NEW YORK--(BUSINESS WIRE)--Barnes & Noble, Inc. (NYSE: BKS), the world’s largest bookseller, today reported sales and earnings for its fiscal 2011 fourth quarter and full year ended April 30, 2011.
FISCAL 2011 RESULTS
For fiscal 2011, total sales increased 20% to a record $7 billion. Sales growth was fueled by inclusion of a full year of sales from Barnes & Noble College Booksellers (“College”) as well as a 50% sales increase at BN.com.
The rapidly growing digital business propelled the top-line at BN.com driven by the company’s NOOK™ eReader product line and digital content from the NOOK Bookstore™. BN.com comparable sales growth accelerated throughout the year, increasing 78% for the fourth quarter and 65% for the full year as compared to the same periods in fiscal 2010. BN.com sales were $217 million for the quarter and $858 million for the full year.
Barnes & Noble store sales were $943 million for the quarter and $4.4 billion for the full year. Comparable store sales decreased 2.9% for the quarter. Fourth quarter comparable store sales were temporarily negatively impacted by the liquidation of over 200 Borders bookstores during the quarter. As those stores have closed, the company is realizing incremental sales in those markets. For the full year, comparable store sales increased 0.7% led by the sale of digital products, which more than offset the decline in trade books.
College sales increased 3.5% for the quarter to $211 million and were $1.8 billion for the full year. Comparable store sales increased 2.8% for the quarter and decreased 0.8% for the year.
For the fourth quarter, the company reported a consolidated net loss of $59 million, or $1.04 per share.
For fiscal 2011, the company reported earnings before interest, taxes, depreciation and amortization (EBITDA) of $163 million. The consolidated full-year net loss was $74 million, or $1.31 per share.
FISCAL 2012
The company has previously announced that it received a proposal from Liberty Media to acquire the company and that Liberty’s proposal is under review by the Special Committee of the company’s Board of Directors which is charged with reviewing strategic alternatives for the company. In light of the pendency of that proposal and its ongoing process, the Special Committee has determined that the company will not at this time issue sales or earnings guidance regarding the outlook for fiscal 2012.
CONFERENCE CALL
A conference call with Barnes & Noble, Inc.’s senior management will be webcast beginning at 10:00 A.M. ET on Tuesday, June 21, 2011, and is accessible at www.barnesandnobleinc.com/webcasts.
Barnes & Noble, Inc. will report first quarter earnings results on or about August 30, 2011.
ABOUT BARNES & NOBLE, INC.
Barnes & Noble, Inc. (NYSE:BKS), the world's largest bookseller and a Fortune 500 company, operates 705 bookstores in 50 states. Barnes & Noble College Booksellers, LLC, a wholly-owned subsidiary of Barnes & Noble, also operates 636 college bookstores serving over 4.6 million students and faculty members at colleges and universities across the United States. Barnes & Noble conducts its online business through Barnes & Noble.com (www.bn.com), one of the Web's largest e-commerce sites, which also features more than two million titles in its NOOK Bookstore(TM) (www.bn.com/ebooks). Through Barnes & Noble’s NOOK(TM) eReading product offering, customers can buy and read eBooks on the widest range of platforms, including NOOK eBook Readers, devices from partner companies, and hundreds of the most popular mobile and computing devices using free NOOK software.
General information on Barnes & Noble, Inc. can be obtained via the Internet by visiting the company's corporate website: www.barnesandnobleinc.com.
The All-New NOOK(TM), The Simple Touch Reader(TM), NOOK(TM), NOOK 1st Edition(TM), NOOK Wi-Fi 1st Edition(TM), NOOK Color(TM), Reader’s Tablet(TM), Fast Page(TM), NOOK Books(TM), NOOK Bookstore(TM), NOOK Newsstand(TM), PubIt!(TM), NOOK Kids(TM), Read In Store(TM), More In Store(TM), NOOK Friends(TM), LendMe(R), NOOK Library(TM), NOOK Boutiques(TM), The Barnes & Noble Promise(TM), NOOK Books en español(TM), NOOK Study(TM), Free Friday(TM), Lifetime Library(TM) and Read What You Love. Anywhere You Like(TM) are trademarks of Barnes & Noble, Inc. Other trademarks referenced in this release are the property of their respective owners.
Follow Barnes & Noble on Twitter (www.bn.com/twitter), Facebook (http://www.facebook.com/barnesandnoble) and YouTube (http://www.youtube.com/user/bnstudio).
FORWARD-LOOKING STATEMENTS
This press release contains certain forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) and information relating to Barnes & Noble that are based on the beliefs of the management of Barnes & Noble as well as assumptions made by and information currently available to the management of Barnes & Noble. When used in this communication, the words "anticipate," "believe," "estimate," "expect," "intend," "plan," "will" and similar expressions, as they relate to Barnes & Noble or the management of Barnes & Noble, identify forward-looking statements. Such statements reflect the current views of Barnes & Noble with respect to future events, the outcome of which is subject to certain risks, including, among others, the general economic environment and consumer spending patterns, decreased consumer demand for Barnes & Noble's products, low growth or declining sales and net income due to various factors, possible disruptions in Barnes & Noble's computer systems, telephone systems or supply chain (including supplier risks resulting from our reliance on suppliers outside the United States, including suppliers in China), possible risks associated with data privacy, information security and intellectual property, possible work stoppages or increases in labor costs, possible increases in shipping rates or interruptions in shipping service, effects of competition, potential effects of a bankruptcy filing by one of Barnes & Noble's largest competitors and actions taken by that competitor during bankruptcy, including store closures or store closures at a rate different than anticipated, sales of inventory at discounted prices and elimination of liabilities, higher-than-anticipated store closing or relocation costs, higher interest rates, the performance of Barnes & Noble's online, digital and other initiatives, effects of government regulation on the Company’s business, including its online and digital businesses (including with respect to the agency pricing model for digital content distribution), the performance and successful integration of acquired businesses, the success of Barnes & Noble's strategic investments, unanticipated increases in merchandise, component or occupancy costs, unanticipated adverse litigation results or effects, including with respect to intellectual property, product and component shortages, the outcome of Barnes & Noble's evaluation of strategic alternatives, including a possible sale of Barnes & Noble, as announced on August 3, 2010 or the outcome of the proposal from Liberty Media announced on May 19, 2011, and other factors which may be outside of Barnes & Noble's control, including those factors discussed in detail in Item 1A, "Risk Factors," in Barnes & Noble's Quarterly Report on Form 10-Q, filed with the SEC on January 29, 2011, and in Barnes & Noble'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 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 | 52 weeks ended | 52 weeks ended | ||||||||||||||
| April 30, 2011 | May 1, 2010 | April 30, 2011 | May 1, 2010 | ||||||||||||||
| Sales | $ | 1,371,220 | $ | 1,318,261 | $ | 6,998,565 | $ | 5,807,754 | |||||||||
| Cost of sales and occupancy | 993,858 | 955,231 | 5,205,712 | 4,131,009 | |||||||||||||
| Gross profit | 377,362 | 363,030 | 1,792,853 | 1,676,745 | |||||||||||||
| Selling and administrative expenses | 399,716 | 367,969 | 1,629,384 | 1,392,207 | |||||||||||||
| Depreciation and amortization | 57,956 | 56,683 | 228,647 | 207,774 | |||||||||||||
| Pre-opening expenses | (13 | ) | 137 | 81 | 3,518 | ||||||||||||
| Operating income (loss) | (80,297 | ) | (61,759 | ) | (65,259 | ) | 73,246 | ||||||||||
| Interest expense, net | 17,657 | 10,139 | 57,350 | 28,237 | |||||||||||||
| Income (loss) before taxes | (97,954 | ) | (71,898 | ) | (122,609 | ) | 45,009 | ||||||||||
| Income taxes | (38,538 | ) | (39,846 | ) | (48,652 | ) | 8,365 | ||||||||||
| Net income (loss) | (59,416 | ) | (32,052 | ) | (73,957 | ) | 36,644 | ||||||||||
| Net loss attributable to noncontrolling interests | - | 14 | 37 | 32 | |||||||||||||
| Net income (loss) attributable to Barnes & Noble, Inc. | $ | (59,416 | ) | $ | (32,038 | ) | $ | (73,920 | ) | $ | 36,676 | ||||||
| Basic earnings (loss) per common share: | |||||||||||||||||
| Earnings (loss) attributable to Barnes & Noble, Inc. | $ | (1.04 | ) | $ | (0.58 | ) | $ | (1.31 | ) | $ | 0.64 | ||||||
| Diluted earnings (loss) per common share: | |||||||||||||||||
| Earnings (loss) attributable to Barnes & Noble, Inc. | $ | (1.04 | ) | $ | (0.58 | ) | $ | (1.31 | ) | $ | 0.63 | ||||||
| Weighted average common shares outstanding | |||||||||||||||||
| Basic | 56,981 | 55,597 | 56,588 | 55,344 | |||||||||||||
| Diluted | 56,981 | 55,597 | 56,588 | 56,153 | |||||||||||||
| Dividends declared per common share | $ | - | $ | 0.25 | $ | 0.75 | $ | 1.00 | |||||||||
| Percentage of sales: | |||||||||||||||||
| Sales | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||
| Cost of sales and occupancy | 72.5 | % | 72.5 | % | 74.4 | % | 71.1 | % | |||||||||
| Gross profit | 27.5 | % | 27.5 | % | 25.6 | % | 28.9 | % | |||||||||
| Selling and administrative expenses | 29.2 | % | 27.9 | % | 23.3 | % | 24.0 | % | |||||||||
| Depreciation and amortization | 4.2 | % | 4.3 | % | 3.3 | % | 3.6 | % | |||||||||
| Pre-opening expenses | 0.0 | % | 0.0 | % | 0.0 | % | 0.1 | % | |||||||||
| Operating income | -5.9 | % | -4.7 | % | -0.9 | % | 1.3 | % | |||||||||
| Interest expense, net | 1.3 | % | 0.8 | % | 0.8 | % | 0.5 | % | |||||||||
| Income (loss) before taxes | -7.1 | % | -5.5 | % | -1.8 | % | 0.8 | % | |||||||||
| Income taxes | -2.8 | % | -3.0 | % | -0.7 | % | 0.1 | % | |||||||||
| Net income (loss) | -4.3 | % | -2.4 | % | -1.1 | % | 0.6 | % | |||||||||
| BARNES & NOBLE, INC. AND SUBSIDIARIES | |||||||||
| Consolidated Balance Sheets | |||||||||
| (In thousands) | |||||||||
| April 30, 2011 | May 1, 2010 | ||||||||
| ASSETS | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 59,429 | 60,965 | ||||||
| Receivables, net | 150,294 | 106,576 | |||||||
| Merchandise inventories | 1,375,362 | 1,370,111 | |||||||
| Prepaid expenses and other current assets | 161,936 | 181,825 | |||||||
| Total current assets | 1,747,021 | 1,719,477 | |||||||
| Property and equipment: | |||||||||
| Land and land improvements | 8,617 | 8,618 | |||||||
| Buildings and leasehold improvements | 1,204,108 | 1,212,567 | |||||||
| Fixtures and equipment | 1,670,488 | 1,594,048 | |||||||
| 2,883,213 | 2,815,233 | ||||||||
| Less accumulated depreciation and amortization | 2,178,562 | 2,003,199 | |||||||
| Net property and equipment | 704,651 | 812,034 | |||||||
| Goodwill | 524,113 | 528,541 | |||||||
| Intangible assets, net | 566,578 | 580,962 | |||||||
| Other noncurrent assets | 54,103 | 64,672 | |||||||
| Total assets | $ | 3,596,466 | 3,705,686 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||
| Current liabilities: | |||||||||
| Accounts payable | $ | 949,010 | 868,976 | ||||||
| Accrued liabilities | 785,667 | 755,432 | |||||||
| Short-term note payable | - | 100,000 | |||||||
| Total current liabilities | 1,734,677 | 1,724,408 | |||||||
| Long-term debt | 313,100 | 260,400 | |||||||
| Deferred taxes | 280,132 | 311,607 | |||||||
| Other long-term liabilities | 448,647 | 505,903 | |||||||
| Shareholders' equity: | |||||||||
| Common stock; $.001 par value; 300,000 shares | |||||||||
| authorized; 90,465 and 88,225 | |||||||||
| shares issued, respectively | 90 | 89 | |||||||
| Additional paid-in capital | 1,323,263 | 1,286,215 | |||||||
| Accumulated other comprehensive loss | (11,630 | ) | (13,212 | ) | |||||
| Retained earnings | 562,379 | 681,082 | |||||||
| Treasury stock, at cost, 33,410 and 33,285 shares, respectively | (1,054,192 | ) | (1,052,356 | ) | |||||
| Total Barnes & Noble, Inc. shareholders' equity | 819,910 | 901,818 | |||||||
| Noncontrolling interest | - | 1,550 | |||||||
| Total shareholders' equity | 819,910 | 903,368 | |||||||
| Commitments and contingencies | - | - | |||||||
| Total liabilities and shareholders' equity | $ | 3,596,466 | 3,705,686 | ||||||
| BARNES & NOBLE, INC. AND SUBSIDIARIES | |||||||||||||||
| Segment Information | |||||||||||||||
| (In thousands) | |||||||||||||||
| 13 weeks ended | 13 weeks ended | 52 weeks ended | 52 weeks ended | ||||||||||||
| April 30, 2011 | May 1, 2010 | April 30, 2011 | May 1, 2010 | ||||||||||||
| Sales | |||||||||||||||
| Barnes & Noble Retail | $ | 942,727 | 973,464 | $ | 4,364,246 | 4,401,343 | |||||||||
| Barnes & Noble College | 211,241 | 204,063 | 1,776,223 | 833,648 | |||||||||||
| Barnes & Noble.com | 217,252 | 140,734 | 858,096 | 572,763 | |||||||||||
| Total | $ | 1,371,220 | 1,318,261 | $ | 6,998,565 | 5,807,754 | |||||||||
| Gross Profit | |||||||||||||||
| Barnes & Noble Retail | $ | 297,392 | 304,236 | $ | 1,334,126 | 1,429,450 | |||||||||
| Barnes & Noble College | 51,384 | 45,924 | 383,343 | 177,164 | |||||||||||
| Barnes & Noble.com | 28,586 | 12,870 | 75,384 | 70,131 | |||||||||||
| Total | $ | 377,362 | 363,030 | $ | 1,792,853 | 1,676,745 | |||||||||
| Selling and Administrative Expenses | |||||||||||||||
| Barnes & Noble Retail | $ | 253,310 | 261,702 | $ | 1,085,688 | 1,089,095 | |||||||||
| Barnes & Noble College | 60,665 | 63,898 | 263,747 | 152,168 | |||||||||||
| Barnes & Noble.com | 85,741 | 42,369 | 279,949 | 150,944 | |||||||||||
| Total | $ | 399,716 | 367,969 | $ | 1,629,384 | 1,392,207 | |||||||||
| EBITDA | |||||||||||||||
| Barnes & Noble Retail | $ | 44,134 | 42,412 | $ | 248,512 | 336,894 | |||||||||
| Barnes & Noble College | (9,320 | ) | (17,989 | ) | 119,441 | 24,939 | |||||||||
| Barnes & Noble.com | (57,155 | ) | (29,499 | ) | (204,565 | ) | (80,813 | ) | |||||||
| Total | $ | (22,341 | ) | (5,076 | ) | $ | 163,388 | 281,020 | |||||||
| Net Income (Loss) | |||||||||||||||
| EBITDA | $ | (22,341 | ) | (5,076 | ) | $ | 163,388 | 281,020 | |||||||
| Depreciation and Amortization | (57,956 | ) | (56,683 | ) | (228,647 | ) | (207,774 | ) | |||||||
| Interest Expense, net | (17,657 | ) | (10,139 | ) | (57,350 | ) | (28,237 | ) | |||||||
| Income Taxes | 38,538 | 39,846 | 48,652 | (8,365 | ) | ||||||||||
| Total | $ | (59,416 | ) | (32,052 | ) | $ | (73,957 | ) | 36,644 | ||||||
| Percentage of sales: | |||||||||||||||
| Gross Margin | |||||||||||||||
| Barnes & Noble Retail | 31.5 | % | 31.3 | % | 30.6 | % | 32.5 | % | |||||||
| Barnes & Noble College | 24.3 | % | 22.5 | % | 21.6 | % | 21.3 | % | |||||||
| Barnes & Noble.com | 13.2 | % | 9.1 | % | 8.8 | % | 12.2 | % | |||||||
| Total | 27.5 | % | 27.5 | % | 25.6 | % | 28.9 | % | |||||||
| Selling and Administrative Expenses | |||||||||||||||
| Barnes & Noble Retail | 26.9 | % | 26.9 | % | 24.9 | % | 24.7 | % | |||||||
| Barnes & Noble College | 28.7 | % | 31.3 | % | 14.8 | % | 18.3 | % | |||||||
| Barnes & Noble.com | 39.5 | % | 30.1 | % | 32.6 | % | 26.4 | % | |||||||
| Total | 29.2 | % | 27.9 | % | 23.3 | % | 24.0 | % | |||||||