Sales increase 5.9% to $239 million
Comparable Sales Increase 1.8%
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, 908-991-2967Vice PresidentCorporate
Communicationscbrown@bned.comorInvestors:Thomas Donohue, 908-991-2966Vice
PresidentTreasurer and Investor Relationstdonohue@bned.com
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