-----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, WQhdStZQ8tW2fURE5d8HbZH0eTADYaBqjAf3JHT85+bKFzLUKVnG1QLPrLP6bP5Y onu2NIvijK9/3SfWaC1Gbg== 0001157523-04-010732.txt : 20041115 0001157523-04-010732.hdr.sgml : 20041115 20041115090150 ACCESSION NUMBER: 0001157523-04-010732 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041115 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041115 DATE AS OF CHANGE: 20041115 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: 041141900 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 a4765467.txt BARNES & NOBLE 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 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 15, 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) (212) 633-3300 - -------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02 Results of Operations and Financial Condition On November 15, 2004, Barnes & Noble, Inc. (the "Company") issued a press release announcing its financial results for the third quarter ended October 30, 2004. 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"), 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 and 39 weeks ended October 30, 2004 and November 1, 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. Furthermore, in the press release attached hereto as Exhibit 99.1, the Company provides certain financial results which exclude the one-time charge relating to the redemption of its convertible subordinated notes. This one-time charge was to write-off the unamortized portion of the deferred financing fees from the issuance of the notes and for payment of the redemption premium. 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 Company has also provided certain financial results which exclude a one-time charge relating to the redemption of its convertible subordinated notes because the Company believes that such information also provides investors a better understanding of the Company's current operating results and provides 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. Item 9.01 Financial Statements and Exhibits (c) Exhibits 99.1 Press Release of Barnes & Noble, Inc., dated November 15, 2004 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: November 15, 2004 Barnes & Noble, Inc. EXHIBIT INDEX Exhibit Number Description - -------------- ----------- 99.1 Press Release of Barnes & Noble, Inc., dated November 15, 2004 EX-99.1 2 a4765467ex991.txt BARNES & NOBLE 8-K Exhibit 99.1 Barnes & Noble Reports Third Quarter Earnings In-Line with Guidance; Affirms Full-Year Guidance; Completes Spin-Off of GameStop NEW YORK--(BUSINESS WIRE)--Nov. 15, 2004--Barnes & Noble, Inc. (NYSE: BKS), the world's largest bookseller, today reported sales and earnings for the third quarter ended October 30, 2004. THIRD QUARTER RESULTS Barnes & Noble store sales were $894.9 million for the quarter, an increase of 4% over the prior year. Third quarter comparable store sales increased 0.9%. The company opened nine new Barnes & Noble stores and closed three locations ending the quarter with 663 stores. B. Dalton sales, which comprise approximately 3% of total bookstore sales, were $35.9 million for the quarter, a decrease of (19%) over the prior year, due primarily to store closings. The company closed seven stores ending the quarter with 176 stores. Third quarter comparable store sales decreased (3.3)%. Earnings for the bookstore business were $0.09 per share in the third quarter, versus guidance of $0.08 to $0.10 per share. Bookstore earnings were $0.10 per share in the year-ago period. Year-to-date earnings per share for the bookstore business were $0.59 compared to $0.24 for the same period last year. "We are encouraged that we were able to achieve our sales goal for the third quarter in light of the challenging sales comparisons from last year," said Steve Riggio, chief executive officer of Barnes & Noble, Inc. "Sales of DVD, juvenile and cafe products were especially encouraging while sales of bestsellers were soft owing to the difficult comparisons against last year's strong sales of bestselling books." Barnes & Noble.com's third quarter sales on a pro-forma basis decreased 8% to $91.8 million, resulting in a net loss of ($6.4) million, or ($0.09) per share, versus guidance of ($0.08) to ($0.09) per share. In the year-ago period, net loss was ($0.11) per share on a pro-forma basis, as if Barnes & Noble.com was 100% owned in the prior year. Earlier today, GameStop reported sales of $416.7 million for the quarter, an increase of 28% over the prior year period. Third quarter comparable store sales increased 11.8%. Barnes & Noble's portion of GameStop's third quarter earnings is based on a 59% ownership interest. Barnes & Noble's share of net earnings was $7.2 million, or $0.10 per share, for the quarter, versus guidance of $0.08 to $0.09 per share. Barnes & Noble's share of net earnings was $0.09 per share in the year-ago period. Consolidated net earnings for the third quarter were $7.6 million, or $0.10 per share, versus guidance of $0.07 to $0.11 per share. In the year-ago period, consolidated net earnings was $0.08 per share on a pro-forma basis, as if Barnes & Noble.com was 100% owned in the prior year. GUIDANCE The company reaffirms previously announced guidance for the fourth quarter and the full year. Consolidated earnings per share guidance is projected to be between $1.51 and $1.56 for the fourth quarter and $1.96 and $2.04 for the full year, excluding the second quarter debt redemption charge. Excluding GameStop, full-year earnings for the bookselling segment is expected to grow approximately 30%, ranging from $1.78 to $1.84 per share, versus $1.41 per share on a pro-forma basis last year. GAMESTOP SPIN-OFF The company also noted that Friday, November 12, 2004 was the distribution date for the spin-off of GameStop, the nation's largest video-game and entertainment software specialty retailer. Today is the first day that Barnes & Noble and GameStop (NYSE: GME) and (NYSE: GME.B) will trade only as separate public companies. A conference call with Barnes & Noble, Inc.'s senior management will be webcast beginning at 11:00 A.M. ET on Monday, November 15, 2004, and is accessible at www.barnesandnobleinc.com/financials. The call will also be archived at www.fulldisclosure.com for one year. Barnes & Noble, Inc. will report holiday sales on January 6, 2005. ABOUT BARNES & NOBLE, INC. Barnes & Noble, Inc. (NYSE: BKS), the world's largest bookseller and a Fortune 500 company, operates 839 bookstores in 50 states. For the third year in a row, the company is the nation's top retail brand for quality, according to the EquiTrend(R) Brand Study by Harris Interactive(R). Barnes & Noble conducts its online business through Barnes & Noble.com (www.bn.com), one of the Web's largest e-commerce sites and the number-one brand among e-commerce companies, according to the latest EquiTrend survey. In addition to its retail operations, Barnes & Noble is one of the largest book publishers in the world. Its subsidiary, Sterling Publishing, publishes over 1,300 new titles a year and has an active list of over 6,000 titles. 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 ----------------- ----------------- October November October November 30, 1, 30, 1, 2004 2003 2004 2003 --------- -------- ------- -------- Sales Barnes & Noble Bookstores $950 926 2,933 2,768 Barnes & Noble.com (a) 92 18 268 18 --------- -------- ------- -------- Total Book operating segment 1,042 944 3,201 2,786 GameStop Total Video Game operating segment 417 326 1,134 953 --------- -------- ------- -------- Total sales 1,459 1,270 4,335 3,739 --------- -------- ------- -------- Operating profit (loss) Barnes & Noble Bookstores 12 15 75 39 Barnes & Noble.com (a) (11) (2) (34) (2) --------- -------- ------- -------- Total Book operating segment 1 13 41 37 GameStop Total Video Game operating segment 20 18 43 40 --------- -------- ------- -------- Total operating profit 21 31 84 77 --------- -------- ------- -------- Depreciation and amortization Barnes & Noble Bookstores 32 32 93 97 Barnes & Noble.com (a) 6 1 19 1 --------- -------- ------- -------- Total Book operating segment 38 33 112 98 GameStop Total Video Game operating segment 9 8 26 21 --------- -------- ------- -------- Total depreciation and amortization 47 41 138 119 --------- -------- ------- -------- EBITDA (Operating profit (loss) + depreciation and amortization) Barnes & Noble Bookstores 44 47 168 136 Barnes & Noble.com (a) (5) (1) (15) (1) --------- -------- ------- -------- Total Book operating segment 39 46 153 135 GameStop Total Video Game operating segment (b) 18 16 43 38 --------- -------- ------- -------- Total EBITDA 57 62 196 173 --------- -------- ------- -------- EPS Barnes & Noble Bookstores 0.09 0.10 0.59 0.24 Barnes & Noble.com (c) (0.09) (0.05) (0.31) (0.15) --------- -------- ------- -------- Total Book operating segment - 0.05 0.28 0.09 GameStop Total Video Game operating segment (b) 0.10 0.09 0.22 0.22 --------- -------- ------- -------- Consolidated before debt redemption charge 0.10 0.14 0.50 0.31 Debt redemption charge (d) - - (0.12) - --------- -------- ------- -------- Consolidated GAAP EPS 0.10 0.14 0.38 0.31 --------- -------- ------- -------- Weighted average shares outstanding 72,049 68,704 71,273 67,075 (a) Barnes & Noble.com has been consolidated since September 15, 2003. (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. (d) One-time charge of $14.6 million associated with the redemption of the convertible notes. BARNES & NOBLE, INC. AND SUBSIDIARIES Consolidated Statements of Operations (thousands of dollars, except per share data) 13 weeks ended 39 weeks ended ---------------------- ----------------------- October November October November 30, 1, 30, 1, 2004 2003 2004 2003 ----------- ----------- ------------- ------------- Sales $1,459,014 1,270,072 4,334,889 3,738,920 Cost of sales and occupancy 1,065,346 921,823 3,162,898 2,753,053 ----------- ----------- ------------- ------------- Gross profit 393,668 348,249 1,171,991 985,867 ----------- ----------- ------------- ------------- Selling and administrative expenses 323,608 273,063 942,610 782,920 Depreciation and amortization 46,927 40,492 137,644 118,778 Pre-opening expenses 2,384 3,186 7,637 7,146 ----------- ----------- ------------- ------------- Operating profit 20,749 31,508 84,100 77,023 Interest expense, net (2,249) (5,430) (10,105) (14,783) Debt redemption charge - - (14,582) - Equity in net loss of Barnes & Noble.com - (3,935) - (14,311) ----------- ----------- ------------- ------------- Income before taxes and minority interest 18,500 22,143 59,413 47,929 Income taxes 7,185 8,914 23,528 19,292 ----------- ----------- ------------- ------------- Income before minority interest 11,315 13,229 35,885 28,637 Minority interest (3,673) (3,057) (7,892) (6,827) ----------- ----------- ------------- ------------- Net income 7,642 10,172 27,993 21,810 =========== =========== ============= ============= Income per common share: Basic $0.11 0.15 0.41 0.33 Diluted $0.10 0.14 0.38 0.31 Weighted average common shares outstanding Basic 69,443,000 66,664,000 68,727,000 65,461,000 Diluted 72,049,000 68,704,000 71,273,000 67,075,000 Percentage of sales: Sales 100.0% 100.0% 100.0% 100.0% Cost of sales and occupancy 73.0% 72.6% 73.0% 73.6% ----------- ----------- ------------- ------------- Gross profit 27.0% 27.4% 27.0% 26.4% ----------- ----------- ------------- ------------- Selling and administrative expenses 22.2% 21.5% 21.7% 20.9% Depreciation and amortization 3.2% 3.2% 3.2% 3.2% Pre-opening expenses 0.2% 0.2% 0.2% 0.2% ----------- ----------- ------------- ------------- Operating profit 1.4% 2.5% 1.9% 2.1% Interest expense, net -0.1% -0.4% -0.2% -0.4% Debt redemption charge 0.0% 0.0% -0.4% 0.0% Equity in net loss of Barnes & Noble.com 0.0% -0.30% 0.0% -0.4% ----------- ----------- ------------- ------------- Income before taxes and minority interest 1.3% 1.7% 1.4% 1.3% Income taxes 0.5% 0.7% 0.5% 0.5% ----------- ----------- ------------- ------------- Income before minority interest 0.8% 1.0% 0.8% 0.8% Minority interest -0.3% -0.2% -0.2% -0.2% ----------- ----------- ------------- ------------- Net income 0.5% 0.8% 0.6% 0.6% =========== =========== ============= ============= BARNES & NOBLE, INC. AND SUBSIDIARIES Consolidated Balance Sheets (thousands of dollars, except per share data) - ---------------------------------------------------------------------- October November January 30, 2004 1, 2003 31, 2004 --------------------------------- ASSETS Current assets: Cash and cash equivalents $185,871 136,671 487,200 Receivables, net 83,413 74,428 60,529 Merchandise inventories 1,810,561 1,920,266 1,526,156 Prepaid expenses and other current assets 99,439 111,777 119,604 ----------- ---------- ---------- Total current assets 2,179,284 2,243,142 2,193,489 ----------- ---------- ---------- Property and equipment: Land and land improvements 5,247 3,247 3,247 Buildings and leasehold improvements 567,194 517,541 533,272 Fixtures and equipment 1,239,576 1,176,290 1,141,317 ----------- ---------- ---------- 1,812,017 1,697,078 1,677,836 Less accumulated depreciation and amortization 1,104,069 1,034,071 991,187 ----------- ---------- ---------- Net property and equipment 707,948 663,007 686,649 ----------- ---------- ---------- Goodwill 600,632 572,206 509,244 Intangible assets, net 98,783 46,856 94,574 Other noncurrent assets 69,436 23,256 23,338 ----------- ---------- ---------- Total assets $3,656,083 3,548,467 3,507,294 =========== ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $1,075,802 1,162,014 858,068 Accrued liabilities 530,640 457,951 583,773 ----------- ---------- ---------- Total current liabilities 1,606,442 1,619,965 1,441,841 ----------- ---------- ---------- Long-term debt 245,000 311,600 300,000 Deferred income taxes 143,550 119,893 170,066 Other long-term liabilities 126,448 198,085 108,441 Minority interest 213,835 201,365 227,287 Shareholders' equity: Common stock; $.001 par value; 300,000,000 shares authorized; 78,672,574, 76,100,493 and 76,854,856 shares issued, respectively 79 76 77 Additional paid-in capital 969,976 884,645 914,319 Accumulated other comprehensive loss (8,484) (10,961) (8,579) Retained earnings 555,260 413,460 543,503 Treasury stock, at cost, 9,007,700, 8,807,700 and 8,807,700 shares, respectively (196,023) (189,661) (189,661) ----------- ---------- ---------- Total shareholders' equity 1,320,808 1,097,559 1,259,659 ----------- ---------- ---------- Commitments and contingencies - - - ----------- ---------- ---------- Total liabilities and shareholders' equity $3,656,083 3,548,467 3,507,294 =========== ========== ========== BARNES & NOBLE, INC. AND SUBSIDIARIES Third Quarter Summary Pro Forma as if the Company Owned 100% of Barnes & Noble.com at the Beginning of Fiscal 2003 ($ in millions, except per share amounts) 13 weeks ended 39 weeks ended ----------------- ----------------- October November October November 30, 1, 30, 1, 2004 2003 2004 2003 --------- -------- ------- -------- Sales Barnes & Noble Bookstores $950 926 2,933 2,768 Barnes & Noble.com (a) 92 99 268 275 -------- -------- ------- -------- Total Book operating segment 1,042 1,025 3,201 3,043 GameStop Total Video Game operating segment 417 326 1,134 953 -------- -------- ------- -------- Total sales 1,459 1,351 4,335 3,996 -------- -------- ------- -------- Operating profit (loss) Barnes & Noble Bookstores 12 15 75 39 Barnes & Noble.com (a) (11) (12) (34) (41) -------- -------- ------- -------- Total Book operating segment 1 3 41 (2) GameStop Total Video Game operating segment 20 18 43 40 -------- -------- ------- -------- Total operating profit 21 21 84 38 -------- -------- ------- -------- Depreciation and amortization Barnes & Noble Bookstores 32 32 93 97 Barnes & Noble.com (a) 6 6 19 20 -------- -------- ------- -------- Total Book operating segment 38 38 112 117 GameStop Total Video Game operating segment 9 8 26 21 -------- -------- ------- -------- Total depreciation and amortization 47 46 138 138 -------- -------- ------- -------- EBITDA (Operating profit (loss) + depreciation and amortization) Barnes & Noble Bookstores 44 47 168 136 Barnes & Noble.com (a) (5) (6) (15) (21) -------- -------- ------- -------- Total Book operating segment 39 41 153 115 GameStop Total Video Game operating segment (b) 18 16 43 38 -------- -------- ------- -------- Total EBITDA 57 57 196 153 -------- -------- ------- -------- EPS Barnes & Noble Bookstores 0.09 0.10 0.59 0.24 Barnes & Noble.com (a) (0.09) (0.11) (0.31) (0.36) -------- -------- ------- -------- Total Book operating segment - (0.01) 0.28 (0.12) GameStop Total Video Game operating segment (b) 0.10 0.09 0.22 0.22 -------- -------- ------- -------- Consolidated before debt redemption charge 0.10 0.08 0.50 0.10 Debt redemption charge (c) - - (0.12) - -------- -------- ------- -------- Consolidated GAAP EPS 0.10 0.08 0.38 0.10 -------- -------- ------- -------- Weighted average shares outstanding 72,049 68,704 71,273 67,075 (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%. (c) One-time charge of $14.6 million associated with the redemption of the convertible notes. 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 39 weeks ended ---------------------- ----------------------- October November October November 30, 1, 30, 1, 2004 2003 2004 2003 ----------- ----------- ------------- ------------- Sales $1,459,014 1,351,708 4,334,889 3,996,447 Cost of sales and occupancy 1,065,346 984,916 3,162,898 2,954,459 ------------- ----------- ------------ ------------- Gross profit 393,668 366,792 1,171,991 1,041,988 ------------- ----------- ------------ ------------- Selling and administrative expenses 323,608 297,013 942,610 859,454 Depreciation and amortization 46,927 45,496 137,644 137,479 Pre-opening expenses 2,384 3,186 7,637 7,146 ------------- ----------- ------------ ------------- Operating profit 20,749 21,097 84,100 37,909 Interest expense, net (2,249) (5,416) (10,105) (14,683) Debt redemption charge - - (14,582) - ------------- ----------- ------------ ------------- Income before taxes and minority interest 18,500 15,681 59,413 23,226 Income taxes 7,185 6,072 23,528 8,965 ------------- ----------- ------------ ------------- Income before minority interest 11,315 9,609 35,885 14,261 Minority interest (3,673) (3,057) (7,892) (6,827) ------------- ----------- ------------ ------------- Net income 7,642 6,552 27,993 7,434 ============= =========== ============ ============= Income per common share: Basic $0.11 0.10 0.41 0.11 Diluted $0.10 0.08 0.38 0.10 Weighted average common shares outstanding Basic 69,443,000 66,664,000 68,727,000 65,461,000 Diluted 72,049,000 68,704,000 71,273,000 67,075,000 Percentage of sales: Sales 100.0% 100.0% 100.0% 100.0% Cost of sales and occupancy 73.0% 72.9% 73.0% 73.9% ------------- ----------- ------------ ------------- Gross profit 27.0% 27.1% 27.0% 26.1% ------------- ----------- ------------ ------------- Selling and administrative expenses 22.2% 22.0% 21.7% 21.5% Depreciation and amortization 3.2% 3.4% 3.2% 3.4% Pre-opening expenses 0.2% 0.2% 0.2% 0.2% ------------- ----------- ------------ ------------- Operating profit 1.4% 1.6% 1.9% 0.9% Interest expense, net -0.1% -0.4% -0.2% -0.3% Debt redemption charge 0.0% 0.0% -0.4% 0.0% ------------- ----------- ------------ ------------- Income before taxes and minority interest 1.3% 1.2% 1.3% 0.6% Income taxes 0.5% 0.5% 0.5% 0.2% ------------- ----------- ------------ ------------- Income before minority interest 0.8% 0.7% 0.8% 0.4% Minority interest -0.3% -0.2% -0.2% -0.2% ------------- ----------- ------------ ------------- Net income 0.5% 0.5% 0.6% 0.2% ============= =========== ============ ============= CONTACT: Barnes & Noble, Inc. Media Contact: Mary Ellen Keating Senior Vice President Corporate Communications 212-633-3323 or Investor Contact: Joseph J. Lombardi Chief Financial Officer 212-633-3215 -----END PRIVACY-ENHANCED MESSAGE-----