Group 1 - Barnes & Noble Education (NYSE:BNED) stock experienced a significant rally of 126.3% on Friday, followed by a decline of 16.2% on Monday amid heavy trading [1][3] - The decline on Monday saw approximately 12.5 million shares traded, significantly higher than the daily average trading volume of about 3 million shares [3] - Year-to-date, BNED stock is down 76.4%, indicating a substantial decrease in value over the year [3] Group 2 - The rise in BNED stock price was influenced by Greenhaven Road Investment Management's interest in a transaction with the company, holding a 9.9% stake [2] - Greenhaven Road Investment Management previously made an $84.5 million recapitalization offer to Barnes & Noble Education, which was rejected, but the firm appears to be pursuing a deal still [2]

BASKING RIDGE, N.J.--(BUSINESS WIRE)--Barnes & Noble Education, Inc. (NYSE: BNED), a leading solutions provider for the education industry, today reported sales and earnings for the third quarter ended on January 27, 2024. Financial Results for the Third Quarter Fiscal Year 2024: Consolidated third quarter GAAP sales of $456.7 million increased by $18.6 million, compared to $438.1 million in the prior year period. The third quarter sales increase is due to higher course material sales, primarily throug ...

Financial Performance - Consolidated third quarter GAAP sales increased to $456.7 million, up $18.6 million from $438.1 million in the prior year period[3]. - First Day Complete revenue grew to $110 million, an increase of $43 million from $67 million in the prior year[7]. - Consolidated third quarter GAAP net loss from continuing operations improved to $(9.9) million, a $12.2 million improvement from $(22.1) million in the prior year[5]. - Consolidated third quarter non-GAAP Adjusted EBITDA increased to $20.3 million, up $15.1 million from $5.2 million in the prior year[12]. - Total sales for the 13 weeks ended January 27, 2024, were $456,673,000, an increase from $438,054,000 for the same period last year, representing a growth of 4.0%[41]. - The net loss for the 39 weeks ended January 27, 2024, was $35,847,000, compared to a net loss of $55,612,000 for the same period last year, showing an improvement of 35.6%[41]. - The company reported a basic and diluted loss per share from continuing operations of $(0.19) for the 13 weeks ended January 27, 2024, compared to $(0.42) for the same period last year[40]. - Total sales for the 39 weeks ended January 27, 2024, were $1,331,213 thousand, compared to $1,301,361 thousand for the same period in 2023, reflecting a growth of 2.3%[53]. - Total adjusted EBITDA for the 39 weeks ended January 27, 2024, was $43,326, up from $12,369 for the same period last year, marking an increase of 250.5%[69]. Expenses and Cash Flow - Retail selling and administrative expenses decreased by $11.4 million to $71.4 million, primarily due to cost savings initiatives[22]. - Cash flows used in operating activities from continuing operations were $(83.2) million, compared to $(21.2) million in the prior year, primarily due to changes in working capital[27]. - Selling and administrative expenses for the 13 weeks ended January 27, 2024, were $79,756,000, down from $91,841,000 for the same period last year, a decrease of 13.2%[41]. - Net cash flows used in operating activities from continuing operations for the 13 weeks ended January 27, 2024, were $(36,061) thousand, compared to $(31,321) thousand for the same period last year, indicating an increase in cash outflows[75]. - Free Cash Flow (non-GAAP) for the 39 weeks ended January 27, 2024, was $(114,590) thousand, a decline from $(40,772) thousand for the same period last year[75]. - Cash interest paid during the 39 weeks ended January 27, 2024, was $19.6 million, an increase from $13.4 million in the same period of 2023, representing a 46.3% rise[52]. Assets and Liabilities - As of January 27, 2024, cash and cash equivalents were $8.1 million, with total outstanding debt of $254.3 million[30]. - Total current assets decreased to $763,651,000 as of January 27, 2024, down from $813,674,000 as of January 28, 2023, reflecting a decline of 6.1%[45]. - Total liabilities decreased to $1,054,464,000 as of January 27, 2024, from $1,102,877,000 as of January 28, 2023, a reduction of 4.4%[45]. - The company’s cash and cash equivalents decreased to $8,123,000 as of January 27, 2024, from $9,423,000 as of January 28, 2023, a decline of 13.8%[45]. - Total debt as of January 27, 2024, is $254,258, down from $283,857 as of January 28, 2023, representing a decrease of approximately 10.4%[58]. Strategic Initiatives and Guidance - The company is maintaining its fiscal year 2024 guidance of approximately $40 million of consolidated non-GAAP Adjusted EBITDA from Continuing Operations[33]. - The company is engaged in discussions to strengthen its liquidity, including potential refinancing and equity offerings[31]. - The company emphasizes the importance of Free Cash Flow for meeting future debt service obligations and working capital requirements[78]. Market and Operational Insights - Total Retail segment gross comparable store sales increased by 8.8%, with course material sales up 14.1% and general merchandise sales down 4.6%[8]. - The percentage of product sales to total sales increased to 91.0% for the 13 weeks ended January 27, 2024, compared to 89.9% for the same period last year[43]. - The company opened 10 new stores during the 39 weeks ended January 27, 2024, while closing 59 stores, resulting in a net decrease in store count[64]. - The company reported a total of 1,272 stores at the end of the period, including 555 virtual stores, compared to 1,388 total stores at the end of the previous year[64]. - Estimated enrollment for the 2023 academic year is 805,000 students, an increase from 580,000 in the previous year[67]. Risks and Challenges - The company faces risks related to competition, regulatory changes, and operational dependencies that could impact future performance[80]. - The strategic objectives and anticipated benefits of various initiatives may not be fully realized or may take longer than expected[80].

Revenue and Sales Performance - BNC First Day total revenue increased by $136 million, or 44%, to $445 million for the 39 weeks ended January 27, 2024, compared to $309 million in the prior year period [207]. - Total sales for the 13 weeks ended January 27, 2024, reached $456.7 million, up 4.3% from $438.1 million in the same period last year [229]. - Total sales for the 39 weeks ended January 27, 2024, reached $1.33 billion, up from $1.30 billion for the same period in 2023, reflecting a growth of 2% [250]. - Retail sales increased by $27.9 million, or 2.2%, to $1,284.2 million during the 39 weeks ended January 27, 2024, compared to $1,256.3 million during the same period last year [263]. - First Day Complete Sales reached $271.5 million for the 39 weeks ended January 27, 2024, a 57% increase from $173.4 million in the prior year [234]. - Total BNC First Day Sales increased to $445.1 million, up 44% from $309.1 million year-over-year [234]. Enrollment and Market Expansion - Estimated enrollment for BNC First Day programs rose to 805,000, a 39% increase from 580,000 in the previous year [210]. - The number of campus stores grew to 160, representing a 38% increase from 116 stores in the previous year [234]. - The company plans to continue scaling the First Day Complete strategy, with many institutions adopting it in Fiscal 2024 and further expansion expected in Fiscal 2025 [209]. Profitability and Expenses - Gross profit for the Retail Segment was $88.9 million for the 13 weeks ended January 27, 2024, with total cost of sales at $332.3 million [227]. - The company reported a loss from continuing operations of $9.9 million for Q4 2023, an improvement from a loss of $22.1 million in Q4 2022 [250]. - Adjusted EBITDA for continuing operations was $20.3 million in Q4 2023, compared to $5.2 million in Q4 2022, indicating a significant increase [250]. - Selling and administrative expenses as a percentage of total sales decreased to 17.5% in Q4 2023 from 21.0% in Q4 2022 [251]. - The company experienced a gross profit of $100.0 million for Q4 2023, compared to $89.2 million in Q4 2022, marking a notable increase [256]. Strategic Initiatives and Partnerships - The partnership with Fanatics and Lids enhances e-commerce capabilities and product assortment, driving growth in the general merchandise business [210]. - The company is exploring strategic alternatives, including potential capital raises and asset divestitures, with no set timetable for conclusions [239]. - The company aims to improve student outcomes and increase market share through its equitable access programs, reversing historical revenue declines in course materials [209]. Cash Flow and Liquidity - The company is focused on aligning cash outflows with cash inflows as sales shift to BNC First Day equitable and inclusive access offerings [243]. - The company’s Free Cash Flow is highlighted as a key measure for understanding cash flow available for future obligations and working capital requirements [314]. - Cash flows used in operating activities from continuing operations during the 39 weeks ended January 27, 2024 were $(83.2) million, an increase of $62.0 million compared to $(21.2) million during the same period in 2023 [336]. - The company has achieved approximately $18 million in cost savings from gross capital expenditure reductions during the 39 weeks ended January 27, 2024 [332]. Risks and Challenges - The company faces risks related to the operation of its point-of-sales systems sold to college bookstores, which may impact performance [372]. - Public health crises, such as the COVID-19 pandemic, have lingering impacts on demand for the company's products and services [372]. - The company is exposed to risks from counterfeit and piracy of digital and print materials, which could affect revenue [372]. - Risks associated with changes in laws and regulations, including consumer data privacy rights, may restrict marketing activities [372]. Financial Reporting and Compliance - There have been no material changes in the company's internal control over financial reporting during the third quarter [375]. - The company's disclosure controls and procedures were deemed effective at the reasonable assurance level as of January 27, 2024 [379]. - The company has not identified any material changes in market risk disclosures since the last annual report [378].

BASKING RIDGE, N.J.--(BUSINESS WIRE)--Barnes & Noble Education, Inc. (NYSE: BNED) (“BNED” or the “Company”), a leading solutions provider for the education industry, today announced that the Company is rescheduling its third quarter fiscal year 2024 earnings press release and investor conference call previously scheduled for Thursday, March 7, 2024 at 4:30 p.m. Eastern Time. BNED intends to issue a press release announcing the new date and time of its third quarter fiscal year 2024 earnings release and con ...

BASKING RIDGE, N.J.--(BUSINESS WIRE)--Barnes & Noble Education, Inc. (NYSE: BNED), a leading solutions provider for the education industry, today announced that the Company expects to report fiscal year 2024 third quarter earnings results on Thursday, March 7, 2024, after market close. The Company will host an investor conference call at 4:30 p.m. Eastern Time on Thursday, March 7, 2024, to review the Company’s financial results and operations. This call is being webcast and can be accessed at Barnes & Nob ...

Financial Data and Key Metrics Changes - Total revenue for the second quarter was $610.4 million, an increase of $1.7 million or 0.3% year-over-year [12][26] - Adjusted EBITDA from continuing operations increased by $11.1 million or 28.3% to $50.3 million, primarily driven by a $13 million decrease in selling and administrative expenses [12][26] - EBITDA margin increased by 180 basis points to 8.2% due to top line growth and improved operating efficiencies [26] Business Line Data and Key Metrics Changes - Revenue from First Day programs increased by 39% to $199 million, contributing significantly to overall revenue growth [3][12] - First Day Complete revenue specifically grew by 52% to $136 million, indicating strong adoption of the new business model [3][12] - Retail segment revenue increased by $700,000 or 0.1% to $599.3 million, driven by a 5.8% increase in comparable store course material sales [26] Market Data and Key Metrics Changes - Comparable store sales growth for course materials was 5.8%, while general merchandise sales declined by 1.7% [26] - The transition to a subscription-like B2B model has improved revenue predictability and visibility, aligning costs more effectively with revenue [2][9] Company Strategy and Development Direction - The company is focused on transitioning to the First Day Courseware business model, which is expected to enhance revenue stability and visibility [2][3] - Management is optimistic about the growth potential of the First Day Complete program, with a robust pipeline of schools committed for future terms [7][19] - The strategic alternatives process is ongoing, with the Board of Directors reviewing various options to maximize value for stakeholders [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy and competitive position, highlighting the positive impact of the First Day programs on student outcomes [5][7] - The company anticipates continued growth in the First Day Complete model, with participation rates exceeding expectations [17][19] - Management noted that the transition to a B2B revenue model allows for better forecasting and financial alignment with operational capabilities [9][19] Other Important Information - The company achieved $30 million to $35 million in annualized cost savings, contributing to improved profitability [24] - Cash balance at the end of the quarter was $15 million, with outstanding borrowings reduced to $234 million [14] Q&A Session Summary Question: Are there additional campuses in the pipeline for spring '24? - Management indicated that conversations with institutions are positive, and there is a robust pipeline for future commitments [7][16] Question: How have opt-out rates trended in the new cohort of schools? - Management reported that participation rates are aligned with expectations and are improving year-over-year as students experience the benefits of the First Day Complete model [17][39] Question: Will the need for a larger credit facility arise as First Day Complete grows? - Management clarified that the transition to a B2B model allows for more predictable cash flows, which should mitigate the need for a larger credit facility [9][20]

Financial Performance - Cash flows used in operating activities from continuing operations during the 26 weeks ended October 28, 2023 were $(47.2) million, a decrease of $57.3 million compared to cash flows provided by operating activities of $10.1 million during the same period in 2022[135]. - Net Income from Continuing Operations was $24.9 million for the 13 weeks ended October 28, 2023, compared to $24.2 million for the same period in 2022[166]. - Cash Flow from Operating Activities from Continuing Operations was $(47.2) million for the 26 weeks ended October 28, 2023, compared to $10.1 million for the same period in 2022[166]. - The company reported a net loss of $(674) for the 13 weeks ended October 28, 2023, compared to a net loss of $(2,024) for the same period in 2022[202]. - The company reported a net loss of $26,208 thousand for the period ending October 28, 2023, an improvement from a net loss of $30,563 thousand in the same period last year[220]. - For the 13 weeks ended October 28, 2023, net income from continuing operations was $24.85 million, compared to $24.17 million for the same period in 2022, representing a year-over-year increase of 2.8%[299]. - Total sales for the 13 weeks ended October 28, 2023, were $610,379, compared to $608,633 for the same period in 2022, reflecting a slight increase of 0.3%[297]. - Total sales for the 13 weeks ended October 28, 2023 were $2,784 thousand, a decrease from $8,465 thousand in the same period last year[261]. Debt and Interest Expenses - Interest expense recognized during the 26 weeks ended October 28, 2023 was $18.9 million, compared to $8.8 million for the same period in 2022, indicating a significant increase[143]. - The Term Loans accrue interest at a rate of 11.25%, with all interest during the 13 weeks ended October 28, 2023 incurred in kind[141]. - The company incurred debt issuance costs totaling $11.5 million related to the July 2023 Credit Agreement amendment, which will be amortized over the term of the credit agreement[139]. - The company incurred debt issuance costs totaling $1.4 million related to the October 2023 Credit Agreement amendment[168]. - The company incurred debt issuance costs totaling $0.4 million related to the March 2023 Term Loan Credit Agreement amendment[183]. - The company incurred interest expense of $10,664 for the 13 weeks ended October 28, 2023, compared to $4,886 for the same period in 2022, representing a significant increase of 118.5%[202]. - The company incurred $863 for interest in kind on the Term Loans during the 26 weeks ended October 28, 2023, with $30,863 of outstanding borrowings as of that date[285]. Sales and Revenue - Retail sales increased by $9.7 million, or 1.2%, to $844.8 million during the 26 weeks ended October 28, 2023, compared to $835.1 million during the same period in 2022[161]. - Total course material product sales increased by $26.6 million, or 4.9%, to $573.9 million during the 26 weeks ended October 28, 2023, primarily due to the growth of BNC First Day programs[161]. - Total general merchandise product net sales decreased by $17.8 million, or 8.4%, to $193.7 million during the same period, primarily due to lower commissions for logo general merchandise[161]. - Total BNC First Day Sales rose to $199.2 million, up from $143.3 million year-over-year, also a 39% increase[320]. - First Day Complete Sales increased to $136.4 million on October 28, 2023, from $90.0 million on October 29, 2022, representing a 52% increase[320]. - First Day Sales reached $62.8 million, up 18% from $53.3 million in the previous year[320]. Operational Changes and Restructuring - The company raised additional liquidity and took operational restructuring actions to improve liquidity and alleviate substantial doubt about its ability to continue as a going concern[166]. - The company’s workforce reduction and operational streamlining efforts are expected to enhance productivity and profitability moving forward[257]. - The company achieved annualized savings of $30,000 to $35,000 from cost reduction initiatives implemented during Fiscal 2023, with further planned savings of approximately $25,000 in Fiscal 2024[257]. - During the 13 weeks ended October 28, 2023, restructuring and other charges totaled $4.3 million, compared to $0.3 million for the same period in 2022[179]. Cash and Liquidity - Cash, cash equivalents, and restricted cash at the end of the period were $35,341, including $20,333 of restricted cash related to commission due to Lids[215]. - The company expects to maintain adequate liquidity levels to support ongoing inventory purchases and related vendor payments[176]. - The tightening of available credit commitments raised substantial doubt about the company's ability to continue as a going concern, which management addressed by implementing a liquidity improvement plan[215]. - Cash and cash equivalents decreased to $15,008 thousand from $17,296 thousand year-over-year, a decline of approximately 13.2%[219]. - The company reported a total stockholders' equity of $105,964 thousand, down from $200,464 thousand year-over-year, a decrease of approximately 47%[219]. Stock Repurchase and Shareholder Actions - During the 13 and 26 weeks ended October 28, 2023, the company repurchased 66,852 and 144,750 shares of Common Stock, respectively, outside of the stock repurchase program[152]. - As of October 28, 2023, the approximate dollar value of shares that may yet be purchased under publicly announced plans or programs is 26,669,324[178]. - The company repurchased 66,852 shares of Common Stock during the 13 weeks ended October 28, 2023, as part of employee tax withholding obligations[276]. Segment Performance - The company has two reportable segments: Retail and Wholesale, following the classification of the DSS Segment as Assets Held for Sale and Discontinued Operations[238]. - The Wholesale Segment serves approximately 2,900 physical bookstores and 554 virtual bookstores, indicating a broad distribution network[274]. - The company operates 1,271 physical, virtual, and custom bookstores, serving more than 5.8 million students[226]. Future Outlook and Strategy - The company plans to continue expanding its market presence through new strategies and partnerships[322]. - The company plans to move many institutions to the First Day Complete model in Fiscal 2024 and the majority by Fiscal 2025[228]. - The company expects gross general merchandise sales to increase over the long term, driven by evolving product assortments and enhanced e-commerce capabilities through the F/L Relationship with Fanatics and Lids[226].

Financial Data and Key Metrics Changes - The first quarter consolidated total revenue increased by almost 4% to $264.2 million, with adjusted EBITDA improving by approximately 22% [10][20] - Retail segment revenue increased by $9 million or 3.8% to $245.5 million, driven by an 8.4% increase in course material revenue [11][48] - Consolidated adjusted EBITDA grew by 21.8% or $7.5 million to a negative $26.8 million [20][22] - Merchandise inventories decreased by 17% or $79.4 million to $384.2 million compared to the prior year [24] Business Line Data and Key Metrics Changes - Course materials gross margin declined due to higher markdowns and a higher percentage of lower-margin digital course material sales [21] - First Day Complete revenue increased by 55% year-over-year, with total course material sales up by 8.4% [13][48] - Retail gross profit decreased by $3.7 million or 6.9%, while retail gross margin decreased by 230 basis points to 20.5% [48] Market Data and Key Metrics Changes - The First Day Complete model is now implemented in 157 campus stores, representing enrollment of nearly 800,000 students, a 46% increase over the fall of 2022 [41] - First Day Complete course material sales increased by 82% year-over-year in stores that transitioned to the model [46] Company Strategy and Development Direction - The company is focusing on operational efficiencies and cost reductions to drive profitable growth [4] - The First Day Complete model is a cornerstone of the long-term profitability growth plan, with expectations for increased student participation rates over time [14][19] - The company is winding down underperforming stores, operating 117 fewer stores compared to the previous year [11][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the positive impact of the First Day Complete model on student experience and institutional partnerships [14][44] - The company expects to maintain its fiscal 2024 adjusted EBITDA expectation of approximately $40 million despite inventory delays [52] - Management highlighted the importance of adapting to the current operating environment and the potential for future growth through strategic initiatives [40][55] Other Important Information - The company welcomed two new directors to the board, bringing fresh perspectives to its transformation efforts [25] - The company is actively pursuing a more permanent capital structure to support its business model transformation [40] Q&A Session Summary Question: Can you provide more color on the inventory delays? - Management clarified that the delays were primarily felt in course materials and that they prioritized clearing course materials vendors to mitigate impacts on fall rush sales [28][57] Question: What is the runway for additional store wind-downs? - Management indicated that the future of store wind-downs depends on the success of converting stores to the First Day Complete model and improving profitability [32][60] Question: What has been the impact on general merchandise sales at schools that transitioned to First Day Complete? - Management noted that there has not been a decrease in student traffic; in fact, more students are coming into stores to pick up their First Day Complete packages [63][64]

Financial Performance - For the 13 weeks ended July 29, 2023, the company incurred a Net Loss from Continuing Operations of $(50.9) million, compared to $(50.3) million for the same period in 2022[200]. - Adjusted EBITDA for the 13 weeks ended July 29, 2023, was $(49.97) million, compared to $(34.31) million for the same period in 2022[220]. - The company reported EBITDA from discontinued operations of $427 million for the 13 weeks ended July 29, 2023, compared to $889 million for the same period in 2022[221]. Cash Flow and Liquidity - Cash Flow Used In Operating Activities from Continuing Operations was $(119.9) million for the 13 weeks ended July 29, 2023, compared to $(28.6) million for the same period in 2022[200]. - Free Cash Flow (non-GAAP) for the 13 weeks ended July 29, 2023, was $(129.96) million, a significant decrease from $(39.19) million in the prior year[199]. - As of July 29, 2023, the company had $19.3 million in cash on hand, including $10.7 million of restricted cash related to a merchandising partnership agreement[227]. - The company raised additional liquidity and implemented operational restructuring actions to alleviate substantial doubt about its ability to continue as a going concern[200]. Debt and Credit Agreement - As of July 29, 2023, the company had outstanding borrowings of $249.7 million under the Credit Agreement, compared to $230.3 million as of July 30, 2022[207]. - The company amended its Credit Agreement on July 28, 2023, extending the maturity date to December 28, 2024, and adding a minimum Consolidated EBITDA financial maintenance covenant[207]. - The company incurred debt issuance costs totaling $11.0 million related to the July 2023 Credit Agreement amendment[207]. Operational Challenges - The company experienced significant negative impacts from the COVID-19 pandemic, resulting in changes in customer behaviors and lower enrollments affecting financial results[227]. - The company faced challenges including product shortages and increased labor costs, which may impact future performance[224]. Strategic Initiatives - The company is focused on aligning cash outflows to course material vendors with cash inflows collected from schools, particularly with the adoption of BNC First Day programs[230]. - The company is exploring strategic alternatives to effect a "Specified Liquidity Transaction" as part of its ongoing financial strategy[228]. Legal and Market Risks - The company is involved in various legal claims and proceedings but does not expect a material adverse effect on future financial results[243]. - There have been no material changes to market risk disclosures since the fiscal year ended April 29, 2023[241]. Capital Expenditures - Total Capital Expenditures for the 13 weeks ended July 29, 2023, were $4.22 million, down from $7.53 million in the same period of 2022[199]. - As of July 29, 2023, the company has no off-balance sheet arrangements[238]. Stock Repurchase Program - The company has approximately $26.7 million remaining under its stock repurchase program as of July 29, 2023[237].