Milestone Transactions Completed in June 2024
Significantly Strengthen Balance Sheet
Focused on Driving Improved Profitability &
Long-Term Shareholder Returns
Barnes & Noble Education, Inc. (NYSE: BNED), a
leading solutions provider for the education industry, today
reported sales and earnings for fiscal year 2024, which ended on
April 27, 2024. The following figures are GAAP results from
continuing operations on a consolidated basis, unless noted
otherwise. Note that Adjusted EBITDA is a non-GAAP calculation.
Fiscal year 2024 revenue grew 1.6% to $1.57 billion, primarily
driven by 48% growth in First Day Complete® revenue which was
partially offset by lower revenues resulting from a net decrease in
physical locations, many of which were closures of under-performing
stores. Net loss was $(62.5) million, a $27.6 million improvement
from last year. Adjusted EBITDA improved to $45.2 million for
fiscal year 2024, a $53.3 million increase from a loss of $(8.1)
million last year. For a reconciliation of non-GAAP measures to the
most applicable GAAP measure, please see the reconciliation tables
below. Improved revenues along with various cost saving and
productivity initiatives were primarily responsible for the
improvement.
First Day Complete saw Spring 2024 store count grow to 160
stores which represent enrollment of approximately 805,000
undergraduate and post-graduate students*, an increase of 39%
compared to last year. The Company continues to focus on expanding
First Day Complete adoptions and anticipates further growth in this
program in fiscal year 2025. The Company ended the quarter with
1,245 physical and virtual stores.
Net debt increased from the prior year to $187.1 million at year
end fiscal year 2024, in part due to vendors tightening payable
terms as the Company worked to complete its bank refinancing. As a
result of the recent closing of the milestone equity and
refinancing transactions, which included the infusion of
approximately $80 million of net new cash into the business and a
new four-year, $325 million credit facility, payable terms have
begun to return to normal. Additionally, the current level of net
debt on a seasonally adjusted basis has meaningfully declined,
because of the cash infusion and the conversion of approximately
$34 million of second lien debt into equity.
As a result of the recent debt reduction and the normalization
of Barnes & Noble Education’s banking relationships, the
Company anticipates a significant ongoing reduction in interest
costs, bank amendment fees, and legal and advisory expenses that
have weighed on the business over the past two years.
Jonathan Shar, CEO, commented, “We sincerely thank our
employees, partner institutions, vendors, and other business
partners for their support and understanding. It is a relief to
move past that difficult phase and embrace a fresh start. We are
also grateful to Fanatics, Lids and VitalSource Technologies for
their continued strategic support; we are thrilled to have them as
significant shareholders moving forward.”
Shar further added, “With a significantly improved balance
sheet, Barnes & Noble Education is well-positioned to advance
its industry leadership while continuing to strategically invest in
innovation and improve the experiences and value we bring to our
customers and partner institutions. Our focus will remain on
productivity and cost efficiencies, while also making investments
in technology. We are seeking to drive material improvements in
profitability and to further build upon the strong financial
foundation that we have recently attained.”
On June 11, 2024, the Company completed a 1-for-100 reverse
stock split. Current outstanding shares total approximately 26.2
million.
*As reported by National Center for Education Statistics
(NCES)
BARNES & NOBLE EDUCATION,
INC. AND SUBSIDIARIES
Consolidated Statements of
Operations (Unaudited)
(In thousands, except per
share data)
13 weeks ended
52 weeks ended
April 27, 2024
April 29, 2023
April 27, 2024
April 29, 2023
Sales:
Product sales and other
$
192,733
$
201,849
$
1,430,456
$
1,406,655
Rental income
43,189
39,998
136,679
136,553
Total sales
235,922
241,847
1,567,135
1,543,208
Cost of sales (exclusive of depreciation
and amortization expense):
Product and other cost of sales
143,681
161,694
1,135,376
1,119,482
Rental cost of sales
22,377
21,871
74,983
74,287
Total cost of sales
166,058
183,565
1,210,359
1,193,769
Gross profit
69,864
58,282
356,776
349,439
Selling and administrative expenses
68,381
76,475
311,574
357,611
Depreciation and amortization expense
9,984
10,899
40,560
42,163
Impairment loss (non-cash) (a)
1,368
—
7,166
6,008
Restructuring and other charges (a)
7,089
5,341
19,409
10,103
Operating loss
(16,958
)
(34,433
)
(21,933
)
(66,446
)
Interest expense, net (b)
10,827
7,011
40,365
22,683
Loss from continuing operations before
income taxes
(27,785
)
(41,444
)
(62,298
)
(89,129
)
Income tax expense
(349
)
408
183
1,011
Loss from continuing operations
(27,436
)
(41,852
)
(62,481
)
(90,140
)
Loss from discontinued operations, net of
tax of $0, $101, $20, and $398, respectively
72
(4,398
)
(730
)
(11,722
)
Net loss
$
(27,364
)
$
(46,250
)
$
(63,211
)
$
(101,862
)
Loss per common share: (c)
Basic and Diluted
Continuing operations
$
(10.27
)
$
(15.82
)
$
(23.47
)
$
(34.17
)
Discontinued operations
$
0.03
$
(1.66
)
$
(0.28
)
$
(4.44
)
Total Basic and Diluted Earnings per
share
$
(10.24
)
$
(17.48
)
$
(23.75
)
$
(38.61
)
Weighted average common shares outstanding
- Basic and Diluted:
2,673
2,646
2,662
2,638
(a) For additional information, see the Notes in the Non-GAAP
disclosure information of this Press Release. (b) The increase in
interest expense is primarily due to higher borrowings, higher
interest rates and increased amortization of deferred financing
costs. (c) On June 10, 2024, subsequent to the end of Fiscal 2024,
we completed various transactions, including an equity rights
offering. Because the rights issuance was offered to all existing
stockholders at an exercise price that was less than the fair value
of our Common Stock, as of such time, the weighted average shares
outstanding and basic and diluted earnings (loss) per share were
adjusted retroactively to reflect the bonus element of the rights
offering for all periods presented by a factor of 5.03. On June 11,
2024, subsequent to the end of Fiscal 2024, we completed a reverse
stock split of our outstanding shares of common stock at a ratio of
1-for-100 in which every 100 shares of the common stock issued and
outstanding was converted into one share of our common stock. The
weighted average common shares and loss per common share reflect
the bonus element resulting from the equity rights offering and the
reverse stock split for all periods presented on the consolidated
statements of operations.
13 weeks ended
52 weeks ended
April 27, 2024
April 29, 2023
April 27, 2024
April 29, 2023
Percentage of sales:
Sales:
Product sales and other
81.7
%
83.5
%
91.3
%
91.2
%
Rental income
18.3
%
16.5
%
8.7
%
8.8
%
Total sales
100.0
%
100.0
%
100.0
%
100.0
%
Cost of sales (exclusive of depreciation
and amortization expense):
Product and other cost of sales (a)
74.5
%
80.1
%
79.4
%
79.6
%
Rental cost of sales (a)
51.8
%
54.7
%
54.9
%
54.4
%
Total cost of sales
70.4
%
75.9
%
77.2
%
77.4
%
Gross profit
29.6
%
24.1
%
22.8
%
22.6
%
Selling and administrative expenses
29.0
%
31.6
%
19.9
%
23.2
%
Depreciation and amortization
4.2
%
4.5
%
2.6
%
2.7
%
Impairment loss (non-cash)
0.6
%
—
%
0.5
%
0.4
%
Restructuring and other charges
3.0
%
2.2
%
1.2
%
0.7
%
Operating loss
(7.2
)%
(14.2
)%
(1.4
)%
(4.3
)%
Interest expense, net
4.6
%
2.9
%
2.6
%
1.5
%
Loss from continuing operations before
income taxes
(11.8
)%
(17.1
)%
(4.0
)%
(5.8
)%
Income tax expense
(0.1
)%
0.2
%
—
%
0.1
%
Loss from continuing operations
(11.6
)%
(17.3
)%
(4.0
)%
(5.8
)%
(a) Represents the percentage these costs bear to the related
sales, instead of total sales.
BARNES & NOBLE EDUCATION,
INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited) (In thousands, except per share data)
April 27, 2024
April 29, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
10,459
$
14,219
Receivables, net
104,110
92,512
Merchandise inventories, net
344,037
322,979
Textbook rental inventories
32,992
30,349
Prepaid expenses and other current
assets
39,158
49,512
Assets held for sale, current
—
27,430
Total current assets
530,756
537,001
Property and equipment, net
52,912
68,153
Operating lease right-of-use assets
202,522
246,972
Intangible assets, net
94,191
110,632
Deferred tax assets, net
—
132
Other noncurrent assets
24,703
17,889
Total assets
$
905,084
$
980,779
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
299,157
$
267,923
Accrued liabilities
77,441
85,759
Current operating lease liabilities
102,206
99,980
Liabilities held for sale
—
8,423
Total current liabilities
478,804
462,085
Long-term deferred taxes, net
1,289
1,970
Long-term operating lease liabilities
142,193
184,754
Other long-term liabilities
15,882
19,068
Long-term borrowings (a)
196,337
182,151
Total liabilities
834,505
850,028
Commitments and contingencies
—
—
Stockholders' equity:
Preferred stock, $0.01 par value;
authorized, 5,000 shares; issued and outstanding, none
—
—
Common stock, $0.01 par value; authorized,
200,000 shares; issued, 55,840 and 55,140 shares, respectively;
outstanding, 53,156 and 52,604 shares, respectively
558
551
Additional paid-in-capital
749,140
745,932
Accumulated deficit
(656,567
)
(593,356
)
Treasury stock, at cost
(22,552
)
(22,376
)
Total stockholders' equity
70,579
130,751
Total liabilities and stockholders'
equity
$
905,084
$
980,779
(a) The Credit Facility and Term Loan were scheduled to become due
on December 28, 2024 and April 7, 2025, respectively. On June 10,
2024, subsequent to the end of Fiscal 2024, we completed various
transactions, including amending and extending the maturity date of
the Credit Facility to June 9, 2028 and converting all outstanding
principal and interest amounts owed under our Term Loan Credit
Agreement into shares of our Common Stock.
BARNES & NOBLE EDUCATION,
INC. AND SUBSIDIARIES
Consolidated Statements of
Cash Flow (Unaudited)
(In thousands, except per
share data)
52 weeks ended
April 27, 2024
April 29, 2023
Cash flows from operating activities:
Net loss
$
(63,211
)
$
(101,862
)
Less: Loss from discontinued operations,
net of tax
(730
)
(11,722
)
Loss from continuing operations
(62,481
)
(90,140
)
Adjustments to reconcile net loss from
continuing operations to net cash flows from operating activities
from continuing operations:
Depreciation and amortization expense
40,560
42,163
Content amortization expense
—
26
Amortization of deferred financing
costs
13,150
3,129
Impairment loss (non-cash) (a)
7,166
6,008
Deferred taxes
(550
)
409
Stock-based compensation expense
3,380
4,715
Non-cash interest expense
(paid-in-kind)
2,652
—
Changes in operating lease right-of-use
assets and liabilities
24
5,912
Changes in other long-term assets and
liabilities and other, net
(20,997
)
2,711
Changes in other operating assets and
liabilities, net:
Receivables, net
(11,598
)
43,489
Merchandise inventories
(21,058
)
(29,125
)
Textbook rental inventories
(2,643
)
(737
)
Prepaid expenses and other current
assets
31,593
19,610
Accounts payable and accrued
liabilities
19,257
82,343
Changes in other operating assets and
liabilities, net
15,551
115,580
Net cash flows (used in) provided by
operating activities from continuing operations
(1,545
)
90,513
Net cash flows (used in) provided by
operating activities from discontinued operations
(3,577
)
1,157
Net cash flows (used in) provided by
operating activities
$
(5,122
)
$
91,670
Cash flows from investing activities:
Purchases of property and equipment
$
(14,070
)
$
(25,092
)
Changes in other noncurrent assets and
other
78
591
Net cash flows used in investing
activities from continuing operations
(13,992
)
(24,501
)
Net cash flows provided by (used in)
investing activities from discontinued operations
21,395
(6,542
)
Net cash flows provided by (used in)
investing activities
$
7,403
$
(31,043
)
Cash flows from financing activities:
Proceeds from borrowings
$
563,023
$
590,303
Repayments of borrowings
(552,230
)
(631,849
)
Payment of deferred financing costs
(16,316
)
(7,265
)
Purchase of treasury shares
(176
)
(864
)
Net cash flows used in financing
activities from continuing operations
(5,699
)
(49,675
)
Net cash flows provided by financing
activities from discontinued operations
—
—
Net cash flows used in financing
activities
$
(5,699
)
$
(49,675
)
Net decrease in cash, cash equivalents,
and restricted cash
$
(3,418
)
$
10,952
Cash, cash equivalents, and restricted
cash at beginning of period
31,988
21,036
Cash, cash equivalents, and restricted
cash at end of period
28,570
31,988
Less: Cash and cash equivalents of
discontinued operations at end of period
—
(1,057
)
Cash, cash equivalents, and restricted
cash of continuing operations at end of period
$
28,570
$
30,931
Supplemental cash flow information:
Cash paid during the period for:
Interest paid
$
24,943
$
19,024
Income taxes paid (net of refunds)
$
(7,293
)
$
(15,216
)
BARNES & NOBLE EDUCATION,
INC. AND SUBSIDIARIES
Non-GAAP Information
(a)
(In thousands)
(Unaudited)
Consolidated Adjusted Earnings
(non-GAAP) (a) - Continuing Operations
13 weeks ended
52 weeks ended
April 27, 2024
April 29, 2023
April 27, 2024
April 29, 2023
Net loss from continuing operations
$
(27,436
)
$
(41,852
)
$
(62,481
)
$
(90,140
)
Reconciling items, after-tax (below)
8,457
5,341
26,575
16,137
Adjusted Earnings (Non-GAAP)
$
(18,979
)
$
(36,511
)
$
(35,906
)
$
(74,003
)
Reconciling items, pre-tax
Impairment loss (non-cash) (b)
$
1,368
$
—
$
7,166
$
6,008
Content amortization (non-cash) (c)
—
—
—
26
Restructuring and other charges (d)
7,089
5,341
19,409
10,103
Reconciling items (e)
$
8,457
$
5,341
$
26,575
$
16,137
Consolidated Adjusted EBITDA (non-GAAP)
(a)
13 weeks ended
52 weeks ended
April 27, 2024
April 29, 2023
April 27, 2024
April 29, 2023
Net loss from continuing operations
$
(27,436
)
$
(41,852
)
$
(62,481
)
$
(90,140
)
Add:
Depreciation and amortization expense
9,984
10,899
40,560
42,163
Interest expense, net
10,827
7,011
40,365
22,683
Income tax (benefit) expense
(349
)
408
183
1,011
Impairment loss (non-cash) (b)
1,368
—
7,166
6,008
Content amortization (non-cash) (c)
—
—
—
26
Restructuring and other charges (d)
7,089
5,341
19,409
10,103
Adjusted EBITDA (Non-GAAP) - Continuing
Operations
$
1,483
$
(18,193
)
$
45,202
$
(8,146
)
Adjusted EBITDA (Non-GAAP) - Discontinued
Operations
$
72
$
(1,668
)
$
(321
)
$
654
Adjusted EBITDA (Non-GAAP) - Total
$
1,555
$
(19,861
)
$
44,881
$
(7,492
)
(a) For additional information, see "Use of Non-GAAP Financial
Information" in the Non-GAAP disclosure information of this Press
Release. (b) During the 52 weeks ended April 27, 2024, we evaluated
certain of our store-level long-lived assets in the Retail segment
for impairment. Based on the results of the impairment tests, we
recognized an impairment loss (non-cash) of $7,166 (both pre-tax
and after-tax) comprised of $405, $3,600, and $3,161 of property
and equipment, operating lease right-of-use assets, and amortizable
intangibles, respectively. During the 52 weeks ended April 29,
2023, we evaluated certain of our store-level long-lived assets in
the Retail segment for impairment. Based on the results of the
impairment tests, we recognized an impairment loss (non-cash) of
$6,008 (both pre-tax and after-tax) comprised of $708, $1,697,
$3,599 and $4 of property and equipment, operating lease
right-of-use assets, amortizable intangibles, and other noncurrent
assets, respectively. (c) Represents amortization of content
development costs (non-cash) recorded in cost of goods sold in the
consolidated financial statements. (d) Restructuring and other
charges are comprised primarily of professional service costs for
restructuring and process improvements, including costs related to
evaluating strategic alternatives, and severance and other employee
termination and benefit costs associated with the elimination of
various positions as part of cost reduction objectives. (e) There
is no pro forma income effect of the non-GAAP items.
Use of Non-GAAP Financial Information - Adjusted Earnings and
Adjusted EBITDA
To supplement the Company’s consolidated financial statements
presented in accordance with generally accepted accounting
principles (“GAAP”), in the Press Release attached hereto as
Exhibit 99.1, the Company uses the financial measures of Adjusted
Earnings and Adjusted EBITDA, which are non-GAAP financial measures
under Securities and Exchange Commission (the "SEC") regulations.
We define Adjusted Earnings as net income (loss) from continuing
operations adjusted for certain reconciling items that are
subtracted from or added to net income (loss) from continuing
operations. We define Adjusted EBITDA as net income (loss) from
continuing operations plus (1) depreciation and amortization; (2)
interest expense and (3) income taxes, (4) as adjusted for items
that are subtracted from or added to net income (loss) from
continuing operations.
The non-GAAP measures included in the Press Release have been
reconciled to the most comparable financial measures presented in
accordance with GAAP, attached hereto as Exhibit 99.1, as follows:
the reconciliation of Adjusted Earnings to net income (loss) from
continuing operations; the reconciliation of consolidated Adjusted
EBITDA to consolidated net income (loss) from continuing
operations. All of the items included in the reconciliations are
either (i) non-cash items or (ii) items that management does not
consider in assessing our on-going operating performance.
These non-GAAP financial measures are not intended as
substitutes for and should not be considered superior to measures
of financial performance prepared in accordance with GAAP. In
addition, the Company's use of these non-GAAP financial measures
may be different from similarly named measures used by other
companies, limiting their usefulness for comparison purposes.
We review these non-GAAP financial measures as internal measures
to evaluate our performance and manage our operations. We believe
that these measures are useful performance measures which are used
by us to facilitate a comparison of our on-going operating
performance on a consistent basis from period-to-period. We believe
that these non-GAAP financial measures provide for a more complete
understanding of factors and trends affecting our business than
measures under GAAP can provide alone, as they exclude certain
items that management believes do not reflect the ordinary
performance of our operations in a particular period. Our Board of
Directors and management also use Adjusted EBITDA as one of the
primary methods for planning and forecasting expected performance,
for evaluating on a quarterly and annual basis actual results
against such expectations, and as a measure for performance
incentive plans. We believe that the inclusion of Adjusted Earnings
and Adjusted EBITDA results provides investors useful and important
information regarding our operating results, in a manner that is
consistent with management’s evaluation of business
performance.
The Company urges investors to carefully review the GAAP
financial information included as part of the Company’s Form 10-K
dated April 27, 2024 filed with the SEC on July 1, 2024, which
includes consolidated financial statements for each of the two
years for the period ended April 27, 2024 and April 29, 2023
(Fiscal 2024 and Fiscal 2023, respectively) and the Company's
Quarterly Reports on Form 10-Q for the period ended July 29, 2023
filed with the SEC on September 6, 2023, the Company's Quarterly
Report on Form 10-Q for the period ended October 28, 2023 filed
with the SEC on December 6, 2023, and the Company's Quarterly
Report on Form 10-Q for the period ended January 27, 2024 filed
with the SEC on March 12, 2024.
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,
visit 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 and
new risks may 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. Actual results could differ materially from those
projected in the forward-looking statements, therefore we caution
you not to place undue reliance on these forward-looking
statements. Such statements reflect our current views with respect
to future events, the outcome of which is subject to certain risks,
including, but not limited to: the amount of our indebtedness and
ability to comply with covenants contained in our credit agreement;
our ability to maintain adequate liquidity levels to support
ongoing inventory purchases and related vendor payments in a timely
manner; slower than anticipated pace of adoption of our BNC First
Day® equitable and inclusive access course material models; our
dependency on strategic service provider relationships and the
potential for adverse operational and financial changes to these
strategic service provider relationships; non-renewal of our
managed bookstore, physical and/or online store contracts; general
competitive conditions; a decline in college enrollment or
decreased funding available for students; technological changes,
including the adoption of artificial intelligence technologies for
educational content; 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; disruption of or interference with
third party service providers and our own proprietary technology;
impacts that public health crises may have on the overall demand
for BNED products and services, our operations, the operations of
our suppliers, service providers, and campus partners as well as
the ability of our suppliers to manufacture or source products,
particularly from outside of the United States; and changes in
applicable domestic and international laws, rules or regulations or
changes in enforcement practices, including, without limitation,
the impact of recently proposed regulatory changes by the United
States Department of Education, U.S. tax reform, or changes to
consumer data privacy rights legislation, as well as related
guidance.
For a more detailed discussion of these factors, and other
factors that could cause actual results to vary materially,
interested parties should review the risk factors listed in the
Company’s Annual Report on Form 10-K for the year ended April 27,
2024 as filed with the U.S. Securities and Exchange Commission. Any
forward-looking statements made by us in this press release speak
only as of the date of this press release, and we do not intend to
update these forward-looking statements after the date of this
press release, except as required by law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240628262776/en/
BNED: Kevin F. Watson Executive Vice President, Chief
Financial Officer kwatson@bned.com
Grafico Azioni Barnes and Noble Education (NYSE:BNED)
Storico
Da Ott 2024 a Nov 2024
Grafico Azioni Barnes and Noble Education (NYSE:BNED)
Storico
Da Nov 2023 a Nov 2024
