us and our business that are
based on the beliefs of our management as well as assumptions made
by and information currently available to our management. When used
in this communication, the words “anticipate,” “believe,”
“estimate,” “expect,” “intend,” “plan,” “will,” “forecasts,”
“projections,” and similar expressions, as they relate to us or our
management, identify forward-looking statements. Moreover, we
operate in a very competitive and rapidly changing environment. New
risks emerge from time to time. It is not possible for our
management to predict all risks, nor can we assess the impact of
all factors on our 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
we 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 our current
views with respect to future events, the outcome of which is
subject to certain risks, including, among others: the completion,
timing, size and use of proceeds of the Transactions, including the
Rights Offering, the Backstop Transaction, and the Private
Investment; the amount of our indebtedness and ability to comply
with covenants applicable to current and/or any future debt
financing; our ability to satisfy future capital and liquidity
requirements; our ability to continue as a going concern; our
ability to access the credit and capital markets at the times and
in the amounts needed and on acceptable terms; our ability to
maintain adequate liquidity levels to support ongoing inventory
purchases and related vendor payments in a timely manner; our
ability to attract and retain employees; the pace of equitable and
inclusive access adoption in the marketplace is slower than
anticipated and our ability to successfully convert the majority of
our institutions to our BNC First Day® equitable and inclusive
access course material models or successfully compete with third
parties that provide similar equitable and inclusive access
solutions; the United States Department of Education has recently
proposed regulatory changes that, if adopted as proposed, could
impact equitable and inclusive access models across the higher
education industry; the strategic objectives, successful
integration, anticipated synergies, and/or other expected potential
benefits of various strategic and restructuring initiative, may not
be fully realized or may take longer than expected; dependency on
strategic service provider relationships, such as with VitalSource
Technologies, Inc. and the Fanatics Retail Group Fulfillment, LLC
(“Fanatics”) and Fanatics Lids College, Inc. D/B/A "Lids" (“Lids”),
and the potential for adverse operational and financial changes to
these strategic service provider relationships, may adversely
impact our business; non-renewal of managed bookstore, physical
and/or online store contracts and higher-than-anticipated store
closings; decisions by K-12 schools, colleges and universities to
outsource their physical and/or online bookstore operations or
change the operation of their bookstores; general competitive
conditions, including actions our competitors and content providers
may take to grow their businesses; the risk of changes in price or
in formats of course materials by publishers, which could
negatively impact revenues and margin; changes to purchase or
rental terms, payment terms, return policies, the discount or
margin on products or other terms with our suppliers; product
shortages, including decreases in the used textbook inventory
supply associated with the implementation of publishers’ digital
offerings and direct to student textbook consignment rental
programs; work stoppages or increases in labor costs; possible
increases in shipping rates or interruptions in shipping services;
a decline in college enrollment or decreased funding available for
students; decreased consumer demand for our products, low growth or
declining sales; the general economic environment and consumer
spending patterns; trends and challenges to our business and in the
locations in which we have stores; risks associated with operation
or performance of MBS Textbook Exchange, LLC’s point-of-sales
systems that are sold to college bookstore customers; technological
changes, including the adoption of artificial intelligence
technologies for educational content; risks associated with
counterfeit and piracy of digital and print materials; risks
associated with the potential loss of control over personal
information; risks associated with the potential misappropriation
of our intellectual property; disruptions to our information
technology systems, infrastructure, data, supplier systems, and
customer ordering and payment systems due to computer malware,
viruses, hacking and phishing attacks, resulting in harm to our
business and results of operations; disruption of or interference
with third party service providers and our own proprietary
technology; risks associated with the impact that public health
crises, epidemics, and pandemics, such as the COVID-19 pandemic,
have on the overall demand for BNED products and services, our
operations, the operations of our suppliers, service providers, and
campus partners, and the effectiveness of our response to these
risks; lingering impacts that public health crises may have on the
ability of our suppliers to manufacture or source products,
particularly from outside of the United States; changes in
applicable domestic and international laws, rules or regulations,
including, without limitation, U.S. tax reform, changes in tax
rates, laws and regulations, as well as related guidance; changes
in and enactment of applicable laws, rules or regulations or
changes in enforcement practices including, without limitation,
with regard to consumer data privacy rights, which may restrict or
prohibit our use of consumer personal information for texts,
emails, interest based online advertising, or similar marketing and
sales activities; adverse results from litigation, governmental
investigations, tax-related proceedings, or audits; changes in
accounting standards; and the other risks and uncertainties
detailed in the section titled “Risk Factors” in Part I - Item 1A
in our Annual Report on Form 10-K for the fiscal year ended April
29, 2023 and in Part II – Item 1A in our Quarterly Reports on Form
10-Q. 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 us or persons acting on our behalf are expressly qualified in
their entirety by the cautionary statements in this paragraph. We
undertake 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: https://www.businesswire.com/news/home/20240606204986/en/
BNED – Media and Investors Hunter Blankenbaker Vice
President – Corporate Communications and Investor Relations (908)
991-2776 hblankenbaker@bned.com
Grafico Azioni Barnes and Noble Education (NYSE:BNED)
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