Core Insights - Barnes & Noble Education, Inc. (BNED) has announced partnerships with over 20 new institutions for campus store operations, more than doubling the number added during the same period in the previous two years [1][5] - The growing demand for Barnes & Noble College's (BNC) innovative and customer-focused solutions reflects colleges' needs for improved access, affordability, and omnichannel retail experiences [2][4] Company Overview - BNC is redefining the collegiate retail experience through a partnership model that enhances institutional success and academic excellence, supported by BNED's financial strength [3][4] - The company provides personalized support, on-campus expertise, and a community-focused service model to its partners [3][4] New Partnerships - The new partnerships span 17 states and include a mix of two- and four-year public and private colleges, with notable institutions such as Villanova University and Georgia Southern University [5] - More than half of the new institutions will implement BNC's First Day Complete program, an affordable access initiative, starting Fall Term 2025 [6] Unique Capabilities - BNC offers unmatched access to affordable course materials, a large selection of print and digital formats, and innovative omnichannel retail experiences [8] - The company utilizes technology to support students and faculty, including seamless course material delivery and various educational tools [8]

Business Operations - Barnes & Noble Education, Inc. operates 1,164 physical and virtual bookstores, serving college and university campuses and K-12 institutions across the U.S.[147] - The company has streamlined operations into one reporting segment to better reflect its management structure and resource allocation[160]. - The company opened 49 stores and closed 130 stores during the 39 weeks ended January 25, 2025, with estimated net annual sales of $159 million[178]. Financial Performance - In Fiscal 2024, the BNC First Day Complete sales reached $141.8 million, a 29.5% increase from $109.5 million in Fiscal 2023, while total BNC First Day sales increased by 20.8% to $222.2 million[153]. - Total sales for the 13 weeks ended January 25, 2025, were $466.3 million, a slight increase from $456.7 million in the same period of 2024, while total sales for the 39 weeks ended January 25, 2025, remained stable at $1.33 billion compared to $1.33 billion in 2024[170]. - Gross profit for the 13 weeks ended January 25, 2025, was $96.4 million, down from $100.0 million in the same period of 2024, and for the 39 weeks, gross profit decreased to $281.2 million from $286.9 million[170]. - Net income from continuing operations for the 13 weeks ended January 25, 2025, was $7.1 million, compared to a loss of $9.9 million in the same period of 2024, while the net loss for the 39 weeks was $42.6 million, an increase from a loss of $35.0 million in 2024[170]. - Total revenue for the 13 weeks ended January 25, 2025, increased by 2.1%, or $9.7 million, to $466.3 million compared to the same period last year[175]. - Income from Continuing Operations surged by $27.5 million, or 283.3%, to $17.8 million compared to a loss of $(9.7) million in the prior year[175]. - Adjusted EBITDA from Continuing Operations improved by $6.3 million, or 29.8%, to $27.4 million from $21.1 million last year[175]. Enrollment and Market Trends - The estimated enrollment for institutions adopting the First Day Complete program increased by 18.9%, from 805,000 to 957,000 students[153]. - The company observed increased year-over-year enrollment trends in Fall 2023 and Spring 2024, particularly at community colleges, which are correlated with economic conditions and unemployment rates[164]. - The company plans to scale the number of schools adopting the First Day Complete program in Fiscal 2025 and beyond, aiming to improve student outcomes and increase market share[153]. Cost Management and Competition - The company continues to face significant price competition in the textbook and course materials market, with students being highly price sensitive[169]. - The company is experiencing growing competition from alternative sources of textbooks and course materials, impacting traditional bookstore sales[164]. - Selling and administrative expenses decreased by $31.7 million, or 13.0%, to $211.5 million for the 39 weeks ended January 25, 2025, primarily due to a decrease in payroll and related operating costs[192]. Debt and Financing - The company raised approximately $95.0 million in new equity capital through a $50.0 million private investment and a $45.0 million rights offering, enhancing financial flexibility[156]. - A term loan debt conversion resulted in a loss of $55.2 million, with $34.0 million of outstanding principal converted into common stock[156]. - The refinanced credit facility provides access to $325.0 million, maturing in 2028, which is expected to reduce annual interest expenses[156]. - The company recognized a loss on extinguishment of debt of $55.2 million during the 39 weeks ended January 25, 2025, due to the conversion of approximately $34.0 million of outstanding principal and interest into Common Stock[199]. Cash Flow and Capital Expenditures - Free Cash Flow for the 39 weeks ended January 25, 2025, was $(160.3) million, compared to $(114.6) million for the same period in 2024, indicating a 39.9% increase in cash outflows[216]. - Total Capital Expenditures for the 39 weeks ended January 25, 2025, were $9.3 million, down from $11.5 million in the same period in 2024, a decrease of 19.1%[224]. - Cash flows provided by financing activities for the 39 weeks ended January 25, 2025, were $135.2 million, compared to $59.9 million in the prior year, a significant increase of $75.3 million[225]. Tax and Income - The company recorded an income tax expense of $10.7 million on pre-tax income of $17.8 million for the 13 weeks ended January 25, 2025, resulting in an effective tax rate of 60.0%[205]. - The effective tax rate for the 39 weeks ended January 25, 2025, was (38.8)%, with an income tax expense of $11.9 million on a pre-tax loss of $(30.7) million[206].

Financial Performance - Total sales for the 13 weeks ended January 25, 2025, were $466.3 million, a slight increase from $456.7 million for the same period in 2024, representing a growth of 1.4%[2] - Gross profit for the 39 weeks ended January 25, 2025, was $281.2 million, down from $286.9 million in 2024, reflecting a decrease of 2.3%[2] - The company reported a net income of $7.1 million for the 13 weeks ended January 25, 2025, compared to a net loss of $9.6 million for the same period in 2024[2] - Adjusted EBITDA for the 39 weeks ended January 25, 2025, was $72.7 million, up from $46.3 million in 2024, showing an increase of 56.9%[7] - The net loss from continuing operations for the 39 weeks ended January 25, 2025, was $42,632,000, compared to a loss of $35,045,000 for the same period in 2024[18] Expenses and Liabilities - Selling and administrative expenses decreased to $71.6 million for the 13 weeks ended January 25, 2025, down from $79.8 million in 2024, a reduction of 10.3%[2] - The total current liabilities decreased significantly from $849.6 million in January 27, 2024, to $534.7 million in January 25, 2025, a reduction of 37%[5] - The company recognized a loss on extinguishment of debt of $55.2 million related to the June 10, 2024, Term Loan debt conversion[8] Cash Flow and Investments - Free cash flow for the 39 weeks ended January 25, 2025, was $(160.3) million, compared to $(114.6) million for the same period in 2024, indicating a worsening cash flow situation[10] - Cash flows used in operating activities from continuing operations totaled $138,527,000 for the 39 weeks ended January 25, 2025, compared to $83,221,000 for the same period in 2024[18] - The company reported a net cash flow used in investing activities of $8,508,000 for the 39 weeks ended January 25, 2025, compared to a cash inflow of $10,014,000 for the same period in 2024[18] - Proceeds from borrowings for the 39 weeks ended January 25, 2025, were $667,355,000, an increase from $454,459,000 in the same period in 2024[18] - The company experienced a net decrease in cash, cash equivalents, and restricted cash of $11,843,000 for the 39 weeks ended January 25, 2025[18] - The cash, cash equivalents, and restricted cash at the end of the period for continuing operations was $16,727,000 as of January 25, 2025, compared to $15,024,000 at the end of the same period in 2024[18] Capital Expenditures - Total capital expenditures for the 39 weeks ended January 25, 2025, were $9,300,000, a decrease of 18.9% from $11,459,000 for the same period in 2024[11] - Physical store capital expenditures for the 13 weeks ended January 25, 2025, were $1,219,000, up 5.3% from $1,158,000 in the same period in 2024[11] Financial Measures - Adjusted earnings and adjusted EBITDA are used as non-GAAP financial measures to evaluate ongoing operating performance[12] - The company emphasizes the importance of reviewing GAAP financial information alongside non-GAAP measures for a complete understanding of financial performance[16] Sales Composition - The percentage of product sales and other for the 13 weeks ended January 25, 2025, was 90.7%, slightly down from 91.0% in 2024[3] Accumulated Deficit - The company’s accumulated deficit increased to $(699.2) million as of January 25, 2025, compared to $(629.2) million in 2024[5]

Core Insights - Barnes & Noble Education, Inc. (BNED) has appointed Christopher Neumann as General Counsel & Corporate Secretary and Gary Luster as Chief Accounting Officer, effective March 3, 2025 [1][2][4] Group 1: Leadership Appointments - Christopher Neumann brings extensive legal experience from Six Flags, where he led legal and corporate governance functions, including a significant $8 billion merger [2] - Neumann's background in the education sector includes serving as Vice President and Deputy General Counsel for Kaplan, enhancing his expertise in the industry [2][3] - Gary Luster has a strong accounting and finance background, having led financial transformations in large retailers, which will aid BNED in improving operational efficiencies [4][5] Group 2: Strategic Importance - The appointments of Neumann and Luster are expected to enhance BNED's leadership capabilities, driving operational improvements and aligning strategies with industry best practices [6] - Their combined expertise is anticipated to strengthen BNED's legal framework, business strategy, governance, and risk management, positioning the company for long-term growth [3][6] Group 3: Company Overview - BNED is a leading solutions provider for the education industry, focusing on affordability, access, and achievement for academic institutions and millions of students [7] - The company offers a range of services including campus retail, academic solutions, and wholesale capabilities, supporting educational advancement [7]

Core Insights - Barnes & Noble Education, Inc. (BNED) has appointed Christopher Neumann as General Counsel & Corporate Secretary and Gary Luster as Chief Accounting Officer, effective March 3, 2025 [1][6] Group 1: Leadership Appointments - Christopher Neumann brings extensive legal experience from Six Flags, where he led legal and corporate governance functions, including a significant $8 billion merger [2] - Neumann's background includes serving as Vice President and Deputy General Counsel for Kaplan, providing him with valuable insights into the education industry [2][3] - Gary Luster has a strong background in accounting and finance, having led financial transformations and implemented robust financial controls in large-scale retailers [4] - Luster's experience includes working with companies like Tiffany & Co. and Capri Holdings, which enhances his ability to navigate complex financial operations [4][5] Group 2: Strategic Importance - The appointments of Neumann and Luster are expected to strengthen BNED's legal framework, business strategy, governance, and risk management [3][6] - Their leadership is anticipated to optimize processes, mitigate risks, and align strategies with industry best practices, positioning BNED for long-term growth [6] Group 3: Company Overview - BNED is a leading solutions provider for the education industry, focusing on affordability, access, and achievement for academic institutions [7] - The company supports millions of students and offers a range of services, including campus retail and academic solutions [7]

Financial Results Announcement - Barnes & Noble Education, Inc. announced preliminary unaudited financial results for Q2 ended October 26, 2024[3] - The press release was issued on November 7, 2024, detailing the company's financial performance[3] - The financial statements and Non-GAAP reconciliation tables are included in the press release as Exhibit 99.1[3] Company Information - The company is listed on the New York Stock Exchange under the trading symbol BNED[1] - The report does not include specific financial metrics or performance indicators in the provided content[4]

Business Operations - Barnes & Noble Education operates 1,162 physical and virtual bookstores, serving over 5.7 million students[109]. - The number of campus stores increased to 183 from 157, representing a 17% growth[117]. - Estimated enrollment for the Fall 2024 semester is projected at 925,000, up 16% from 800,000 in Fall 2023[117]. - Enrollment trends showed an increase year-over-year in Fall 2023 and Spring 2024, particularly at community colleges[125]. - The company is focusing on scaling the number of schools adopting the First Day Complete strategy in Fiscal 2025 and beyond[128]. Financial Performance - Total sales for the 13 weeks ended October 26, 2024, were $602,122, a decrease of 1.9% compared to $610,379 for the same period in 2023[134]. - Gross profit for the 13 weeks ended October 26, 2024, was $137,643, an increase of 1.0% from $136,242 in the prior year[134]. - Net income from continuing operations for the 13 weeks ended October 26, 2024, was $49,735, compared to a net income of $24,854 for the same period in 2023[134]. - Adjusted EBITDA for the 13 weeks ended October 26, 2024, was $65,958, up from $51,080 in the same period last year[134]. - Total revenue for Q2 fiscal year 2025 decreased by 1.4%, or $8.3 million, to $602.1 million, primarily due to closures of underperforming stores[139]. - Year-to-date revenue for fiscal year 2025 decreased by $9.0 million, or 1.0%, to $865.6 million, also driven by store closures[141]. - The company reported an operating loss of $(35.4) million for the 26 weeks ended October 26, 2024, compared to an operating loss of $(5.9) million in the same period of 2023[164]. Sales and Revenue Growth - The BNC First Day Complete program generated sales of $166.2 million for the 13 weeks ended October 26, 2024, a 22% increase from $136.4 million in the same period last year[117]. - Total BNC First Day sales reached $235.4 million for the 13 weeks ended October 26, 2024, an 18% increase from $199.2 million in the prior year[117]. - The First Day Complete model drives greater unit sales and sell-through for bookstores, addressing market demands for reduced pricing and improved student outcomes[116]. - The First Day Complete and First Day programs are expected to continue driving market share and revenue growth, with many institutions adopting these programs in Fiscal 2024[128]. - BNC First Day programs contributed to a $55.7 million, or 21%, increase in course material sales during the year[141]. Cost Management - Selling and administrative expenses decreased to $72,940 for the 13 weeks ended October 26, 2024, from $85,961 in the prior year[138]. - Selling and administrative expenses decreased by $13.0 million, or 15.1%, to $72.9 million for the 13 weeks ended October 26, 2024, primarily due to cost savings initiatives[157]. - Total cost of sales for the 13 weeks ended October 26, 2024, was $464.5 million, or 77.1% of sales, down from 77.7% in the prior year[153]. Liquidity and Financing - The company completed various financing transactions, including a $40 million At-the-Market sales agreement, to enhance liquidity and support growth initiatives[118]. - As of October 26, 2024, the company had $28.9 million in cash on hand, including $14.9 million of restricted cash[176]. - Cash flows used in operating activities from continuing operations were $(96.6) million for the 26 weeks ended October 26, 2024, compared to $(47.2) million for the same period in 2023, an increase of $49.4 million[179]. - Cash flows provided by financing activities were $102.7 million for the 26 weeks ended October 26, 2024, compared to $41.2 million in the prior year, a net change of $61.5 million[182]. - The company may need to raise additional funds through public or private financing if available funds are insufficient for future activities[176]. Market Challenges - The company is experiencing increased competition from alternative sources for course materials, impacting traditional distribution channels[126]. - The broader macro-economic global supply chain issues may impact the company's ability to source school supplies and general merchandise[126]. - The company closed 119 stores during the 26 weeks ended October 26, 2024, with an estimated net annual sales impact of $(67) million[144].

Financial Performance - Total sales for the 13 weeks ended July 27, 2024, were $263.4 million, a slight decrease from $264.2 million in the same period last year[1] - Gross profit decreased to $47.2 million (17.9% of sales) from $50.6 million (19.2% of sales) year-over-year[1][2] - Operating loss widened significantly to $(91.7) million (34.9% of sales) from $(41.7) million (15.8% of sales) in the prior year period[1][2] - Net loss from continuing operations increased to $(99.5) million (37.9% of sales) compared to $(50.0) million (18.9% of sales) in the same period last year[1][2] - Net loss for the 13 weeks ended July 27, 2024, was $99.5 million, compared to $50.4 million in the same period last year[12] Non-GAAP Financial Metrics - Adjusted EBITDA (non-GAAP) for continuing operations improved to $(20.7) million from $(25.9) million in the prior year period[5] - Adjusted EBITDA is used by the company as a primary method for planning, forecasting, and evaluating performance, including for performance incentive plans[11] - Free Cash Flow (non-GAAP) was $(152.4) million, compared to $(130.0) million in the same period last year[7] - Free Cash Flow is highlighted as a key metric to assess cash flow available for future debt service obligations and working capital requirements[11] - The company does not provide a reconciliation of forward-looking non-GAAP financial metrics due to the unavailability of reconciling information without unreasonable effort[11] Cash Flow and Capital Expenditures - Net cash flows used in operating activities from continuing operations increased to $144.0 million in the 13 weeks ended July 27, 2024, from $119.9 million in the same period last year[12] - Proceeds from borrowings increased to $217.6 million in the 13 weeks ended July 27, 2024, compared to $145.2 million in the same period last year[12] - Net cash flows provided by financing activities increased to $139.9 million in the 13 weeks ended July 27, 2024, from $93.2 million in the same period last year[13] - Cash, cash equivalents, and restricted cash at the end of the period were $21.3 million, compared to $19.3 million in the same period last year[13] - Total capital expenditures decreased to $3.5 million from $4.2 million year-over-year, with physical store capital expenditures accounting for $1.96 million[8] Balance Sheet Changes - Total assets decreased to $1.005 billion from $1.071 billion, while total liabilities decreased to $860.8 million from $989.8 million year-over-year[3] - Stockholders' equity increased to $144.4 million from $81.1 million, primarily due to an increase in additional paid-in capital[3] Debt and Extinguishment - The company recognized a $55.2 million loss on extinguishment of debt related to the June 10, 2024 Term Loan debt conversion[6]

Business Operations - Barnes & Noble Education, Inc. operates 1,164 physical and virtual bookstores, serving over 5.7 million students[85]. - The Wholesale Segment distributes textbooks to approximately 2,650 physical bookstores and 507 virtual bookstores, making it one of the largest textbook wholesalers in the U.S.[93]. - The company plans to scale the number of schools adopting the First Day Complete program in Fiscal 2025 and beyond, following successful adoption in Fiscal 2024[92]. - Enrollment trends showed an increase year-over-year in Fall 2023 and Spring 2024, particularly at community colleges, which is expected to positively impact business growth[97]. - The company aims to enhance e-commerce capabilities through partnerships with Fanatics and Lids, driving growth in general merchandise sales[85]. Financial Performance - Total sales for the 13 weeks ended July 27, 2024, were $263.431 million, a slight decrease from $264.161 million in the same period last year[104]. - The net loss from continuing operations was $99.479 million, compared to a loss of $49.971 million in the prior year, indicating a significant increase in losses[104]. - Adjusted EBITDA for continuing operations improved to a loss of $20.680 million from a loss of $25.885 million year-over-year, showing a reduction in operational losses[104]. - The gross margin decreased to 17.9% from 19.2% year-over-year, indicating a decline in profitability[105]. - Selling and administrative expenses as a percentage of total sales were 25.4%, down from 29.3% in the previous year, suggesting improved cost management[105]. Sales and Revenue Trends - The BNC First Day affordable textbook access programs generated total sales of $81.4 million in the 13 weeks ended July 27, 2024, a 32% increase from $61.8 million in the same period in 2023[90]. - First Day Complete sales reached $34.7 million, up 36% from $25.5 million year-over-year[90]. - Course material product sales increased by $13.6 million, or 9.8%, to $152.1 million during the 13 weeks ended July 27, 2024, driven by BNC First Day programs[116]. - Total BNC First Day sales increased by $19.6 million, or 32%, to $81.4 million compared to $61.8 million in the prior year[117]. - Retail sales decreased by $4.2 million, or 1.7%, to $249.7 million during the 13 weeks ended July 27, 2024, from $245.5 million in the prior year[116]. Cost and Expenses - The cost of sales increased to 82.1% of total sales, up from 80.8% in the prior year, reflecting rising costs in merchandise and operations[105]. - Selling and administrative expenses decreased by $10.5 million, or 13.5%, to $67.0 million from $77.5 million during the same period last year[130]. - The operating loss increased to $(91.7) million, or (34.9)% of sales, compared to $(41.7) million, or (15.8)% of sales in the prior year[138]. - Net interest expense decreased by $0.6 million to $7.6 million during the 13 weeks ended July 27, 2024, primarily due to lower borrowing and interest rates[139]. Strategic Initiatives - The company is focusing on expanding its BNC First Day affordable textbook access programs, which have reversed historical revenue declines in course materials[99]. - The company anticipates continued growth from new physical and virtual store openings, driven by new account awards[99]. - The company is facing increasing competition from alternative sources for course materials, impacting traditional distribution channels[98]. - The company closed 111 stores during the 13 weeks ended July 27, 2024, as part of a strategic initiative to close under-performing locations[116]. Cash Flow and Financing - Recent financing arrangements included a private equity investment and a Credit Facility refinancing to enhance capital flexibility and support growth initiatives[91]. - Cash flows used in operating activities from continuing operations were $(143.992) million for the 13 weeks ended July 27, 2024, compared to $(119.858) million for the same period in 2023, an increase in cash outflows of 20.1%[153]. - Free cash flow (non-GAAP) for the 13 weeks ended July 27, 2024, was $(152.398) million, compared to $(129.956) million for the same period in 2023, reflecting an increase in cash outflows of 17.1%[148]. - Cash flows from financing activities increased to $139.9 million for the 13 weeks ended July 27, 2024, compared to $93.2 million in the prior year, primarily due to $95.0 million in new equity capital raised[157]. - The company completed transactions on June 10, 2024, raising approximately $85.5 million in net cash proceeds after transaction costs, enhancing financial flexibility for future investments[158]. Losses and Restructuring - The company recognized a loss on extinguishment of debt of $55.2 million related to the conversion of approximately $34.0 million of outstanding principal into common stock[136]. - The company recognized restructuring and other charges totaling $3.6 million, primarily related to severance costs following the resignation of the former CEO[137]. - Adjusted earnings (non-GAAP) were $(41.5) million during the 13 weeks ended July 27, 2024, compared to $(44.4) million in the prior year[141]. - Net loss for the same period was $(99.5) million, including a $(55.2) million loss on extinguishment of debt, compared to a net loss of $(50.0) million in the prior year[110]. Tax and Compliance - The company recognized a current income tax receivable of $15.8 million and $8.5 million in refunds for Fiscal 2023 and Fiscal 2024, respectively[159]. - The company did not identify any changes in internal control over financial reporting that materially affected its operations during the first quarter[164]. - Management believes that pending legal proceedings are unlikely to have a material adverse effect on future financial results[166].

Core Viewpoint - Purcell & Lefkowitz LLP is investigating Barnes & Noble Education, Inc. to determine if its directors breached fiduciary duties related to recent corporate actions [1]. Group 1 - The investigation is on behalf of the shareholders of Barnes & Noble Education, Inc. [1] - The law firm specializes in representing shareholders affected by securities fraud and breaches of fiduciary duty [3]. - Shareholders seeking more information can contact the firm for free [2].