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Barnes & Noble Reports Fiscal 2013 Third Quarter Financial Results

Barnes & Noble, Inc. (NYSE: BKS) today reported sales and earnings for its fiscal 2013 third quarter ended January 26, 2013.

Third quarter consolidated revenues were $2.2 billion, a decrease of 8.8% as compared to the prior year. Third quarter consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) were $55 million, as compared to $150 million a year ago. Third quarter consolidated net losses were $6.1 million, as compared to net earnings of $52 million a year ago. Third quarter results were adversely impacted by NOOK inventory charges and promotional allowances discussed below in the NOOK section. Third quarter net losses were $0.18 per share, which includes the impact of the dividend on redeemable preferred shares, as compared to net earnings of $0.71 per share a year ago.

On January 23, 2013, the company announced the completion of its strategic partnership with Pearson, which invested $89.5 million in NOOK Media LLC for preferred membership interests representing a 5% equity stake. Following the closing of the transaction, Barnes & Noble now owns approximately 78.2% of the NOOK Media subsidiary and Microsoft, which also holds preferred membership interests, owns approximately 16.8%.

The company ended the third quarter with cash of $214 million and no borrowings under its $1 billion Revolving Credit facility, as compared to a net debt position of $74 million a year ago.

Third Quarter 2013 Results from Operations

Segment results for the fiscal 2013 and fiscal 2012 third quarters are as follows:

                                                     
Revenues EBITDA
$ in millions Increase/(Decrease) Increase/(Decrease)
Q3 2013 Q3 2012 $ % Q3 2013 Q3 2012 $ %
Retail $ 1,505.2 $ 1,677.3 ($172.2 ) -10.3 % $ 212.0 $ 197.6 $ 14.4 7.3 %
College 517.2 525.6 (8.4 ) -1.6 % 33.9 35.2 (1.3 ) -3.6 %
NOOK 316.0 426.6 (110.6 ) -25.9 % (190.4 ) (82.8 ) (107.6 ) -129.9 %
Elimination (1)   (114.4 )   (190.4 ) 76.0   -39.9 %   n/a     n/a     n/a   n/a  
Total $ 2,223.9   $ 2,439.1   ($215.2 ) -8.8 % $ 55.5   $ 149.9     ($94.5 ) -63.0 %
 

(1) Represents the elimination of intercompany sales from NOOK to Barnes & Noble Retail and Barnes & Noble College on a sell through basis.

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