Barnes & Noble Education(BNED) - 2024 Q3 - Quarterly Results

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].