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Barnes & Noble Reports Fiscal 2013 Second Quarter Financial Results

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 or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements in this paragraph. Barnes & Noble 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 communication.

                 
BARNES & NOBLE, INC. AND SUBSIDIARIES Consolidated Statements of Operations (In thousands, except per share data)
 
                           
 
13 weeks ended 13 weeks ended 26 weeks ended 26 weeks ended
October 27, 2012 October 29, 2011 October 27, 2012   October 29, 2011
 
Sales $ 1,884,532 1,891,961 $ 3,338,039 3,310,365
Cost of sales and occupancy   1,404,034 1,420,297   2,443,653 2,451,143
Gross profit   480,498 471,664   894,386 859,222
Selling and administrative expenses 415,747 415,632 825,802 826,750
Depreciation and amortization   57,613 57,755   115,648 113,427
Operating income (loss) 7,138 (1,723) (47,064) (80,955)
Interest expense, net   8,122 8,460   17,064 17,901
Income (loss) before taxes (984) (10,183) (64,128) (98,856)
Income taxes   (409) (3,620)   (22,573) (35,687)
Net income (loss) (575) (6,563) (41,555) (63,169)
Net loss attributable to noncontrolling interests   2,808 -   2,808 -
Net income (loss) attributable to Barnes & Noble, Inc. $ 2,233 (6,563) $ (38,747) (63,169)
 
 
Basic loss per common share:
Loss attributable to Barnes & Noble, Inc. available
for common shareholders $ (0.04) (0.17) $ (0.82) (1.16)
 
Diluted loss per common share:
Loss attributable to Barnes & Noble, Inc. available
for common shareholders $ (0.04) (0.17) $ (0.82) (1.16)
 
Weighted average common shares outstanding:
Basic 58,168 57,261 58,094 57,207
Diluted 58,168 57,261 58,094 57,207
 
Percentage of sales:
Sales 100.0% 100.0% 100.0% 100.0%
Cost of sales and occupancy   74.5% 75.1%   73.2% 74.0%
Gross profit   25.5% 24.9%   26.8% 26.0%
Selling and administrative expenses 22.1% 22.0% 24.7% 25.0%
Depreciation and amortization   3.1% 3.1%   3.5% 3.4%
Operating income (loss) 0.4% -0.1% -1.4% -2.4%
Interest expense, net   0.4% 0.4%   0.5% 0.5%
Income (loss) before taxes -0.1% -0.5% -1.9% -3.0%
Income taxes   0.0% -0.2%   -0.7% -1.1%
Net income (loss) 0.0% -0.3% -1.2% -1.9%
Net loss attributable to noncontrolling interests   0.1% 0.0%   0.1% 0.0%
Net income (loss)   0.1% -0.3%   -1.2% -1.9%
 

         
BARNES & NOBLE, INC. AND SUBSIDIARIES Consolidated Balance Sheets (In thousands)
 
               
 
October 27, 2012 October 29, 2011
ASSETS
Current assets:
Cash and cash equivalents $ 470,994 $ 23,633
Receivables, net 224,545 240,600
Merchandise inventories 1,796,208 1,836,740
Prepaid expenses and other current assets   223,325   180,352
Total current assets   2,715,072   2,281,325
 
Property and equipment:
Land and land improvements 2,541 8,617
Buildings and leasehold improvements 1,211,156 1,220,869
Fixtures and equipment   1,833,667   1,725,135
3,047,364 2,954,621
Less accumulated depreciation and amortization   2,462,310   2,280,551
Net property and equipment   585,054   674,070
 
Goodwill 515,524 521,899
Intangible assets, net 558,157 574,964
Other noncurrent assets   57,218   55,794
Total assets $ 4,431,025 $ 4,108,052
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,448,397 $ 1,461,981
Accrued liabilities 470,975 436,868
Gift card liabilities   297,191   287,268
Total current liabilities   2,216,563   2,186,117
 
Long-term debt 338,400 274,900
Long-term deferred taxes 292,879 275,868
Other long-term liabilities 364,966 418,923
 
Redeemable Preferred Shares; $.001 par value; 5,000
shares authorized; 204 and 204 shares issued, respectively 192,904 191,681
Preferred Member Interests in NOOK Media, LLC 289,054 -
 
Shareholders' equity:
Common stock; $.001 par value; 300,000 shares
authorized; 92,037 and 90,856 shares issued, respectively 92 91
Additional paid-in capital 1,377,992 1,331,983
Accumulated other comprehensive loss (16,635) (11,630)
Retained earnings 434,174 495,830
Treasury stock, at cost, 33,801 and 33,527 shares, respectively   (1,059,364)   (1,055,711)
Total shareholders' equity   736,259   760,563
Commitments and contingencies   -   -
Total liabilities and shareholders' equity $ 4,431,025 $ 4,108,052
 

     
BARNES & NOBLE, INC. AND SUBSIDIARIES Segment Information (In thousands)
     
                       
 
13 weeks ended 13 weeks ended 26 weeks ended 26 weeks ended
October 27, 2012 October 29, 2011 October 27, 2012 October 29, 2011
 
Sales  
Retail $ 996,028 1,025,802 $ 2,115,415 2,123,054
College 773,007 769,650 993,725 990,144
NOOK 160,347 151,847 352,322 343,259
Elimination   (44,850) (55,338)   (123,423) (146,092)
Total $ 1,884,532 1,891,961 $ 3,338,039 3,310,365
 
Gross Profit
Retail $ 293,362 290,490 $ 630,099 600,939
College 168,221 167,691 219,263 218,863
NOOK   18,915 13,483   45,024 39,420
Total $ 480,498 471,664 $ 894,386 859,222
 
Selling and Administrative Expenses
Retail $ 264,974 276,401 $ 527,150 547,154
College 80,434 74,900 145,508 138,276
NOOK   70,339 64,331   153,144 141,320
Total $ 415,747 415,632 $ 825,802 826,750
 
EBITDA
Retail $ 28,388 14,089 $ 102,949 53,785
College 87,787 92,791 73,755 80,587
NOOK   (51,424) (50,848)   (108,120) (101,900)
Total $ 64,751 56,032 $ 68,584 32,472
 
Net Loss
EBITDA $ 64,751 56,032 $ 68,584 32,472
Depreciation and Amortization (57,613) (57,755) (115,648) (113,427)
Interest Expense, net (8,122) (8,460) (17,064) (17,901)
Income Taxes   409 3,620   22,573 35,687
Total $ (575) (6,563) $ (41,555) (63,169)
 
 
 
Percentage of sales:
 
Gross Margin
Retail 29.5% 28.3% 29.8% 28.3%
College 21.8% 21.8% 22.1% 22.1%
NOOK   16.4% 14.0%   19.7% 20.0%
Total 25.5% 24.9% 26.8% 26.0%
 
Selling and Administrative Expenses
Retail 26.6% 26.9% 24.9% 25.8%
College 10.4% 9.7% 14.6% 14.0%
NOOK   60.9% 66.7%   66.9% 71.7%
Total 22.1% 22.0% 24.7% 25.0%
 

                               
BARNES & NOBLE, INC. AND SUBSIDIARIES Loss Per Share (In thousands, except per share data)
 
                                             
 
13 weeks ended 26 weeks ended
October 27, 2012 October 29, 2011 October 27, 2012 October 29, 2011
                                       
Numerator for basic loss per share:
Income (loss) attributable to Barnes & Noble, Inc. $ 2,233 (6,563) $ (38,747) (63,169)
Preferred stock dividends (3,942) (3,118) (7,883) (3,118)
Accretion of dividends on preferred stock   (453) (262)   (769) (262)
Net loss available to common shareholders $ (2,162) (9,943) $ (47,399) (66,549)
 
Numerator for diluted loss per share:
Net loss available to common shareholders $ (2,162) (9,943) $ (47,399) (66,549)
 
Denominator for basic and diluted loss per share:
Basic weighted average common shares   58,168 57,261   58,094 57,207
 
 
Basic loss per common share

Net loss attributable to Barnes & Noble, Inc. available

for common shareholders

$ (0.04) (0.17) $ (0.82) (1.16)
 
Diluted loss per common share

Net loss attributable to Barnes & Noble, Inc. available

for common shareholders

$ (0.04) (0.17) $ (0.82) (1.16)
 




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