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].

Financial Data and Key Metrics Changes - Consolidated fiscal '23 revenue from continuing operations was $1.5 billion, an increase of 3.2% [44] - Consolidated adjusted EBITDA grew by $2.2 million to negative $8.1 million [44] - Retail non-GAAP adjusted EBITDA for fiscal '23 was $10.6 million, an increase of $2 million, primarily due to a $52 million revenue increase [45] Business Line Data and Key Metrics Changes - Total retail gross comparable store sales in fiscal '23 increased by 3.2% [7] - Retail gross comparable course material sales grew by 0.4%, while general merchandise gross comparable store sales increased by 8.6% [7] - Total course materials revenue increased by 1.8%, driven by a 48% increase in First Day and First Day Complete revenues, offset by a 9.4% decline in the traditional a la carte model [19] Market Data and Key Metrics Changes - In fiscal '23, the company added a record number of schools for the fall semester, with 157 campus stores committed to utilize First Day Complete, representing an enrollment increase of approximately 800,000 students, a 46% increase versus fall 2022 [11] - Fiscal '23 wholesale revenue decreased by 5.2% to $106.4 million due to supply constraints and a shift to digital course materials [21] Company Strategy and Development Direction - The company is transitioning to a more profitable subscription-like model, First Day Complete, which is expected to approach the majority of course material revenue in fiscal '24 [19] - The company divested its Digital Student Solutions business to focus on First Day Complete and general merchandise growth [5] - The company aims to enhance its general merchandise business and has seen an 8.6% growth in gross comparable store sales [49] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the operating environment remained challenging in fiscal '23, but significant progress was made to transform the business for sustained profitable growth [3] - The company is entering fiscal '24 as a more efficient entity with a clear focus on strengths and opportunities for profitable growth over the next several years [6] - Management expressed confidence in the ability to grow the top line through primary growth initiatives, including general merchandise and First Day Complete [47] Other Important Information - The company has strengthened its liquidity and financial position to accelerate the execution of its strategy [5] - The amended credit facility extends the maturity of debt facilities and provides additional liquidity to fund operations [66][74] Q&A Session Summary Question: Progress on First Day Complete and expectations for courseware material sales - Management expects First Day and First Day Complete to continue growing significantly, with a focus on transitioning schools to this model [31][64] Question: Future of a la carte required materials business - The company will continue to support the a la carte model but is moving towards the subscription model as the industry standard [61] Question: Enrollment trends at partner schools - Management noted that it is too early to provide specific enrollment trends, but they are optimistic about the upcoming academic year [60][35] Question: Updated terms of the amended credit facility - The amended credit facility extends maturities and provides ample liquidity to support operations, allowing for flexibility in executing growth initiatives [66][74]

Financial Performance - Total sales for fiscal year 2023 were $1,543,208 thousand, a 3.2% increase from $1,495,734 thousand in 2022[25] - Gross profit for fiscal year 2023 was $349,439 thousand, a 1.9% increase from $342,832 thousand in 2022[25] - Net loss for fiscal year 2023 was $101,862 thousand, a 47.9% increase from $68,857 thousand in 2022[25] - The company's pre-tax earnings would be affected by approximately $3.3 million in Fiscal 2023 if there is a 10% change in rental cost of goods sold[486] - A 10% change in long-term incentive compensation expense would impact pre-tax earnings by approximately $0.5 million in Fiscal 2023[488] - A 10% decrease in estimated discounted cash flows would not have materially affected the company's operations in Fiscal 2023[490] Assets and Liabilities - Cash and cash equivalents as of April 29, 2023 totaled $14.2 million, a 61.6% increase from $8.8 million in 2022[464] - Receivables decreased to $92,512 thousand in 2023 from $136,001 thousand in 2022, a 32% decline[476] - Merchandise inventories increased to $322,979 thousand in 2023 from $293,854 thousand in 2022, a 9.9% rise[476] - Total current assets were $537,001 thousand in 2023, a 1% increase from $531,705 thousand in 2022[476] - Total liabilities increased to $850,028 thousand in 2023 from $843,179 thousand in 2022, a 0.8% rise[476] Impairment and Valuation - The company recognized an impairment charge of $6.0 million related to long-lived assets in fiscal year 2023[472] - Significant assumptions for impairment analysis include annual revenue growth rates, gross margin rates, and weighted average cost of capital[490] - The company uses the Black-Scholes model to determine the fair value of stock options and phantom shares[488] - The fair value of cash-settled phantom share units is remeasured at each reporting period based on current risk-free rate and volatility assumptions[488] Tax and Refunds - The company expects to receive additional tax refunds of approximately $10.0 million[481] - Deferred tax assets are evaluated based on future taxable income expectations and carryforward periods[491] - The company does not recognize tax benefits for positions with a 50% or lower likelihood of being sustained upon audit[491] Operational and Accounting Practices - Management evaluates conditions that may raise substantial doubt about the company's ability to continue as a going concern[483] - Textbook rental inventories are amortized to their estimated residual value over the rental period[486]

Barnes & Noble Education (NYSE:BNED) Q3 2023 Earnings Conference Call March 9, 2023 4:30 PM ET Company Participants Hunter Blankenbaker - VP, IR Michael Huseby - CEO Thomas Donohue - EVP and CFO Jonathan Shar - EVP, BNED Retail, President Barnes & Noble College Conference Call Participants Ryan MacDonald - Needham & Co. Alex Fuhrman - Craig Hallum Capital Operator Good afternoon. Thank you for attending today’s Barnes & Noble Education Fiscal 2023 Third Quarter Earnings Conference Call. My name is Hannah, a ...

Financial Performance - For the 39 weeks ended January 28, 2023, total sales amounted to $1,328,020, an increase from $1,270,569 for the same period in 2022, representing a growth of approximately 4.5%[103] - Total gross profit for the 39 weeks ended January 28, 2023, was $312,533, up from $292,549 in the prior year, indicating a growth of approximately 6.8%[103] - Selling and administrative expenses totaled $305,045 for the 39 weeks ended January 28, 2023, compared to $295,597 for the same period in 2022, marking an increase of about 3.2%[103] - The Retail Segment generated sales of $1,256,376 for the 39 weeks ended January 28, 2023, compared to $1,194,161 for the same period in 2022, reflecting an increase of about 5.2%[103] - The Wholesale Segment's sales for the 39 weeks ended January 28, 2023, were $97,161, down from $103,192 in the same period of 2022, reflecting a decline of approximately 5.8%[103] - The Digital Student Solutions (DSS) Segment generated sales of $26,659 for the 39 weeks ended January 28, 2023, compared to $26,012 in the prior year, indicating a slight increase of about 2.5%[103] - Total sales for the 13 weeks ended January 28, 2023, were $447,064,000, an increase from $402,798,000 for the same period in 2022, representing a growth of 11.0%[112] - Gross profit for the 39 weeks ended January 28, 2023, was $312,533,000, compared to $292,549,000 for the same period in 2022, reflecting an increase of 6.8%[112] - The net loss for the 13 weeks ended January 28, 2023, was $(25,049,000), an improvement from $(36,801,000) in the same period of 2022[112] - Operating loss for the 39 weeks ended January 28, 2023, was $(39,040,000), compared to $(49,281,000) for the same period in 2022, indicating a reduction of 20.9%[112] - Interest expense for the 39 weeks ended January 28, 2023, was $15,672,000, up from $7,809,000 in the same period of 2022, showing an increase of 100.0%[112] - Basic earnings per share (EPS) for the 13 weeks ended January 28, 2023, was $(0.48), compared to $(0.71) for the same period in 2022[112] Debt and Financing - The company borrowed $512,000 and repaid $452,100 under the Credit Agreement during the 39 weeks ended January 28, 2023, resulting in outstanding borrowings of $255,600[85] - The company amended its Credit Agreement on March 8, 2023, extending the maturity date to August 29, 2024, and reducing commitments by $20,000 to $380,000[85] - The company borrowed $30,000 thousand under the Term Loan Credit Agreement, with outstanding borrowings of $30,000 thousand as of January 28, 2023[123] - The Term Loans accrue interest at a rate of 11.25%, payable quarterly, with a maturity date extended to December 7, 2024[123] - The company incurred debt issuance costs totaling $2,614 thousand related to the Term Loan Credit Agreement, which will be amortized over the term of the facility[123] Assets and Liabilities - Total current assets increased to $790,078 thousand as of January 28, 2023, compared to $765,391 thousand as of January 29, 2022, reflecting a growth of 3.3%[121] - Total liabilities rose to $1,104,620 thousand as of January 28, 2023, up from $1,029,270 thousand as of January 29, 2022, indicating an increase of 7.3%[121] - The total stockholders' equity decreased to $176,486 thousand as of January 28, 2023, down from $237,460 thousand as of January 29, 2022, a decline of 25.6%[121] Cash Flow and Expenditures - Cash payments for lease liabilities within operating activities were $100,130 thousand for the 39 weeks ended January 28, 2023, compared to $95,042 thousand for the same period in the previous year, reflecting an increase of 5.5%[128] - Net cash flows provided by financing activities during the 39 weeks ended January 28, 2023, were $56.4 million, compared to $20.7 million for the same period in 2022[313] - Capital expenditures totaled $26.9 million during the 39 weeks ended January 28, 2023, down from $33.4 million for the same period in 2022[313] Stock and Compensation - The company repurchased 347,808 shares of Common Stock during the 39 weeks ended January 28, 2023, for employee tax withholding obligations[105] - Total compensation expense for long-term incentive awards was $940,000 for the 13 weeks ended January 28, 2023, down from $2.1 million for the same period in 2022[295] - The company reported a total stock-based awards expense of $4.6 million for the 39 weeks ended January 28, 2023, compared to $4.5 million for the same period in 2022[295] - Total unrecognized compensation cost related to unvested awards as of January 28, 2023, was $9,838, expected to be recognized over a weighted-average period of 2.1 years[139] - The company granted 908,247 restricted stock units (RSUs) to employees with a three-year vesting period during the 39 weeks ended January 28, 2023[138] Tax and Impairment - Income tax expense recorded was $267 on a pre-tax loss of $(24,782) for the 13 weeks ended January 28, 2023, resulting in an effective tax rate of (1.1)%[141] - The effective tax rate for the 39 weeks ended January 28, 2023, was lower compared to the prior year due to foreign taxes and lower projected annual taxable loss[141] - An impairment loss of $6,008 was recognized during the 13 and 39 weeks ended January 28, 2023, compared to an impairment loss of $6,411 for the same periods in 2022[157] Operational Highlights - The company operates 1,388 college, university, and K-12 school bookstores, including 785 physical and 603 virtual bookstores[150] - The company maintains a partnership with Fanatics to enhance e-commerce capabilities and product assortment for campus stores[148] - The company is in the process of implementing a remediation plan for a material weakness identified in its internal controls related to deferred tax asset valuation allowance[294]