-----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, SMXhR0m7fP30zt/Pw/fLDYNp6NlhdV6K/1pKwgQTWJMPK+Ll626RU4+Fl1r6VBSn O1EFsehYD57FySwp+iusyA== 0001157523-03-006887.txt : 20031121 0001157523-03-006887.hdr.sgml : 20031121 20031120174740 ACCESSION NUMBER: 0001157523-03-006887 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031120 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20031121 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: 031016275 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 a4521332.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): November 20, 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 November 20, 2003 Item 12. Results of Operations and Financial Condition On November 20, 2003, Barnes & Noble, Inc. (the "Company") issued a press release announcing its financial results for the fiscal quarter ended November 1, 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 39 weeks ended November 1, 2003 and November 2, 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: November 20, 2003 EX-99 3 a4521332_ex991.txt BARNES & NOBLE EXHIBIT 99.1 Exhibit 99.1 Barnes & Noble Announces Third Quarter Results: Comparable Store Sales Increase 4.5%; EPS Exceeds Estimates; Full Year Guidance Increased NEW YORK--(BUSINESS WIRE)--Nov. 20, 2003--Barnes & Noble, Inc. (NYSE:BKS), the world's largest bookseller, today reported financial results for the third quarter ended November 1, 2003. Barnes & Noble Booksellers For the third quarter, sales were $926.2 million, an increase of 9.7% over the same period last year. Net earnings were $6.9 million or $0.10 per share, compared to $1.4 million or $0.02 per share in 2002. The $0.10 per share exceeds previously issued guidance of $0.05 to $0.09. -- Barnes & Noble store sales were $859.4 million for the quarter, an increase of 9.6%. Comparable store sales increased 4.7% for the month of October and 4.5% for the third quarter. The company opened 13 new Barnes & Noble stores and closed one location ending the quarter with 646 stores. -- B. Dalton sales, which comprise approximately 5.0% of total bookstore sales, were $44.2 million for the quarter, a decrease of (14.9)%. Comparable store sales decreased (1.5)% for the month of October and (1.3)% for the third quarter. The company closed three B. Dalton stores ending the quarter with 231 stores. "Sales were strong across every product category, including books, music, DVDs and cafe," said Steve Riggio, chief executive officer of Barnes & Noble, Inc. "Sales were also strong on Barnes & Noble's published titles, many emerging as bestsellers in their category, including Joel Meyerowitz's 'Tuscany: Inside the Light,' Dow Mossman's 'The Stones of Summer' and Susan Miller's 'The Year Ahead 2004.'" Due to the sustained improvement in sales trends, the company is now expecting comparable store sales at Barnes & Noble stores to range from 4.0% to 5.0% for the fourth quarter and 2.0% to 3.0% for the full year. Based upon the increased sales outlook, the company expects Booksellers earnings to range from $1.39 to $1.42 per share for the quarter and $1.74 to $1.77 per share for the full year, versus $1.28 and $1.52, respectively, for the equivalent periods last year. Barnes & Noble.com Following the September 15, 2003 acquisition of Bertelsmann's interest in Barnes & Noble.com, Barnes & Noble, Inc. increased its ownership stake in Barnes & Noble.com to approximately 75 percent. As a result of this transaction, Barnes & Noble, Inc.'s third quarter earnings reflect a 38 percent ownership interest prior to September 15th and an approximate 75 percent ownership interest for the rest of the quarter. However, the company has consolidated 100 percent of Barnes & Noble.com's losses from the date of acquisition. The company's share of net losses for Barnes & Noble.com was $(3.6) million or $(0.05) per share for the quarter. The company's net loss in Barnes & Noble.com is expected to be in a range of $(0.07) to $(0.09) for the fourth quarter of 2003, and in the range of $(0.20) to $(0.22) per share for the full year. On November 7th, the company announced its proposal to take Barnes & Noble.com private. The transaction is not expected to close by year end. GameStop GameStop, the nation's largest video game and entertainment software specialty retailer, reported sales of $326.0 million for the quarter, an increase of 13.7%. GameStop comparable store sales decreased (1.9)% during the quarter. Video game software sales, however, were very strong, growing by 18%. The company's share of net earnings for the third quarter (based upon Barnes & Noble, Inc.'s basic ownership interest of approximately 65%) was $6.5 million or $0.09 per share. GameStop expects fourth quarter comparable store sales to range from (2.0)% to 2.0%. The company's share of net earnings in GameStop is expected to range from $0.28 to $0.30 per share for the fourth quarter of 2003, versus an equivalent $0.25 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 $0.40 for the same period last year. Consolidated Consolidated net earnings for the third quarter were $10.2 million or $0.14 per share compared with $3.8 million or $0.05 per share for the same period last year. Consolidated results for the fourth quarter are expected to range from $1.58 to $1.65 per share, based upon a share count of approximately 79 million shares. Full year results are expected to range from $2.00 to $2.07 per share based upon a share count of approximately 77 million shares. A conference call with Barnes & Noble, Inc.'s senior management will be webcast beginning at 11 A.M. ET on Friday, November 21, 2003, and is accessible at www.barnesandnobleinc.com/financials, where it will be archived until December 19, 2003. As is past practice, the company will not issue a report on November comparable store sales until the release of sales results for the full holiday period, on January 8, 2004. ABOUT BARNES & NOBLE, INC. Barnes & Noble, Inc. (NYSE:BKS) is the world's largest bookseller, operating 646 Barnes & Noble stores in 49 states. It also operates 231 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 65% interest in GameStop (NYSE:GME), the nation's largest video game and entertainment software specialty retailer with 1,472 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 Third Quarter Summary ($ in millions, except per share amounts) 13 weeks ended 39 weeks ended ----------------------- ----------------------- November 1, November 2, November 1, November 2, 2003 2002 2003 2002 ---------- ----------- ----------- ----------- Sales Barnes & Noble Bookstores (a) $ 926 844 2,768 2,591 Barnes & Noble.com (b) 18 - 18 - GameStop 326 287 953 832 ---------- ----------- ----------- ----------- Total sales 1,270 1,131 3,739 3,423 ---------- ----------- ----------- ----------- Operating profit (loss) Barnes & Noble Bookstores (a) 15 8 39 38 Barnes & Noble.com (b) (2) - (2) - GameStop 18 16 40 35 ---------- ----------- ----------- ----------- Total operating profit (loss) 31 24 77 73 ---------- ----------- ----------- ----------- Depreciation and amortization Barnes & Noble Bookstores (a) 32 32 97 94 Barnes & Noble.com (b) 1 - 1 - GameStop 8 6 21 17 ---------- ----------- ----------- ----------- Total depreciation and amortization 41 38 119 111 ---------- ----------- ----------- ----------- Impairment charge ---------- ----------- ----------- ----------- Barnes & Noble Bookstores - - - (25) ---------- ----------- ----------- ----------- EBITDA (Operating profit (loss) + depreciation and amortization) Barnes & Noble Bookstores (a) 47 40 136 132 Barnes & Noble.com (b) (1) - (1) - GameStop (c) 16 14 38 33 ---------- ----------- ----------- ----------- Total EBITDA 62 54 173 165 ---------- ----------- ----------- ----------- EPS Barnes & Noble Bookstores (a) 0.10 0.02 0.24 0.20 Barnes & Noble.com (d) (0.05) (0.06) (0.15) (0.19) GameStop (c) 0.09 0.09 0.22 0.19 Impairment charge - - - (0.23) Other investments - - - (0.15) ---------- ----------- ----------- ----------- Total EPS $0.14 0.05 0.31 (0.18) ---------- ----------- ----------- ----------- Weighted average shares outstanding 68,704 67,927 67,075 66,957 (a) Includes Calendar Club and Sterling Publishing. Excludes non- cash charge recorded in the first quarter of 2002 from the impairment in the company's investment in Gemstar International Ltd. (b) From date of acquisition of Bertelsmann's interest. (c) Based on Barnes & Noble, Inc.'s percentage ownership interest in GameStop, approximately 65%. (d) Results accounted for under the equity method through September 15, 2003, and consolidated thereafter. BARNES & NOBLE, INC. AND SUBSIDIARIES Consolidated Statements of Operations (thousands of dollars, except per share data) 13 weeks ended 39 weeks ended ----------------------- ----------------------- November 1, November 2, November 1, November 2, 2003 2002 2003 2002 ----------- ----------- ----------- ----------- Sales $1,270,072 1,130,885 3,738,920 3,423,225 Cost of sales and occupancy 921,823 836,703 2,753,053 2,539,747 ----------- ----------- ----------- ----------- Gross profit 348,249 294,182 985,867 883,478 ----------- ----------- ----------- ----------- Selling and administrative expenses 273,062 227,774 782,919 692,005 Depreciation and amortization 40,492 37,982 118,778 110,352 Pre-opening expenses 3,186 4,077 7,146 8,077 Impairment charge - - - 25,328 ----------- ----------- ----------- ----------- Operating profit 31,509 24,349 77,024 47,716 Interest expense, net (5,430) (5,604) (14,783) (15,970) Equity in net loss of Barnes & Noble.com (3,935) (6,323) (14,311) (21,227) Other expense, net - - - (16,498) ----------- ----------- ----------- ----------- Income (loss) before taxes and minority interest 22,144 12,422 47,930 (5,979) Income taxes 8,913 4,995 19,292 (2,411) ----------- ----------- ----------- ----------- Income (loss) before minority interest 13,231 7,427 28,638 (3,568) Minority interest (3,058) (3,598) (6,828) (7,495) ----------- ----------- ----------- ----------- Net income (loss) 10,173 3,829 21,810 (11,063) =========== =========== =========== =========== Income (loss) per common share: Basic $0.15 0.06 0.33 (0.17) Diluted $0.14 0.05 0.31 (0.18) Weighted average common shares outstanding Basic 66,664,000 66,207,000 65,461,000 66,957,000 Diluted 68,704,000 67,927,000 67,075,000 66,957,000 Percentage of sales: Sales 100.0% 100.0% 100.0% 100.0% Cost of sales and occupancy 72.6% 74.0% 73.6% 74.2% ----------- ----------- ----------- ----------- Gross profit 27.4% 26.0% 26.4% 25.8% ----------- ----------- ----------- ----------- Selling and administrative expenses 21.5% 20.1% 20.9% 20.2% Depreciation and amortization 3.2% 3.3% 3.2% 3.2% Pre-opening expenses 0.2% 0.4% 0.2% 0.3% Impairment charge 0.0% 0.0% 0.0% 0.7% ----------- ----------- ----------- ----------- Operating profit 2.5% 2.2% 2.1% 1.4% Interest expense, net -0.4% -0.5% -0.4% -0.5% Equity in net loss of Barnes & Noble.com -0.3% -0.6% -0.4% -0.6% Other expense, net 0.0% 0.0% 0.0% -0.5% ----------- ----------- ----------- ----------- Income (loss) before taxes and minority interest 1.7% 1.1% 1.3% -0.2% Income taxes 0.7% 0.5% 0.5% -0.1% ----------- ----------- ----------- ----------- Income (loss) before minority interest 1.0% 0.6% 0.8% -0.1% Minority interest -0.2% -0.3% -0.2% -0.2% ----------- ----------- ----------- ----------- Net income (loss) 0.8% 0.3% 0.6% -0.3% =========== =========== =========== =========== BARNES & NOBLE, INC. AND SUBSIDIARIES Consolidated Balance Sheets (thousands of dollars, except per share data) - ---------------------------------------------------------------------- November 1, November 2, February 1, 2003 2002 2003 ----------- ---------- ----------- (unaudited) ASSETS Current assets: Cash and cash equivalents $ 136,671 142,571 267,642 Receivables, net 74,428 67,718 66,948 Barnes & Noble.com receivable - 40,639 55,174 Merchandise inventories 1,920,266 1,827,897 1,395,872 Prepaid expenses and other current assets 111,777 113,453 101,232 ----------- ---------- ----------- Total current assets 2,243,142 2,192,278 1,886,868 ----------- ---------- ----------- Property and equipment: Land and land improvements 3,247 3,247 3,247 Buildings and leasehold improvements 517,541 484,307 495,499 Fixtures and equipment 1,176,290 916,224 936,136 ----------- ---------- ----------- 1,697,078 1,403,778 1,434,882 Less accumulated depreciation and amortization 1,034,071 787,021 812,579 ----------- ---------- ----------- Net property and equipment 663,007 616,757 622,303 ----------- ---------- ----------- Goodwill 572,206 341,081 390,396 Intangible assets, net 46,856 - 48,176 Investment in Barnes & Noble.com - 27,521 23,280 Other noncurrent assets 23,256 23,570 24,404 ----------- ---------- ----------- Total assets $3,548,467 3,201,207 2,995,427 =========== ========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $1,162,014 1,055,485 710,907 Accrued liabilities 457,951 367,665 520,541 ----------- ---------- ----------- Total current liabilities 1,619,965 1,423,150 1,231,448 ----------- ---------- ----------- Long-term debt 311,600 443,550 300,000 Deferred income taxes 119,893 115,204 119,823 Other long-term liabilities 198,085 106,064 115,415 Minority interest 201,365 188,491 200,951 Shareholders' equity: Common stock; $.001 par value; 300,000,000 shares authorized; 76,100,493, 73,055,025 and 73,110,740 shares issued, respectively 76 73 73 Additional paid-in capital 884,645 826,059 828,522 Accumulated other comprehensive loss (10,961) (632) (11,064) Retained earnings 413,460 280,639 391,650 Treasury stock, at cost, 8,807,700, 8,502,700 and 8,502,700 shares, respectively (189,661) (181,391) (181,391) ----------- ---------- ----------- Total shareholders' equity 1,097,559 924,748 1,027,790 ----------- ---------- ----------- Commitments and contingencies - - - ----------- ---------- ----------- Total liabilities and shareholders' equity $3,548,467 3,201,207 2,995,427 =========== ========== =========== BARNES & NOBLE, INC. AND SUBSIDIARIES Pro Forma Third Quarter Summary Pro Forma as if the Company Owned 75% of Barnes & Noble.com at the Beginning of Fiscal 2002 ($ in millions, except per share amounts) 13 weeks ended 39 weeks ended ------------------------ ----------------------- November 1, November 2, November 1, November 2, 2003 2002 2003 2002 ----------- ----------- ---------- ----------- Sales Barnes & Noble Bookstores (a) $ 926 844 2,768 2,591 Barnes & Noble.com 99 103 291 295 GameStop 326 287 953 832 ----------- ----------- ---------- ----------- Total sales 1,351 1,234 4,012 3,718 ----------- ----------- ---------- ----------- Operating profit (loss) Barnes & Noble Bookstores (a) 15 8 39 38 Barnes & Noble.com (12) (17) (39) (57) GameStop 18 16 40 35 ----------- ----------- ---------- ----------- Total operating profit (loss) 21 7 40 16 ----------- ----------- ---------- ----------- Depreciation and amortization Barnes & Noble Bookstores (a) 32 32 97 94 Barnes & Noble.com 6 8 20 25 GameStop 8 6 21 17 ----------- ----------- ---------- ----------- Total depreciation and amortization 46 46 138 136 ----------- ----------- ---------- ----------- Impairment charge ----------- ---------------------- ------------ Barnes & Noble Bookstores - - - (25) ----------- ----------- ---------- ----------- EBITDA (Operating profit (loss) + depreciation and amortization) Barnes & Noble Bookstores (a) 47 40 136 132 Barnes & Noble.com (b) (5) (7) (14) (24) GameStop (c) 16 14 38 33 ----------- ----------- ---------- ----------- Total EBITDA 58 47 160 141 ----------- ----------- ---------- ----------- EPS Barnes & Noble Bookstores (a) 0.10 0.02 0.24 0.20 Barnes & Noble.com (b) (0.08) (0.12) (0.26) (0.39) GameStop (c) 0.09 0.09 0.22 0.19 Impairment charge - - - (0.23) Other investments - - - (0.15) ----------- ----------- ---------- ----------- Total EPS $0.11 (0.01) 0.20 (0.38) ----------- ----------- ---------- ----------- Weighted average shares outstanding 68,704 66,207 67,075 66,957 (a) Includes Calendar Club and Sterling Publishing. Excludes non-cash charge recorded in the first quarter of 2002 from the impairment in the company's investment in Gemstar International Ltd. (b) For pro forma purposes only, the company has reflected the acquisition of Bertelsmann's interest in Barnes & Noble.com as if the transaction occurred on February 3, 2002. Also for pro forma purposes only, amounts include 75% of the results from Barnes & Noble.com for all periods presented. (c) Based on Barnes & Noble, Inc.'s percentage ownership interest in GameStop, approximately 65%. BARNES & NOBLE, INC. AND SUBSIDIARIES Pro Forma Consolidated Statements of Operations Pro Forma as if the Company Owned 75% of Barnes & Noble.com at the Beginning of Fiscal 2002 (thousands of dollars, except per share data) - --------------------------------------------- ----------------------- 13 weeks ended 39 weeks ended ----------------------- ----------------------- November 1, November 2, November 1, November 2, 2003 2002 2003 2002 ----------- ----------- ----------- ----------- Sales $1,351,216 1,233,460 4,012,504 3,718,172 Cost of sales and occupancy 984,777 917,713 2,966,580 2,774,758 ----------- ----------- ----------- ----------- Gross profit 366,439 315,747 1,045,924 943,414 ----------- ----------- ----------- ----------- Selling and administrative expenses 296,457 256,875 861,559 783,832 Depreciation and amortization 45,654 46,410 138,052 135,305 Pre-opening expenses 3,186 4,077 7,146 8,077 Impairment charge - - - 25,328 ----------- ----------- ----------- ----------- Operating profit 21,142 8,385 39,167 (9,128) Interest expense, net (5,426) (5,301) (14,616) (14,575) Other expense, net - (1,805) - (19,677) ----------- ----------- ----------- ----------- Income (loss) before taxes and minority interest 15,716 1,279 24,551 (43,380) Income taxes 6,326 515 9,882 (17,460) ----------- ----------- ----------- ----------- Income (loss) before minority interest 9,390 764 14,669 (25,920) Minority interest (1,241) (989) (930) 1,263 ----------- ----------- ----------- ----------- Net income (loss) 8,149 (225) 13,739 (24,657) =========== =========== =========== =========== Income (loss) per common share: Basic $0.12 (0.00) 0.21 (0.37) Diluted $0.11 (0.01) 0.20 (0.38) Weighted average common shares outstanding Basic 66,664,000 66,207,000 65,461,000 66,957,000 Diluted 68,704,000 66,207,000 67,075,000 66,957,000 Percentage of sales: Sales 100.0% 100.0% 100.0% 100.0% Cost of sales and occupancy 72.9% 74.4% 73.9% 74.6% ----------- ----------- ----------- ----------- Gross profit 27.1% 25.6% 26.1% 25.4% ----------- ----------- ----------- ----------- Selling and administrative expenses 21.9% 20.8% 21.5% 21.1% Depreciation and amortization 3.4% 3.8% 3.4% 3.7% Pre-opening expenses 0.2% 0.3% 0.2% 0.2% Impairment charge 0.0% 0.0% 0.0% 0.7% ----------- ----------- ----------- ----------- Operating profit 1.6% 0.7% 1.0% -0.3% Interest expense, net -0.4% -0.4% -0.4% -0.4% Other expense, net 0.0% -0.2% 0.0% -0.5% ----------- ----------- ----------- ----------- Income (loss) before taxes and minority interest 1.2% 0.1% 0.6% -1.2% Income taxes 0.5% 0.0% 0.3% -0.5% ----------- ----------- ----------- ----------- Income (loss) before minority interest 0.7% 0.1% 0.3% -0.7% Minority interest -0.1% -0.1% 0.0% 0.0% ----------- ----------- ----------- ----------- Net income (loss) 0.6% 0.0% 0.3% -0.7% =========== =========== =========== =========== Note: For pro forma purposes only, the company has reflected the acquisition of Bertelsmann's interest in Barnes & Noble.com as if the transaction occurred on February 3, 2002. Also for pro forma purposes only, amounts include 75% of the results from Barnes & Noble.com for all periods presented. CONTACT: Barnes & Noble, Inc., New York Media: Mary Ellen Keating Senior Vice President Corporate Communications 212/633-3323 or Investor: Joseph J. Lombardi Chief Financial Officer 212/633-3215 -----END PRIVACY-ENHANCED MESSAGE-----