-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, A+cCq0LI73L2PMm6Uu1q33R6JXiCi91oE5mwgrsAS9TkFmNHuAAJlloRfq/mlTKR IUVZW7PumKoNhX679/VhVg== 0001157523-03-004476.txt : 20030825 0001157523-03-004476.hdr.sgml : 20030825 20030825150608 ACCESSION NUMBER: 0001157523-03-004476 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030825 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030825 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BARNES & NOBLE INC CENTRAL INDEX KEY: 0000890491 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-MISCELLANEOUS SHOPPING GOODS STORES [5940] IRS NUMBER: 061196501 STATE OF INCORPORATION: DE FISCAL YEAR END: 0130 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12302 FILM NUMBER: 03864259 BUSINESS ADDRESS: STREET 1: 122 FIFTH AVE CITY: NEW YORK STATE: NY ZIP: 10011 BUSINESS PHONE: 2126333300 MAIL ADDRESS: STREET 1: 122 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10011 8-K 1 a4460478.txt BARNES & NOBLE 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): August 25, 2003 BARNES & NOBLE, INC. (Exact name of Registrant as Specified in its Charter) Delaware (State or other Jurisdiction of Incorporation) 1-12302 06-1196501 --------------------------------------- --------------------------- (Commission File Number) (IRS Employer Identification No.) 122 Fifth Avenue, New York, NY 10011 - ------------------------------------------------ ------------ (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, Including Area Code (212) 633-3300 -------------- --------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) ---------------------------------- Item 7. Financial Statements, Pro Forma Financial Information and Exhibits (c) Exhibits 99.1 Press Release of Barnes & Noble, Inc., dated August 21, 2003 Item 12. Results of Operations and Financial Condition On August 21, 2003, Barnes & Noble, Inc. (the "Company") issued a press release announcing its financial results for the fiscal quarter ended August 2, 2003. A copy of this press release is attached hereto as Exhibit 99.1. The information in this Form 8-K and the Exhibit attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing. Use of Non-GAAP Financial Information To supplement the Company's consolidated financial statements presented in accordance with generally accepted accounting principles ("GAAP"), the Company uses non-GAAP measures of EBITDA (defined by the Company as operating profit (loss) before depreciation, amortization and impairment charge, less the minority interest in GameStop Corp.'s EBITDA) for the 13 and 26 weeks ended August 2, 2003 and August 3, 2002. The Company's management reviews these non-GAAP measures internally to evaluate the Company's performance and manage its operations. In addition, since the Company has historically provided non-GAAP results and guidance to the investment community, the Company believes that the inclusion of non-GAAP financial measures provides consistent and comparable measures to help investors understand the Company's current and future operating results. The non-GAAP measures included in the press release attached hereto as Exhibit 99.1 have been reconciled to the comparable GAAP measure as required under SEC rules regarding the use of non-GAAP financial measures. The Company urges investors to carefully review the GAAP financial information included as part of the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and quarterly earnings releases. SIGNATURE --------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BARNES & NOBLE, INC. (Registrant) By:/s/ Joseph J. Lombardi ----------------------------------------- Name: Joseph J. Lombardi Title: Chief Financial Officer Date: August 25, 2003 EX-99 3 a4460478ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Barnes & Noble Announces Second Quarter Results: Comparable Store Sales Increases 5.6%; EPS Exceeds Estimates; Increases Booksellers Full Year Guidance NEW YORK--(BUSINESS WIRE)--Aug. 21, 2003--Barnes & Noble, Inc. (NYSE: BKS), the world's largest bookseller, today reported financial results for the second quarter ended August 2, 2003. Barnes & Noble Booksellers For the second quarter, sales were $977.6 million and net earnings were $12.7 million or $0.19 per share, exceeding previously issued guidance of $0.10 to $0.14. -- Barnes & Noble store sales were $912.6 million for the quarter. Comparable store sales increased 5.1% for the month of July and 5.6% for the second quarter. The company opened nine new Barnes & Noble stores and closed five locations ending the quarter with 634 stores. -- B. Dalton sales, which comprise approximately 5.0% of total bookstore sales, were $51.3 million for the quarter, a decrease of (12.9)%. Comparable store sales increased 0.8% for the month of July and 0.7% for the second quarter. The company closed 11 B. Dalton stores ending the quarter with 234 stores. "Sales were strong throughout the entire second quarter," said Steve Riggio, chief executive officer of Barnes & Noble, Inc. "We are pleased to see that hardcover book sales are buoyant again, which is increasing traffic in our stores. Due to current sales trends and a strong fall line up of hardcover releases, we are increasing our sales forecast for the balance of the year." The company expects third quarter comparable store sales at Barnes & Noble stores to range from 2.0% to 4.0%. Based upon these projections, the company expects earnings to range from $0.05 to $0.09 per share for the quarter, versus an equivalent $0.02 for the same period last year. Due to improved sales trends, the company is raising full year comparable store sales guidance to a range of 1.0% to 2.0%. Full year earnings are expected to range from $1.66 to $1.70 per share, versus an equivalent $1.52 for the same period last year. GameStop GameStop, the nation's largest video game and entertainment software specialty retailer, reported a comparable store sales decrease of (4.7)% during the quarter. GameStop sales were $305.7 million for the quarter, an increase of 11.5%. The company's share of net earnings for the second quarter (based upon Barnes & Noble, Inc.'s basic ownership interest of approximately 63%) was $4.2 million or $0.06 per share. GameStop expects third quarter comparable store sales to range from (5.0)% to flat. The company's share of net earnings in GameStop is expected to range from $0.08 to $0.09 per share for the third quarter of 2003, versus an equivalent $0.09 for the same period last year. The company's share of net earnings in GameStop is expected to range from $0.48 to $0.50 per share for the full year, versus an equivalent $0.43 for the same period last year. Barnes & Noble.com Barnes & Noble.com reported a second quarter EBITDA (earnings before interest, taxes, depreciation and amortization) loss of $(7.5) million, a 41.0% improvement from the second quarter 2002 EBITDA loss. The net loss was $(14.2) million, a 31.2% improvement from the second quarter of 2002. The company continued to realize greater efficiencies across its operations, reducing total operating expenses 14.1% quarter-over-quarter. The company's share of net losses for Barnes & Noble.com was $(3.2) million or $(0.05) per share for the quarter. The company expects to complete the acquisition of Bertelsmann's interest in Barnes & Noble.com in mid-September. The company's share of third quarter net losses in Barnes & Noble.com is expected to be in the range of $(0.11) to $(0.12) per share, including the greater ownership position due to the acquisition of Bertelsmann's interest. The company's share of full-year net losses in Barnes & Noble.com is expected to be in the range of $(0.23) to $(0.25) per share, including the greater ownership position due to the acquisition of Bertelsmann's interest. Consolidated Consolidated net earnings for the second quarter were $13.7 million or $0.20 per diluted share compared with $1.4 million or $0.02 per share, including a non-cash write off of $(0.11) per share, in the previous year. Consolidated results for the third quarter are expected to range from $0.01 to $0.07 per share, based upon a share count of approximately 68 million shares. Full year results are expected to range from $1.89 to $1.97 per share based upon a share count of approximately 77 million shares. A conference call with Barnes & Noble, Inc.'s management will be simulcast on the Web at (www.companyboardroom.com) beginning at 11 A.M. ET on Thursday, August 21, 2003, and is accessible at (http://www.barnesandnobleinc.com/financials), where it will be archived until September 19, 2003. The next scheduled press release will be the August sales release on September 4, 2003. ABOUT BARNES & NOBLE, INC. Barnes & Noble, Inc. (NYSE: BKS) is the world's largest bookseller, operating 634 Barnes & Noble stores in 49 states. It also operates 234 B. Dalton Bookseller stores, primarily in regional shopping malls. The company offers titles from more than 50,000 publisher imprints, including thousands of small, independent publishers and university presses. It conducts its e-commerce business through Barnes & Noble.com (NASDAQ: BNBN) (http://www.bn.com). Barnes & Noble also has approximately a 63% interest in GameStop (NYSE: GME), the nation's largest video game and entertainment software specialty retailer with 1,393 stores. General financial information on Barnes & Noble, Inc. can be obtained via the Internet by visiting the company's corporate Web site: http://www.barnesandnobleinc.com/financials. SAFE HARBOR This press release contains "forward-looking statements." Barnes & Noble is including this statement for the express purpose of availing itself of the protections of the safe harbor provided by the Private Securities Litigation Reform Act of 1995 with respect to all such forward-looking statements. These forward-looking statements are based on currently available information and represent the beliefs of the management of the company. These statements are subject to risks and uncertainties that could cause actual results to differ materially. These risks include, but are not limited to, general economic and market conditions, decreased consumer demand for the company's products, possible disruptions in the company's computer or telephone systems, possible work stoppages or increases in labor costs, possible increases in shipping rates or interruptions in shipping service, effects of competition, possible disruptions or delays in the opening of new stores or the inability to obtain suitable sites for new stores, higher than anticipated store closing or relocation costs, higher interest rates, the performance of the company's online and other initiatives, the successful integration of acquired businesses, unanticipated increases in merchandise or occupancy costs, unanticipated adverse litigation results or effects, product shortages, and other factors which may be outside of the company's control. Please refer to the company's annual, quarterly and periodic reports on file with the SEC for a more detailed discussion of these and other risks that could cause results to differ materially. BARNES & NOBLE, INC. AND SUBSIDIARIES Second Quarter Summary ($ in millions, except per share amounts) 13 weeks ended 26 weeks ended ---------------------- ----------------------- August 2, August 3, August 2, August 3, 2003 2002 2003 2002 ----------- ---------- ---------- ------------ BARNES & NOBLE RETAIL OPERATIONS BARNES & NOBLE BOOKSELLERS (Bookstores - includes Calendar Club and Sterling Publishing) Sales $978 885 1,841 1,747 Operating profit 26 24 24 5 Depreciation and amortization 32 31 65 62 Impairment charge - - - 25 ----------- ---------- ---------- ---------- EBITDA (operating profit + depreciation and amortization + impairment charge) 58 55 89 92 =========== ========== ========== ========== EPS 0.19 0.16 0.14 0.16 GAMESTOP (Video Game & Entertainment Software Stores) Sales 306 274 627 546 Operating profit 11 10 22 19 Depreciation and amortization 6 6 13 11 ----------- ---------- ---------- ---------- EBITDA (operating profit + depreciation and amortization) 17 16 35 30 =========== ========== ========== ========== Barnes & Noble, Inc.'s percentage ownership in GameStop (basic) 63.4% 63.3% 63.3% 64.8% ----------- ----------- --------- ---------- Barnes & Noble, Inc.'s portion of GameStop's EBITDA 11 10 22 19 =========== ============= ========= ========== EPS 0.06 0.06 0.12 0.11 TOTAL RETAIL EPS 0.25 0.22 0.26 0.27 INVESTING ACTIVITIES Share of net losses of Barnes & Noble.com (0.05) (0.07) (0.09) (0.13) Share of net loss from other investments - (0.13) - (0.14) ----------- ------------- --------- ---------- CONSOLIDATED EPS BEFORE GEMSTAR IMPAIRMENT CHARGE 0.20 0.02 0.17 - Impairment charge (Gemstar International Ltd.)(1) - - - (0.22) ----------- ------------- --------- ---------- CONSOLIDATED EPS $0.20 0.02 0.17 (0.22) =========== ============= ========= ========== Weighted average shares outstanding 66,703,000 69,739,000 66,260,000 67,332,000 (1) In fiscal 1998, Barnes & Noble, Inc. purchased an investment in NuvoMedia, Inc. for $4.8 million. In fiscal 1999, NuvoMedia was acquired by Gemstar International Ltd. (Gemstar). In connection with this sale, Barnes & Noble, Inc. recognized a pre-tax gain of $22.4 million (which was recorded as stock in Gemstar). As a result of Gemstar's financial difficulties, the Company believed that the decline in the value of its investment in Gemstar was other than temporary, and recorded an impairment charge in the first quarter of fiscal 2002. The investment was sold in the second quarter of fiscal 2002. BARNES & NOBLE, INC. AND SUBSIDIARIES Consolidated Statements of Operations (thousands of dollars, except per share data) - ---------------------------------------------- ----------------------- 13 weeks ended 26 weeks ended ----------------------- ----------------------- August 2, August 3, August 2, August 3, 2003 2002 2003 2002 ----------- ----------- ---------- ------------ Sales $1,283,243 1,159,214 2,468,848 2,292,340 Cost of sales and occupancy 946,270 853,054 1,831,230 1,703,044 ----------- ----------- ----------- ----------- Gross profit 336,973 306,160 637,618 589,296 ----------- ----------- ----------- ----------- Selling and administrative expenses 259,184 233,687 509,857 464,231 Depreciation and amortization 39,246 36,620 78,286 72,370 Pre-opening expenses 2,458 2,250 3,960 4,000 Impairment charge - - - 25,328 ----------- ----------- ----------- ----------- Operating profit 36,085 33,603 45,515 23,367 Interest expense, net (4,710) (4,960) (9,353) (10,366) Equity in net loss of Barnes & Noble.com (5,404) (7,469) (10,376) (14,904) Other expense, net - (14,685) - (16,498) ----------- ----------- ----------- ----------- Income (loss) before taxes and minority interest 25,971 6,489 25,786 (18,401) Income taxes 10,454 2,821 10,379 (7,406) ----------- ----------- ----------- ----------- Income (loss) before minority interest 15,517 3,668 15,407 (10,995) Minority interest (1,854) (2,239) (3,770) (3,897) ----------- ----------- ----------- ----------- Net income (loss) 13,663 1,429 11,637 (14,892) =========== =========== =========== =========== Income (loss) per common share: Basic $0.21 0.02 0.18 (0.22) Diluted $0.20 0.02 0.17 (0.22) Weighted average common shares outstanding Basic 64,851,000 67,413,000 64,859,000 67,332,000 Diluted 66,703,000 69,739,000 66,260,000 67,332,000 Percentage of sales: Sales 100.0% 100.0% 100.0% 100.0% Cost of sales and occupancy 73.7% 73.6% 74.2% 74.3% ----------- ----------- ----------- ----------- Gross profit 26.3% 26.4% 25.8% 25.7% ----------- ----------- ----------- ----------- Selling and administrative expenses 20.2% 20.1% 20.7% 20.3% Depreciation and amortization 3.1% 3.2% 3.2% 3.2% Pre-opening expenses 0.2% 0.2% 0.2% 0.2% Impairment charge 0.0% 0.0% 0.0% 1.1% ----------- ----------- ----------- ----------- Operating profit 2.8% 2.9% 1.8% 1.0% Interest expense, net -0.4% -0.4% -0.4% -0.5% Equity in net loss of Barnes & Noble.com -0.4% -0.7% -0.4% -0.6% Other expense, net 0.0% -1.3% 0.0% -0.7% ----------- ----------- ----------- ----------- Income (loss) before taxes and minority interest 2.0% 0.5% 1.0% -0.8% Income taxes 0.8% 0.2% 0.4% -0.3% ----------- ----------- ----------- ----------- Income (loss) before minority interest 1.2% 0.3% 0.6% -0.5% Minority interest -0.1% -0.2% -0.1% -0.2% ----------- ----------- ----------- ----------- Net income (loss) 1.1% 0.1% 0.5% -0.7% =========== =========== =========== =========== BARNES & NOBLE, INC. AND SUBSIDIARIES Consolidated Balance Sheets (thousands of dollars, except per share data) - ---------------------------------------------------------------------- August 2, August 3, February 1, 2003 2002 2003 --------- ----------- ----------- (unaudited) ASSETS Current assets: Cash and cash equivalents $170,205 205,000 267,642 Receivables, net 71,611 55,210 66,948 Barnes & Noble.com receivable 32,411 45,112 55,174 Merchandise inventories 1,434,719 1,395,971 1,395,872 Prepaid expenses and other current assets 107,735 112,637 101,232 ----------- ---------- ---------- Total current assets 1,816,681 1,813,930 1,886,868 ----------- ---------- ---------- Property and equipment: Land and land improvements 3,247 3,247 3,247 Buildings and leasehold improvements 498,472 471,734 495,499 Fixtures and equipment 985,475 881,015 936,136 ----------- ---------- ---------- 1,487,194 1,355,996 1,434,882 Less accumulated depreciation and amortization 875,052 754,720 812,579 ----------- ----------- --------- Net property and equipment 612,142 601,276 622,303 ----------- ----------- --------- Goodwill 394,448 341,081 390,396 Intangible assets, net 47,220 - 48,176 Investment in Barnes & Noble.com 14,378 33,313 23,280 Other noncurrent assets 23,766 25,504 24,404 ----------- ---------- ---------- Total assets $2,908,635 2,815,104 2,995,427 =========== ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $704,774 726,020 710,907 Accrued liabilities 408,582 344,504 520,541 ----------- ---------- ---------- Total current liabilities 1,113,356 1,070,524 1,231,448 ----------- ---------- ---------- Long-term debt 319,000 355,000 300,000 Deferred income taxes 119,853 115,207 119,823 Other long-term liabilities 115,838 106,880 115,415 Minority interest 197,396 184,719 200,951 Shareholders' equity: Common stock; $.001 par value; 300,000,000 shares authorized; 73,873,637, 72,856,628 and 73,110,740 shares issued, respectively 74 73 73 Additional paid-in capital 838,049 823,896 828,522 Accumulated other comprehensive loss (11,095) (628) (11,064) Retained earnings 403,269 276,810 391,650 Treasury stock, at cost, 8,807,700, 5,504,700 and 8,502,700 shares, respectively (187,105) (117,377) (181,391) ----------- ---------- ---------- Total shareholders' equity 1,043,192 982,774 1,027,790 ----------- ---------- ---------- Commitments and contingencies - - - ----------- ---------- ---------- Total liabilities and shareholders' equity $2,908,635 2,815,104 2,995,427 =========== ========= ========== CONTACT: Barnes & Noble, Inc. Media Contact: Mary Ellen Keating, Senior Vice President, Corporate Communications, 212-633-3323 Investor Contact: Joseph J. Lombardi, Chief Financial Officer, 212-633-3215 -----END PRIVACY-ENHANCED MESSAGE-----