Barnes & Noble Education(BNED)2023-12-06 16:00Financial 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].