-----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, BCRKz1aM68KDa2HpB44n1R0IrbB7p4ULDiTrstLBiCBw/JF9mE6YH+xkWwcMGTE/ ik/JreNcJxFjsVEPvR1jQA== 0001157523-04-004957.txt : 20040518 0001157523-04-004957.hdr.sgml : 20040518 20040518091932 ACCESSION NUMBER: 0001157523-04-004957 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040517 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040518 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/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-12302 FILM NUMBER: 04814792 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/A 1 a4642906.txt BARNES & NOBLE, INC. 8-K/A DOCUMENT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): May 18, 2004 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 May 18, 2004 Item 12. Results of Operations and Financial Condition On May 18, 2004, Barnes & Noble, Inc. (the "Company") issued a press release announcing its financial results for the first quarter ended May 1, 2004. A copy of this press release is attached hereto as Exhibit 99.1. The information in this Form 8-K/A 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"), in the press release attached hereto as Exhibit 99.1 the Company uses the non-GAAP financial measure of EBITDA (defined by the Company as operating profit (loss) before depreciation and amortization, less the minority interest in GameStop Corp.'s EBITDA) for the 13 weeks ended May 1, 2004 and May 3, 2003. Additionally, following the Company's acquisition of Bertelsmann AG's interest in barnesandnoble.com inc. ("B&N.com") on September 15, 2003, the Company consolidated the results of B&N.com. Accordingly, the Company is disclosing in the press release attached hereto as Exhibit 99.1 pro forma results as if the Company consolidated B&N.com for all of fiscal 2003. 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 EBITDA results to the investment community, the Company believes that the inclusion of EBITDA results provides a consistent and comparable measure to help investors understand the Company's operating results. Furthermore, since the Company will consolidate B&N.com on a going forward basis, the Company believes that pro forma results (as if the Company consolidated B&N.com) provide investors a better understanding of the Company's current operating results and provide a comparable measure to help investors understand the Company's 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 ------------------------------ Joseph J. Lombardi Chief Financial Officer Date: May 18, 2004 Barnes & Noble, Inc. EXHIBIT INDEX Exhibit Number Description - -------------- ----------- 99.1 Press Release of Barnes & Noble, Inc., dated May 18, 2004 EX-99.1 2 a4642906ex99.txt PRESS RELEASE Exhibit 99.1 Barnes & Noble Announces First Quarter Results: Comparable Store Sales Increase 9.4%, EPS Exceeds Estimates NEW YORK--(BUSINESS WIRE)--May 18, 2004--Barnes & Noble, Inc. (NYSE:BKS), the world's largest bookseller, today reported sales and earnings for the first quarter ended May 1, 2004. FIRST QUARTER RESULTS Barnes & Noble store sales were $910.2 million for the quarter, an increase of 13% over the prior year. First quarter comparable store sales increased 9.4%. The company opened nine new Barnes & Noble stores and closed three locations ending the quarter with 653 stores. B. Dalton sales, which comprise approximately 4% of total bookstore sales, were $39.7 million for the quarter, a decrease of (13%) over the prior year, due primarily to store closings. The company closed seven stores ending the quarter with 188 stores. First quarter comparable store sales increased 6.0%. Earnings for the bookstore business, including publishing, were $0.21 per share in the first quarter versus a loss of ($0.05) per share in the prior year. On April 27, 2004, Barnes & Noble.com reported a first quarter net loss of ($9.8) million, an improvement of 26% from the year-ago period. The company's share of net losses for Barnes & Noble.com, after taxes, was ($6.8) million or ($0.10) per share for the quarter. GameStop, the nation's largest video-game and entertainment-software specialty retailer, today reported sales of $371.7 million for the quarter, an increase of 16% over the prior year period. First quarter comparable store sales decreased (1.8)%. The company's share of net earnings was $4.0 million or $0.06 per share for the quarter. Consolidated net earnings for the first quarter was $12.5 million, or $0.17 per share, versus a loss of ($2.0) million, or ($0.03) per share, in the prior year. SECOND QUARTER GUIDANCE For the second quarter, the company expects comparable store sales at Barnes & Noble stores to decrease between (2%) and (3%). Full-year comparable store sales are expected to increase approximately 2%. "The healthy gains in our first quarter comparable store sales were driven by an easy comparison to 2003 and from the extraordinary sales of hard cover books, particularly books on politics and the war in Iraq," said Steve Riggio, Chief Executive Officer of Barnes & Noble, Inc. "Although the second quarter comparable store sales comparison will be difficult due to the June release of Harry Potter last year, we expect that the impact on earnings will be minimal due to the low margins associated with the heavily discounted title." For the second quarter, Barnes & Noble.com expects net sales to range between $85 million and $95 million. On May 3, 2004, Barnes & Noble.com filed a definitive proxy statement with the Securities and Exchange Commission regarding the proposed merger with a subsidiary of Barnes & Noble, Inc. Upon completion of the merger, Barnes & Noble.com will become a wholly owned subsidiary of Barnes & Noble, Inc. Barnes & Noble, Inc. expects to complete the acquisition of Barnes & Noble.com on or about May 27, 2004. For the second quarter, GameStop expects comparable store sales to range from (1.0%) to (3.0%). The following tables present EPS guidance for the second quarter and the full year. EPS guidance for GameStop is based on the company's approximate 63% ownership interest. SECOND QUARTER EPS 2004 Guidance(a) - ------------------ ---------------- 2003 Low High Pro forma (b) ------- ------- ------------- Barnes & Noble Bookstores $0.17 $0.19 $0.19 Barnes & Noble.com (0.11) (0.09) (0.13) ------- ------- ------------- Total Book Operating Segment 0.06 0.10 0.06 Total Video Game Operating Segment 0.06 0.07 0.06 ------- ------- ------------- Consolidated $0.12 $0.17 $0.12 ======= ======= ============= FULL YEAR EPS 2004 Guidance(c) - ------------- ---------------- 2003 Low High Pro forma (b) ------- ------- ------------- Barnes & Noble Bookstores (d) $1.88 $1.90 $1.75 Barnes & Noble.com (0.21) (0.18) (0.35) ------- ------- ------------- Total Book Operating Segment (d) 1.67 1.72 1.40 Total Video Game Operating Segment 0.52 0.54 0.50 ------- ------- ------------- Consolidated (d) $2.19 $2.26 $1.90 ======= ======= ============= (a) Based on a weighted average share count of approximately 71 million. (b) Pro forma as if the company consolidated 100% of Barnes & Noble.com for the full year. (c) Based on a weighted average share count of approximately 80 million. (d) Includes the impact of $10.2 million interest addback on the convertible notes. A conference call with Barnes & Noble, Inc.'s senior management will be webcast beginning at 1:00 P.M. ET on Tuesday, May 18, 2004, and is accessible at www.barnesandnobleinc.com/financials, where it will be archived until June 25, 2004. The call will also be archived at www.fulldisclosure.com for one year. Barnes & Noble, Inc. will report second quarter earnings on or about August 19, 2004. ABOUT BARNES & NOBLE, INC. Barnes & Noble, Inc. (NYSE:BKS) is the world's largest bookseller, operating 653 Barnes & Noble stores in 49 states. It also operates 188 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 1,603 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 First Quarter Summary ($ in millions, except per share amounts) 13 weeks ended --------------------------- May 1, 2004 May 3, 2003 ------------- ------------- Sales Barnes & Noble Bookstores $ 966 864 Barnes & Noble.com (a) 115 - ------------- ------------- Total Book operating segment 1,081 864 GameStop Total Video Game operating segment 372 322 ------------- ------------- Total sales 1,453 1,186 ------------- ------------- Operating profit (loss) Barnes & Noble Bookstores 27 (1) Barnes & Noble.com (a) (10) - ------------- ------------- Total Book operating segment 17 (1) GameStop Total Video Game operating segment 11 11 ------------- ------------- Total operating profit 28 10 ------------- ------------- Depreciation and amortization Barnes & Noble Bookstores 30 33 Barnes & Noble.com (a) 6 - ------------- ------------- Total Book operating segment 36 33 GameStop Total Video Game operating segment 8 6 ------------- ------------- Total depreciation and amortization 44 39 ------------- ------------- EBITDA (Operating profit (loss) + depreciation and amortization) Barnes & Noble Bookstores 57 32 Barnes & Noble.com (a) (4) - ------------- ------------- Total Book operating segment 53 32 GameStop Total Video Game operating segment (b) 12 11 ------------- ------------- Total EBITDA 65 43 ------------- ------------- EPS Barnes & Noble Bookstores 0.21 (0.05) Barnes & Noble.com (c) (0.10) (0.04) ------------- ------------- Total Book operating segment 0.11 (0.09) GameStop Total Video Game operating segment (b) 0.06 0.06 ------------- ------------- Total EPS 0.17 (0.03) ------------- ------------- Weighted average shares outstanding 70,717 64,867 (a) Barnes & Noble.com has been consolidated since September 15, 2003, the date of acquiring Bertelsmann's interest. (b) Based on Barnes & Noble, Inc.'s percentage ownership interest in GameStop, approximately 63%. (c) 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 --------------------------- May 1, 2004 May 3, 2003 ------------- ------------- Sales $ 1,452,845 1,185,605 Cost of sales and occupancy 1,067,978 884,960 ------------- ------------- Gross profit 384,867 300,645 ------------- ------------- Selling and administrative expenses 309,274 250,673 Depreciation and amortization 44,717 39,040 Pre-opening expenses 2,631 1,502 ------------- ------------- Operating profit 28,245 9,430 Interest expense, net (4,327) (4,643) Equity in net loss of Barnes & Noble.com - (4,972) ------------- ------------- Income (loss) before taxes and minority interest 23,918 (185) Income taxes 9,541 (75) ------------- ------------- Income (loss) before minority interest 14,377 (110) Minority interest (1,923) (1,916) ------------- ------------- Net income (loss) 12,454 (2,026) ============= ============= Income (loss) per common share: Basic $ 0.18 (0.03) Diluted $ 0.17 (0.03) Weighted average common shares outstanding Basic 68,146,000 64,867,000 Diluted 70,717,000 64,867,000 Percentage of sales: Sales 100.0% 100.0% Cost of sales and occupancy 73.5% 74.6% ------------- ------------- Gross profit 26.5% 25.4% ------------- ------------- Selling and administrative expenses 21.3% 21.1% Depreciation and amortization 3.1% 3.3% Pre-opening expenses 0.2% 0.2% ------------- ------------- Operating profit 1.9% 0.8% Interest expense, net -0.3% -0.4% Equity in net loss of Barnes & Noble.com 0.0% -0.4% ------------- ------------- Income (loss) before taxes and minority interest 1.6% 0.0% Income taxes 0.6% 0.0% ------------- ------------- Income (loss) before minority interest 1.0% 0.0% Minority interest -0.1% -0.2% ------------- ------------- Net income (loss) 0.9% -0.2% ============= ============= BARNES & NOBLE, INC. AND SUBSIDIARIES Consolidated Balance Sheets (thousands of dollars, except per share data) January 31, May 1, 2004 May 3, 2003 2004 ----------- ----------- ----------- ASSETS Current assets: Cash and cash equivalents $ 354,163 195,987 487,200 Receivables, net 52,151 64,014 60,529 Barnes & Noble.com receivable - 35,920 - Merchandise inventories 1,525,834 1,418,377 1,526,156 Prepaid expenses and other current assets 117,712 103,539 119,604 ----------- ----------- ----------- Total current assets 2,049,860 1,817,837 2,193,489 ----------- ----------- ----------- Property and equipment: Land and land improvements 15,276 3,247 3,247 Buildings and leasehold improvements 529,645 491,278 533,272 Fixtures and equipment 1,163,141 949,266 1,141,317 ----------- ----------- ----------- 1,708,062 1,443,791 1,677,836 Less accumulated depreciation and amortization 1,022,677 842,580 991,187 ----------- ----------- ----------- Net property and equipment 685,385 601,211 686,649 ----------- ----------- ----------- Goodwill 509,244 391,704 509,244 Intangible assets, net 93,222 47,713 94,574 Investment in Barnes & Noble.com - 19,782 - Other noncurrent assets 22,695 23,009 23,338 ----------- ----------- ----------- Total assets $3,360,406 2,901,256 3,507,294 =========== =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 792,198 661,556 858,068 Accrued liabilities 480,622 420,861 583,773 ----------- ----------- ----------- Total current liabilities 1,272,820 1,082,417 1,441,841 ----------- ----------- ----------- Long-term debt 300,000 357,000 300,000 Deferred income taxes 169,960 119,845 170,066 Other long-term liabilities 108,493 115,142 108,441 Minority interest 230,934 202,979 227,287 Shareholders' equity: Common stock; $.001 par value; 300,000,000 shares authorized; 77,213,364, 73,470,067 and 76,854,856 shares issued, respectively 77 73 77 Additional paid-in capital 926,944 832,339 914,319 Accumulated other comprehensive loss (8,756) (11,032) (8,579) Retained earnings 555,957 389,624 543,503 Treasury stock, at cost, 9,007,700, 8,807,700 and 8,807,700 shares, respectively (196,023) (187,131) (189,661) ----------- ----------- ----------- Total shareholders' equity 1,278,199 1,023,873 1,259,659 ----------- ----------- ----------- Commitments and contingencies - - - ----------- ----------- ----------- Total liabilities and shareholders' equity $3,360,406 2,901,256 3,507,294 =========== =========== =========== BARNES & NOBLE, INC. AND SUBSIDIARIES First Quarter Summary Pro Forma as if the Company Owned 100% of Barnes & Noble.com at the Beginning of Fiscal 2003 ($ in millions, except per share amounts) 13 weeks ended -------------------------- May 1, 2004 May 3, 2003 ------------- ----------- Sales Barnes & Noble Bookstores $ 966 864 Barnes & Noble.com (a) 115 106 ------------- ----------- Total Book operating segment 1,081 970 GameStop Total Video Game operating segment 372 322 ------------- ----------- Total sales 1,453 1,292 ------------- ----------- Operating profit (loss) Barnes & Noble Bookstores 27 (1) Barnes & Noble.com (a) (10) (13) ------------- ----------- Total Book operating segment 17 (14) GameStop Total Video Game operating segment 11 11 ------------- ----------- Total operating profit (loss) 28 (3) ------------- ----------- Depreciation and amortization Barnes & Noble Bookstores 30 33 Barnes & Noble.com (a) 6 7 ------------- ----------- Total Book operating segment 36 40 GameStop Total Video Game operating segment 8 6 ------------- ----------- Total depreciation and amortization 44 46 ------------- ----------- EBITDA (Operating profit (loss) + depreciation and amortization) Barnes & Noble Bookstores 57 32 Barnes & Noble.com (a) (4) (6) ------------- ----------- Total Book operating segment 53 26 GameStop Total Video Game operating segment (b) 12 11 ------------- ----------- Total EBITDA 65 37 ------------- ----------- EPS Barnes & Noble Bookstores 0.21 (0.05) Barnes & Noble.com (a) (0.10) (0.12) ------------- ----------- Total Book operating segment 0.11 (0.17) GameStop Total Video Game operating segment (b) 0.06 0.06 ------------- ----------- Total EPS 0.17 (0.11) ------------- ----------- Weighted average shares outstanding 70,717 64,867 (a) For pro forma purposes only, the company has included 100% of the results of Barnes & Noble.com for all periods presented. (b) Based on Barnes & Noble, Inc.'s percentage ownership interest in GameStop, approximately 63%. BARNES & NOBLE, INC. AND SUBSIDIARIES Consolidated Statements of Operations Pro Forma as if the Company Owned 100% of Barnes & Noble.com at the Beginning of Fiscal 2003 (thousands of dollars, except per share data) 13 weeks ended ----------------------- May 1, 2004 May 3, 2003 ----------- ----------- Sales $1,452,845 1,291,569 Cost of sales and occupancy 1,067,978 967,586 ----------- ----------- Gross profit 384,867 323,983 ----------- ----------- Selling and administrative expenses 309,274 279,933 Depreciation and amortization 44,717 46,393 Pre-opening expenses 2,631 1,502 ----------- ----------- Operating profit 28,245 (3,845) Interest expense, net (4,327) (4,506) ----------- ----------- Income (loss) before taxes and minority interest 23,918 (8,351) Income taxes 9,541 (3,428) ----------- ----------- Income (loss) before minority interest 14,377 (4,923) Minority interest (1,923) (1,916) ----------- ----------- Net income (loss) 12,454 (6,839) =========== =========== Income (loss) per common share: Basic $ 0.18 (0.11) Diluted $ 0.17 (0.11) Weighted average common shares outstanding Basic 68,146,000 64,867,000 Diluted 70,717,000 64,867,000 Percentage of sales: Sales 100.0% 100.0% Cost of sales and occupancy 73.5% 74.9% ----------- ----------- Gross profit 26.5% 25.1% ----------- ----------- Selling and administrative expenses 21.3% 21.7% Depreciation and amortization 3.1% 3.6% Pre-opening expenses 0.2% 0.1% ----------- ----------- Operating profit 1.9% -0.3% Interest expense, net -0.3% -0.3% ----------- ----------- Income (loss) before taxes and minority interest 1.6% -0.6% Income taxes 0.6% -0.2% ----------- ----------- Income (loss) before minority interest 1.0% -0.4% Minority interest -0.1% -0.1% ----------- ----------- Net income (loss) 0.9% -0.5% =========== =========== CONTACT: Barnes & Noble, Inc. Media: Mary Ellen Keating, 212-633-3323 or Investor Relations: Joseph J. Lombardi, 212-633-3215 -----END PRIVACY-ENHANCED MESSAGE-----