Barnes & Noble Education(BNED) - 2023 Q3 - Quarterly Report

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$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)$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]