LINCOLN, Neb.--(BUSINESS WIRE)--Neebo, Inc. (the “Company”; NEEB+) today announced financial results for the fiscal fourth quarter and year ended March 31, 2014. Neebo, Inc. is a holding company and the beneficial owner of Nebraska Book Company, Inc., an industry leader in solutions for the college store marketplace.
Fiscal Year 2014 Financial Highlights (year ended March 31, 2014)
- Fiscal fourth quarter 2014 rental unit penetration increased to 42.3% from 33.6% in the prior comparable period, and reached 35.9% for fiscal year 2014 from 30.7% in fiscal 2013.
- Won 16 new on-campus stores, a 10% increase to its 156 on-campus store fleet in fiscal year 2014.
- Voluntary debt payments totaled $26.4 million during fiscal year 2014, including $6.4 million made during fiscal fourth quarter 2014.
“Our focus remains on investing in our future and generating sales through continued growth in rental penetration and our on-campus store fleet,” said Steve Clemente, President and Chief Executive Officer of Neebo, Inc. “The return on investments made in Business Intelligence and ecommerce in fiscal year 2014 can be seen in our increased store count and rental unit penetration. Coupled with our enhanced ecommerce experience and Neebo Student Network offering, we are excited about the future growth opportunities ahead.”
The Company continues to improve its financial position through voluntary payments toward debt, and has paid down over $80.5 million of its secured term loan since it started its debt payment plan on July 1, 2012, with $26.4 million paid in fiscal year 2014 alone. “We continued to improve our financial position again this fiscal year with additional, voluntary reductions in our debt levels,” said Jon Otterberg, Chief Financial Officer of Neebo, Inc. “The costing investigation is now complete, and we are well-positioned to enhance our positive operating results as we continue to execute on our growth strategies in fiscal year 2015 and beyond.”
Fiscal Fourth Quarter 2014 Results
Fiscal fourth quarter
2014 revenue declined by $10.0 million, primarily in the College Stores
Division, resulting from decreased new and used textbook sales and
general merchandise sales, partially offset by increased rental revenue.
The decline in sales can be attributed in part to conversions to the
Company’s rental program, which led to a decrease in fiscal fourth
quarter 2014 revenue due to the lower prices for rental versus sale and
the longer period over which rental revenue is recognized. Rental
adjusted same store sales (SSS) for its on-campus and off-campus stores
were down (4.7%) and (20.0%), respectively. The Company continues to
evaluate the individual performance of its off-campus store fleet.
In addition, severe weather in January and February 2014 impacted the Company’s College Stores Division results, as on-campus and off-campus stores experienced 284 total days of store closings in fiscal year 2014, as compared to 64 days during fiscal year 2013. Overall, the Company realized rental unit penetration increases in both its on- and off-campus stores during the spring back-to-school (BTS) season, up 14.0 percent points (from 17.6% to 31.7%) in its on-campus stores and 4.4 percent points (from 55.5% to 59.9%) in its off-campus fleet. Total unit rental penetration was 42.3 percent after spring BTS, versus 33.6 percent in the prior comparable period, up 8.7 percent points.
Fiscal fourth quarter 2014 Adjusted EBITDA decreased $10.3 million, from $13.5 million to $3.2 million. College Stores Division Adjusted EBITDA comprised the majority of the decline, decreasing by $7.7 million over the comparable quarter, primarily resulting from changes in certain accounting methodologies and system corrections due to the costing investigation described below. Excluding the aggregate $5.4 million decline resulting from such accounting changes and corrections, College Stores Division fourth quarter Adjusted EBITDA declined by $2.3 million, as a result of lower sales, partially offset by lower SG&A cost. Although fiscal fourth quarter 2014 SG&A costs were lower versus the comparable period, fiscal fourth quarter 2014 SG&A was negatively impacted by $1.4 million in additional advertising expenses previously reported in third quarter fiscal 2013. This adjustment, resulting from a change in the way the Company pays for advertising, inflated fourth quarter fiscal 2014 SG&A costs; however, total advertising expenses remained constant in fiscal year 2014 versus fiscal year 2013.
The remaining $2.6 million of the total fiscal fourth quarter 2014 Adjusted EBITDA variance resulted primarily from $1.4 million in lower Textbooks Division Adjusted EBITDA, caused by lower sales and the commission impact on fourth quarter fiscal 2014 versus the comparable quarter. Complementary Services Adjusted EBITDA decreased $0.4 million as a result of lower sales, and experienced a $0.7 million negative impact from intercompany eliminations changes year over year. Fiscal fourth quarter 2014 Corporate Administration costs increased by $0.1 million over the comparable period, a reflection of the investment in the Business Intelligence team, offset by cost control. In fourth quarter fiscal 2014, the Company also voluntarily pre-paid $6.4 million on its Term Loan, reducing the balance to $6.2 million at March 31, 2014, with approximately $80.5 million paid since July 1, 2012.
Fiscal Year 2014 Earnings
Total Revenue declined by $36.1
million, primarily driven by conversion of sales to rentals and lower
SSS in the College Stores Division. Overall, rental unit penetration
increased to 35.9 percent for fiscal year 2014 versus 30.7 percent for
fiscal year 2013. As discussed above, severe weather during Spring BTS
increased the number of days stores were closed by over 300 percent.
Textbooks Division revenue declined $10 million and was impacted by
lower sales to internal and external customers offset by sales through
the Company’s ExcellenText and Net Textstore online segments.
Fiscal year 2014 Adjusted EBITDA decreased by $7.6 million, to $30.9 million (7.7% of sales) from $38.5 million (8.8% of sales) at fiscal year 2013. Fiscal year 2013 Adjusted EBITDA was revised downward from $40.6 million to $38.5 million in connection with the costing investigation as further described below.
Of the decrease in fiscal 2014 Adjusted EBITDA, $3.3 million resulted from lower Textbooks Division sales, as the gross margin and EBITDA percentage remained relatively constant from fiscal year 2014 to fiscal year 2013, at 42 percent and 27 percent, respectively. College Stores Division Adjusted EBITDA decreased by $0.9 million during fiscal year 2014 as compared to the prior year as higher gross margin was offset by declining sales and increased SG&A expenses as a percentage of sales. Complementary Services Adjusted EBITDA decreased by $0.8 million from lower sales and divisional cost reclassification. Corporate Administration expenses increased by $1.1 million from investments in personnel and cost reclassifications, and intercompany eliminations negatively impacted Adjusted EBITDA by $1.5 million year over year.
Fiscal Third Quarter 2014 Earnings Revision
Concurrently
with publishing these financial statements for the fiscal year ended
March 31, 2014, the Company is also revising its previously published
financial statements for the three and nine months ended December 31,
2013. As a result of the Company’s investigation of costing issues, the
Company refined the methodology for calculating rental depreciation in
its College Stores Division and adjusted the capitalization of
commissions realized on interdivision purchases and sales in its
Textbooks Division. In conjunction with revising fiscal third quarter
2014, the Company is withdrawing its Management’s Discussion and
Analysis for the three and nine months ended December 31, 2013.
Investors are urged to review the Management’s Discussion and Analysis
for fiscal year 2014 that the Company is issuing today. Revenue for the
fiscal third quarter 2014 was not impacted, and the change had no
material impact on cash flow from operations. The following table
reconciles EBITDA to Adjusted EBITDA, as revised, to the numbers
originally disclosed:
($ in 000’s) | Three months ended December 31, 2013 | ||||||||||
Adjusted | |||||||||||
Revenue | EBITDA | EBITDA | |||||||||
As previously reported | 64,632 | (2,194 | ) | (242 | ) | ||||||
Rental Depreciation (Note 1) | 2,164 | 2,164 | |||||||||
Inventory Obsolescence - College Stores (Note 2) | (16 | ) | 360 | ||||||||
Textbooks Commissions (Note 3) | 983 | 983 | |||||||||
Inventory Obsolescence - Textbooks (Note 4) | (81 | ) | 52 | ||||||||
Discontinued operations (Note 5) | 23 | - | |||||||||
Other Miscellaneous One-Time Costs | - | - | 209 | ||||||||
Total Adjustments | - | 3,073 | 3,768 | ||||||||
As revised | 64,632 | 879 | 3,526 | ||||||||
Note 1) During the investigation of costing issues, the Company refined
its methodology for calculating rental depreciation to more
appropriately reflect the life cycle of textbook rentals.
Note 2)
and Note 4) The inventory obsolescence adjustment represents a
refinement to the factors used in estimating the reserve that more
accurately reflects the Company's historical experience.
Note 3)
The Textbooks Division commissions adjustment represents an accounting
methodology change commencing at the beginning of fiscal year 2014 to
more accurately record the capitalization of commissions related to all
internal sales and returns.
Note 5) Impact of closed stores moved
to discontinued operations in fiscal third quarter 2014.
Fiscal Second Quarter 2014 Earnings Revision
Concurrently
with publishing these financial statements for the fiscal year ended
March 31, 2014, the Company is also revising its previously published
financial statements for the three and six months ended September 30,
2013. As a result of the Company’s investigation of costing issues, the
Company refined the methodology for calculating rental depreciation in
its College Stores Division and adjusted the capitalization of
commissions realized on interdivision purchases and sales in its
Textbooks Division. In conjunction with revising fiscal second quarter
2014, the Company is withdrawing its Management’s Discussion and
Analysis for the three and six months ended September 30, 2013.
Investors are urged to review the Management’s Discussion and Analysis
for fiscal year 2014 that the Company is issuing today. Revenue for the
fiscal second quarter 2014 was not impacted, and the change had no
material impact on cash flow from operations. The following table
reconciles EBITDA to Adjusted EBITDA, as revised, to the numbers
originally disclosed:
($ in 000’s) | Three months ended September 30, 2013 | ||||||||||
Adjusted | |||||||||||
Revenue | EBITDA | EBITDA | |||||||||
As previously reported | 161,222 | 26,103 | 25,565 | ||||||||
Rental Depreciation (Note 1) | (378 | ) | (378 | ) | |||||||
Inventory Obsolescence - College Stores (Note 2) | 177 | 491 | |||||||||
Textbooks Commissions (Note 3) | 604 | 604 | |||||||||
Inventory Obsolescence - Textbooks (Note 4) | 112 | 291 | |||||||||
Discontinued operations (Note 5) | (24 | ) | - | ||||||||
Other Miscellaneous One-Time Costs | - | 183 | |||||||||
Total Adjustments | - | 491 | 1,191 | ||||||||
As revised | 161,222 | 26,594 | 26,756 | ||||||||
Note 1) During the investigation of costing issues, the Company refined
its methodology for calculating rental depreciation to more
appropriately reflect the life cycle of textbook rentals.
Note 2)
and Note 4) The inventory obsolescence adjustment represents a
refinement to the factors used in estimating the reserve that more
accurately reflects the Company's historical experience.
Note 3)
The Textbooks Division commissions adjustment represents an accounting
methodology change commencing at the beginning of fiscal year 2014 to
more accurately record the capitalization of commissions related to all
internal sales and returns.
Note 5) Impact of closed stores moved
to discontinued operations in fiscal second quarter 2014.
Investigation of Costing Issues
The Company has now
completed its investigation of certain costing issues within its
inventory system, as well as overall accounting policies and procedures.
The five month investigation, which included significant assistance from
a top accounting firm, examined areas including, but not limited to: the
cost transfer between the IT systems and the accounting system for
rentals and sales, related systems and operational processes involved,
rental depreciation methodologies, deferred revenue and cost
recognition, accrual levels for invoices and credits, obsolescence
reserve and overhead capitalization policies and methodologies,
accounting for intercompany eliminations, and intercompany merchandise
transfers and sales.
As a result of this investigation, the Company modified certain estimates such as inventory obsolescence and rental depreciation. Based on extensive research on textbook lifecycles, the Company modified its rental depreciation methodologies. This accounting change recognized additional rental gross margin in the fiscal third quarter 2014, with the majority of this increase offset by increased cost of $3.5 million in the used sale gross margin, recognized in fiscal fourth quarter 2014. In addition, during the costing investigation the Company discovered a system issue that occurred when a book was rented from one store and sourced from another, which resulted in a rental inventory value issue. The Company also discovered a system issue that occurred when its guest services team modified a rental record, and the modification was not captured in the costing system, which resulted in a rental inventory value issue. Both issues were addressed in fourth quarter fiscal 2014, resulting in a $1.9 million negative impact to gross profit. In addition, the Company identified $2.5 million of expense which should have been recorded in fiscal year 2013, and therefore revised fiscal year 2013 Adjusted EBITDA downward from $40.6 million to $38.5 million to reflect this change. This $2.5 million downward adjustment to fiscal year 2013 Adjusted EBITDA was offset by the $0.4 million impact to discontinue operations to reflect store closures in fiscal year 2014.
The investigation is now complete, and at this time the Company does not believe any further adjustments will be necessary. However, the Company has requested additional time to release the results for fiscal first quarter 2015 and a majority of the lenders under its working capital and term loan facilities, as well as a majority of the holders of its senior secured notes, have agreed to extend the deadline for delivery of the Company’s fiscal first quarter 2015 financials from August 29, 2014 to September 29, 2014. Once finalized, fiscal first quarter 2015 results will be shared via a quarterly earnings conference call, press release, and on the Company’s website.
In Process of Negotiating ABL
The Company continues to make
progress toward refinancing its working capital facility. In the
meantime, the Company has agreed with its existing lenders to extend its
credit facility through December 31, 2014. The Company believes that it
has adequate liquidity to meet its cash needs during this period. In
addition, the Company continues to investigate the options available to
lower its cost of capital.
The following table presents selected financial data for continuing operations as of and for the year ended March 31, 2014 and 2013 ($ in 000’s):
Twelve months ended | ||||||||||||||
Percent | ||||||||||||||
March 31, 2014 | March 31, 2013 | Change | ||||||||||||
Total assets | $ | 238,323 | $ | 295,175 | (19.3 | )% | ||||||||
Long-term debt | 118,538 | 133,451 | (11.2 | )% | ||||||||||
Revenues, net of returns | 400,472 | 436,578 | (8.3 | )% | ||||||||||
Adjusted EBITDA** | 30,878 | 38,444 | (19.7 | )% | ||||||||||
Adjusted EBITDA Margin | 7.7 | % | 8.8 | % | ||||||||||
Net cash flows from operating activities | 29,003 | 21,576 | 34.4 | % | ||||||||||
Net cash flows used in investing activities | (8,442 | ) | (8,251 | ) | 2.3 | % | ||||||||
Net cash used in financing activities | (36,014 | ) | (94,031 | ) | (61.7 | )% | ||||||||
* Not meaningful
** Adjusted EBITDA is a non-GAAP
financial measure. See additional disclosure below.
Conference Call
Management will hold a conference call
Thursday September 4, 2014, from 9:00 a.m. to 9:30 a.m. CDT to report
the Company’s fiscal year 2014 fourth quarter and year-end financial
results.
To participate in the conference call, interested parties should call 800-230-1085 or 612-234-9959 (international) and dial in 10 minutes prior to the start time of the call. The participant access code is 334180.
A replay of the conference call will be available from September 4, 2014, at 11:00 a.m. CDT through September 18, 2014, at 11:59 p.m. CDT. To access the replay, callers should dial 800-475-6701 or 320-365-3844 (international) and use access code 334180.
The audited consolidated financial statements as of and for the year ended March 31, 2014, 2013 and 2012 are located on the Financial Filings page of the Company’s website at http://www.nebook.com/financial/company_filings.asp.
+Neebo, Inc. common stock is not listed, traded or quoted on any U.S. stock exchange but is quoted on the OTC Pink Market under the symbol NEEB.
About the Company
Neebo, Inc. is the beneficial owner of
Nebraska Book Company, Inc., which began in 1915 with a single college
store near the University of Nebraska campus and now operates more than
215 stores, serving more than 2 million students at colleges and
universities nationwide. Nebraska Book Company, Inc. sells and rents
more than 7.8 million textbooks annually and supports technology
platforms and e-commerce sites at more than 1,200 bookstore locations.
Additional information about Nebraska Book Company, Inc. can be found at
the Company’s website: http://www.nebook.com.
Notice Regarding Forward-Looking Statements
This press
release contains forward-looking statements that involve risks and
uncertainties, as well as assumptions that, if they do not fully
materialize or prove incorrect, could cause the Company’s business and
results of operations to differ materially from those expressed or
implied by such forward-looking statements. Such forward-looking
statements include statements that discuss management’s beliefs and
assumptions and can be identified by the use of words such as “will,”
“may,” “should,” “expects,” “plans,” “anticipates,” “believes,”
“estimates,” “predicts,” “intends,” “potential,” “continue” or the
negative of such terms, or other comparable terminology. These
forward-looking statements, which include the Company’s plans and
expectations related to growth opportunities, generating sales,
improving the Company’s financial position and operating results and
refinancing its working capital facility, the Company’s beliefs related
to further adjustments to its financial statements based on its recent
investigation of costing issues, whether the Company has sufficient
liquidity to meet its cash needs, and the anticipated release of the
Company’s results for the first quarter of fiscal year 2015, speak only
as of the date of this press release. The Company undertakes no
obligation to update or revise publicly any forward-looking statements,
whether as a result of new information, future events or otherwise,
except to the extent required by applicable law. Additional information
regarding forward-looking statements, as well as risks and uncertainties
that may affect results and could cause results to differ materially
from those expressed in such forward-looking statements, is contained in
the Management’s Discussion and Analysis that was posted on the
Company’s website today.
Selected Financial Data
The information contained herein is
more fully detailed and explained in the Company’s Audited
Consolidated Financial Statements and Management’s Discussion and
Analysis, which are available at http://www.nebook.com/financial/company_filings.asp.
Consolidated Statement of Operations ($ in 000’s) |
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Three months ended | Twelve months ended | |||||||||||||||||||||||||||||
Successor | Successor | Predecessor | Non-GAAP | |||||||||||||||||||||||||||
twelve months | nine months | three months | twelve months | |||||||||||||||||||||||||||
ended | ended | ended | ended | |||||||||||||||||||||||||||
March 31, | March 31, | March 31, | March 31, | June 30, | March 31, | |||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2012 | 2013 | |||||||||||||||||||||||||
Revenues, net of returns | $ | 116,013 | $ | 126,532 | $ | 400,472 | $ | 374,343 | $ | 62,235 | $ | 436,578 | ||||||||||||||||||
Costs of sales | 80,211 | 72,968 | 246,387 | 214,038 | 39,099 | 253,137 | ||||||||||||||||||||||||
Gross profit | 35,802 | 53,564 | 154,085 | 160,305 | 23,136 | 183,441 | ||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||
Selling, general, and administrative | 36,616 | 44,460 | 133,580 | 119,829 | 28,509 | 148,338 | ||||||||||||||||||||||||
Depreciation | 1,562 | 1,790 | 6,480 | 5,132 | 1,461 | 6,593 | ||||||||||||||||||||||||
Amortization | 2,267 | 1,624 | 8,846 | 6,115 | 2,033 | 8,148 | ||||||||||||||||||||||||
40,445 | 47,874 | 148,906 | 131,076 | 32,003 | 163,079 | |||||||||||||||||||||||||
Income (loss) from operations | (4,643 | ) | 5,690 | 5,179 | 29,229 | (8,867 | ) | 20,362 | ||||||||||||||||||||||
Other (income) expenses: | ||||||||||||||||||||||||||||||
Interest expense | 5,359 | 6,431 | 39,676 | 22,029 | 8,350 | 30,379 | ||||||||||||||||||||||||
Interest income | (61 | ) | (121 | ) | (10 | ) | (48 | ) | (14 | ) | (62 | ) | ||||||||||||||||||
5,298 | 6,310 | 39,666 | 21,981 | 8,336 | 30,317 | |||||||||||||||||||||||||
Income (loss) before reorganization items and income taxes |
(9,941 | ) | (620 | ) | (34,487 | ) | 7,248 | (17,203 | ) | (9,955 | ) | |||||||||||||||||||
Reorganization items | — | (2,910 | ) | — | (4,218 | ) | (275,466 | ) | (279,684 | ) | ||||||||||||||||||||
Income (loss) from continuing operations before income taxes |
(9,941 | ) | 2,290 | (34,487 | ) | 11,466 | 258,263 | 269,729 | ||||||||||||||||||||||
Income tax expense (benefit) |
6,334 |
436 | (3,097 | ) | 4,279 | — | 4,279 | |||||||||||||||||||||||
Income (loss) from continuing operations |
(16,275 |
) | 1,854 | (31,390 | ) | 7,187 | 258,263 | 265,450 | ||||||||||||||||||||||
Income (loss) from discontinued operations, net of tax |
(1,553 |
) | (2,495 | ) | (3,117 | ) | (2,248 | ) | (1,976 | ) | (4,224 | ) | ||||||||||||||||||
Net income (loss) | $ |
(17,828 |
) | $ | (641 | ) | $ | (34,507 | ) | $ | 4,939 | $ | 256,287 | $ | 261,226 | |||||||||||||||
Net Revenues by Segment ($ in 000’s) |
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Three months ended | Twelve months ended | |||||||||||||||||||||||||||
Successor | Successor | Predecessor | Non-GAAP | |||||||||||||||||||||||||
twelve months | nine months | three months | twelve months | |||||||||||||||||||||||||
Successor | Successor | ended | ended | ended | ended | |||||||||||||||||||||||
March 31, | March 31, | March 31, | March 31, | June 30, | March 31, | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2012 | 2013 | |||||||||||||||||||||||
College Stores | $ | 86,305 | $ | 96,755 | $ | 275,610 | $ | 266,698 | $ | 38,178 | $ | 304,876 | ||||||||||||||||
Textbooks | 22,824 | 23,359 | 127,960 | 111,786 | 25,885 | 137,671 | ||||||||||||||||||||||
Complementary Services | 4,330 | 5,699 | 19,263 | 18,420 | 4,984 | 23,404 | ||||||||||||||||||||||
Intercompany eliminations | 2,555 | 720 | (22,361 | ) | (22,561 | ) | (6,812 | ) | (29,373 | ) | ||||||||||||||||||
Total net revenues | $ | 116,013 | $ | 126,532 | $ | 400,472 | $ | 374,343 | $ | 62,235 | $ | 436,578 | ||||||||||||||||
Gross Profit by Segment ($ in 000’s) |
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Three months ended | Twelve months ended | |||||||||||||||||||||||||
Successor | Successor | Predecessor | Non-GAAP | |||||||||||||||||||||||
twelve months | nine months | three months | twelve months | |||||||||||||||||||||||
Successor | Successor | ended | ended | ended | ended | |||||||||||||||||||||
March 31, | March 31, | March 31, | March 31, | June 30, | March 31, | |||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2012 | 2013 | |||||||||||||||||||||
College Stores | $ | 22,396 | $ | 34,216 | $ | 90,540 | $ | 93,060 | $ | 13,666 | $ | 106,726 | ||||||||||||||
Textbooks | 6,488 | 10,666 | 53,694 | 56,272 | 9,055 | 65,327 | ||||||||||||||||||||
Complementary Services | 1,895 | 2,869 | 9,237 | 8,997 | 2,513 | 11,510 | ||||||||||||||||||||
Intercompany eliminations | 5,022 | 5,813 | 614 | 1,976 | (2,098 | ) | (122 | ) | ||||||||||||||||||
Total gross profit | $ | 35,802 | $ | 53,564 | $ | 154,085 | $ | 160,305 | $ | 23,136 | $ | 183,441 | ||||||||||||||
EBITDA and Adjusted EBITDA ($ in 000’s) |
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Three months ended | Twelve months ended | |||||||||||||||||||||||||||||
Successor | Successor | Predecessor | Non-GAAP | |||||||||||||||||||||||||||
twelve months | nine months | three months | twelve months | |||||||||||||||||||||||||||
Successor | Successor | ended | ended | ended | ended | |||||||||||||||||||||||||
March 31, | March 31, | March 31, | March 31, | June 30, | March 31, | |||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2012 | 2013 | |||||||||||||||||||||||||
EBITDA |
||||||||||||||||||||||||||||||
Net income (loss) | $ |
(17,828 |
) | $ | (641 | ) | $ | (34,507 | ) | $ | 4,939 | $ | 256,287 | $ | 261,226 | |||||||||||||||
Interest expense, net | 5,298 | 6,310 | 39,666 | 21,981 | 8,336 | 30,317 | ||||||||||||||||||||||||
Provision (benefit) for income taxes |
6,333 |
436 | (3,097 | ) | 4,279 | — | 4,279 | |||||||||||||||||||||||
Depreciation | 1,562 | 1,790 | 6,480 | 5,132 | 1,461 | 6,593 | ||||||||||||||||||||||||
Amortization | 2,267 | 1,624 | 8,846 | 6,115 | 2,033 | 8,148 | ||||||||||||||||||||||||
EBITDA |
(2,368 |
) | 9,519 | 17,388 | 42,446 | 268,117 | 310,563 | |||||||||||||||||||||||
Adjusted EBITDA |
||||||||||||||||||||||||||||||
EBITDA |
(2,368 |
) | 9,519 | 17,388 | 42,446 | 268,117 | 310,563 | |||||||||||||||||||||||
Reorganization professional fees | — | (2,910 | ) | — | (4,218 | ) | 13,382 | 9,164 | ||||||||||||||||||||||
Gain on settlement of liabilities subject to compromise |
— | — | — | — | (288,848 | ) | (288,848 | ) | ||||||||||||||||||||||
Fresh start adjustments | — | (1,318 | ) | — | (10,511 | ) | — | (10,511 | ) | |||||||||||||||||||||
Discontinued operations |
1,553 |
2,495 | 3,117 | 2,248 | 1,976 | 4,224 | ||||||||||||||||||||||||
Severance and voluntary costs | 283 | 76 | 1,012 | 322 | 230 | 552 | ||||||||||||||||||||||||
Site closures, settlements and other costs | — | 118 | — | 166 | 533 | 699 | ||||||||||||||||||||||||
Share-based compensation | 58 | 111 | 235 | 111 | 8 | 119 | ||||||||||||||||||||||||
Other miscellaneous one-time costs | 3,640 | 5,467 | 9,126 | 10,225 | 2,257 | 12,482 | ||||||||||||||||||||||||
Adjusted EBITDA | $ | 3,166 | $ | 13,558 | $ | 30,878 | $ | 40,789 | $ | (2,345 | ) | $ | 38,444 | |||||||||||||||||
The following table provides Adjusted EBITDA on a segment basis ($ in 000’s) |
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twelve months | nine months | three months | twelve months | |||||||||||||||||||||||||||
Successor | Successor | ended | ended | ended | ended | |||||||||||||||||||||||||
March 31, | March 31, | March 31, | March 31, | June 30, | March 31, | |||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2012 | 2013 | |||||||||||||||||||||||||
College Stores | $ | 247 | $ | 7,976 | $ | 10,088 | $ | 13,360 | $ | (2,397 | ) | $ | 10,963 | |||||||||||||||||
Textbooks | 1,303 | 2,676 | 34,394 | 33,369 | 4,294 | 37,663 | ||||||||||||||||||||||||
Complementary Services | (125 | ) | 296 | (345 | ) | 533 | (102 | ) | 431 | |||||||||||||||||||||
Corporate Administration | (3,375 | ) | (3,234 | ) | (13,273 | ) | (9,674 | ) | (2,536 | ) | (12,210 | ) | ||||||||||||||||||
Intercompany Eliminations | 5,116 | 5,844 | 14 | 3,201 | (1,604 | ) | 1,597 | |||||||||||||||||||||||
Total adjusted EBITDA | $ | 3,166 | $ | 13,558 | $ | 30,878 | $ | 40,789 | $ | (2,345 | ) | $ | 38,444 | |||||||||||||||||
Non-GAAP Financial Information
The common definition of
EBITDA is “Earnings before Interest, Taxes, Depreciation and
Amortization.” In evaluating financial performance, the Company uses
Adjusted EBITDA to evaluate, assess and benchmark its operational
results. The Company’s definition of Adjusted EBITDA is EBITDA plus
adjustments to exclude the effects of certain items of revenue or gain
and expense or loss.
EBITDA and Adjusted EBITDA are not measures of financial performance under generally accepted accounting principles (“GAAP”). They should not be considered in isolation or as a substitute for net income (loss) in accordance with GAAP. EBITDA and Adjusted EBITDA exclude components that are significant in understanding and assessing our results of operations and cash flows. In addition, the Company’s measure of Adjusted EBITDA, as presented in this press release, may not be comparable to similarly titled measures used by other companies.
However, EBITDA and Adjusted EBITDA are presented, as management believes the measures are relevant and useful information widely used by analysts, investors and other interested parties in our industry. The Company understands certain investors use them to measure the Company’s operating performance. Accordingly, management is disclosing this information to permit a more comprehensive analysis of the Company’s operating performance and to provide an additional measure of performance. EBITDA and Adjusted EBITDA financial information are reconciled to net income (loss).