-----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, EJyfOtuKqb+YGD8BU3qmzmZUrozqUzuu7SZklcaFTD1EHtX0LcuxhtMzth0uvY6A FboQlR0F9gl4z2plEeHhgw== 0001157523-06-011430.txt : 20061116 0001157523-06-011430.hdr.sgml : 20061116 20061116084542 ACCESSION NUMBER: 0001157523-06-011430 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20061116 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20061116 DATE AS OF CHANGE: 20061116 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: 061221638 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 a5276145.txt BARNES & NOBLE, INC. 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 16, 2006 -------------------------------- 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 16, 2006, Barnes & Noble, Inc. (the "Company") issued a press release announcing its preliminary financial results for the third quarter ended October 28, 2006 (the "Press Release"). A copy of the Press Release is attached hereto as Exhibit 99.1. The information in this Form 8-K and the Exhibit attached hereto pertaining to the Company's preliminary financial results shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing. Item 8.01 Other Events The Press Release also announced the status of the review of the Company's historical stock option grant practices currently being conducted by a Special Committee of the Company's Board of Directors, assisted by independent legal counsel, and indicated that the Company will not be in a position to file its Quarterly Report on Form 10-Q for the quarter ended October 28, 2006 in a timely manner. The Press Release further indicated that the Company will not purchase shares under its stock repurchase program until it completes all required filings. Item 9.01 Financial Statements and Exhibits (c) Exhibits 99.1 Press Release of Barnes & Noble, Inc., dated November 16, 2006 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 16, 2006 Barnes & Noble, Inc. EXHIBIT INDEX Exhibit Number Description - -------------- ----------- 99.1 Press Release of Barnes & Noble, Inc., dated November 16, 2006 EX-99.1 2 a5276145ex99_1.txt EXHIBIT 99.1 Exhibit 99.1 Barnes & Noble Reports Preliminary Third Quarter Financial Results: Achieves Earnings per Share Guidance Declares Quarterly Dividend NEW YORK--(BUSINESS WIRE)--Nov. 16, 2006--Barnes & Noble, Inc. (NYSE: BKS), the world's largest bookseller, today reported preliminary financial results for the third quarter ended October 28, 2006. The company also announced that its Board of Directors declared a quarterly cash dividend of $0.15 per share for stockholders of record at the close of business on December 8, 2006, payable on December 29, 2006. Sales for the third quarter increased 3% to $1.1 billion. Barnes & Noble store sales increased 4% to $972.1 million, with comparable store sales increasing 2.0% for the quarter. B. Dalton sales were $20.5 million for the quarter, a 28% decrease due to store closings and a 5.0% comparable store sales decline. Barnes & Noble.com sales were $95.8 million for the quarter, a 0.5% comparable sales decline compared to the prior year period. Bestselling titles during the quarter included Dianne Setterfield's "The Thirteenth Tale," Mitch Album's "For One More Day," Barack Obama's "The Audacity of Hope," Lemony Snicket's "The End" and John Grisham's "The Innocent Man." Third quarter preliminary net losses were $2.8 million or $0.04 per share, in-line with company guidance of a loss of $0.04 to $0.08 per share. Third quarter results include a $0.03 per share impact due to stock compensation expense as the company has adopted Statement of Financial Accounting Standards No. 123(R) (As Amended), "Share-Based Payment" (SFAS 123(R)), and began expensing stock options at the beginning of fiscal year 2006. As discussed below in more detail, the company will not be in a position to finalize its financial results and the related financial statements until the special committee of its Board of Directors has completed its internal review of the company's historical option grant practices with the assistance of independent legal counsel, and the company is able to determine what, if any, impact the results of that investigation will have on its financial statements. GUIDANCE For the fourth quarter, the company expects comparable store sales at Barnes & Noble stores to range from flat to an increase in the low single-digits. Based on year-to-date results and current trends, the company now expects full year comparable store sales to range from flat to a slight increase over last year. Barnes & Noble, Inc.'s fourth quarter earnings per share is expected to be in a range of $1.86 to $1.96. The company continues to expect full year earnings per share to be in a range of $2.20 to $2.30. Incorporated in the company's fourth quarter and full year guidance are stock compensation expenses of $0.03 per share and a $0.14 per share, respectively, due to the adoption of SFAS 123(R) noted above. As of October 28, 2006, the company operated 692 Barnes & Noble stores and 109 B. Dalton stores. During the third quarter, 11 Barnes & Noble stores were opened and six were closed. Three B. Dalton stores were closed during the quarter. REVIEW OF STOCK OPTION PRACTICES As previously announced, a special committee of Barnes & Noble's Board of Directors is conducting an internal review of the company's historical stock option grant practices. The committee, which has retained independent legal counsel, is working to complete its review of the company's historical stock option grant practices in a timely manner. At this time, the committee and independent legal counsel have not finished their work and have not reached any conclusions. Accordingly, the company has not yet determined whether it will be required to record additional non-cash stock based compensation expense related to stock option grants, and the preliminary results, related financial statements and guidance set forth above do not include any such additional charges and are subject to adjustment based on the results of the internal review. Given these circumstances, the company will not be in a position to file its Quarterly Report on Form 10-Q for the quarter ended October 28, 2006 in a timely manner. The company plans to become current in its periodic reports required under the Securities Exchange Act of 1934, as amended, as soon as practicable following the completion of the committee's review. Additionally, the company will not purchase shares under its stock repurchase program until it completes all required filings. A conference call with Barnes & Noble, Inc.'s senior management will be webcast beginning at 11:00 A.M. ET on Thursday, November 16, 2006, and is accessible at www.barnesandnobleinc.com/webcasts. The call will also be archived at www.earnings.com for one year. Barnes & Noble, Inc. will report holiday sales on or about January 4, 2007. ABOUT BARNES & NOBLE, INC. Barnes & Noble, Inc. (NYSE: BKS), the world's largest bookseller and a Fortune 500 company, operates 801 bookstores in 50 states. For the fifth 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 online bookseller for quality among e-commerce companies, according to the latest EquiTrend survey. General information on Barnes & Noble, Inc. can be obtained via the Internet by visiting the company's corporate Web site: http://www.barnesandnobleinc.com. 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, the results of the internal review of the company's stock option practices and the related inquiries by the Securities and Exchange Commission and the U.S. Department of Justice and related stockholder derivative lawsuits, 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, the successful integration of the company's new New Jersey distribution center, 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 Consolidated Statements of Operations (In thousands, except per share data) - ---------------------------------------------- ----------------------- 13 weeks ended 39 weeks ended ----------------------- ----------------------- October 28, October 29, October 28, October 29, 2006 2005 2006 2005 ----------------------- ----------------------- Sales $1,111,958 1,081,785 3,382,852 3,349,755 Cost of sales and occupancy 780,933 761,808 2,363,555 2,359,117 ----------- ----------- ----------- ----------- Gross profit 331,025 319,977 1,019,297 990,638 ----------- ----------- ----------- ----------- Selling and administrative expenses 290,391 272,280 850,212 813,721 Depreciation and amortization 41,694 43,892 123,466 130,401 Pre-opening expenses 4,501 4,161 10,486 9,270 ----------- ----------- ----------- ----------- Operating profit (loss) (5,561) (356) 35,133 37,246 Interest expense, net (894) (917) (108) (1,911) ----------- ----------- ----------- ----------- Income (loss) before taxes and minority interest (6,455) (1,273) 35,025 35,335 Income taxes (2,630) (519) 14,273 14,399 ----------- ----------- ----------- ----------- Income (loss) before minority interest (3,825) (754) 20,752 20,936 Minority interest 1,053 1,081 3,043 2,764 ----------- ----------- ----------- ----------- Net income (loss) $(2,772) 327 23,795 23,700 =========== =========== =========== =========== Income (loss) per common share: Basic $(0.04) 0.00 0.36 0.35 Diluted $(0.04) 0.00 0.34 0.33 Weighted average common shares outstanding Basic 64,947 66,819 65,254 68,288 Diluted 64,947 71,257 69,244 72,915 Percentage of sales: Sales 100.0% 100.0% 100.0% 100.0% Cost of sales and occupancy 70.2% 70.4% 69.9% 70.4% ----------- ----------- ----------- ----------- Gross profit 29.8% 29.6% 30.1% 29.6% ----------- ----------- ----------- ----------- Selling and administrative expenses 26.1% 25.2% 25.1% 24.3% Depreciation and amortization 3.7% 4.1% 3.6% 3.9% Pre-opening expenses 0.4% 0.4% 0.3% 0.3% ----------- ----------- ----------- ----------- Operating profit (loss) -0.5% 0.0% 1.0% 1.1% Interest expense, net -0.1% -0.1% 0.0% -0.1% ----------- ----------- ----------- ----------- Income (loss) before taxes and minority interest -0.6% -0.1% 1.0% 1.1% Income taxes -0.2% 0.0% 0.4% 0.4% ----------- ----------- ----------- ----------- Income (loss) before minority interest -0.3% -0.1% 0.6% 0.6% Minority interest 0.1% 0.1% 0.1% 0.1% ----------- ----------- ----------- ----------- Net income (loss) -0.2% 0.0% 0.7% 0.7% =========== =========== =========== =========== BARNES & NOBLE, INC. AND SUBSIDIARIES Consolidated Balance Sheets (In thousands, except per share data) - ---------------------------------------------------------------------- October 28, October 29, January 28, 2006 2005 2006 ----------- ----------- ----------- ASSETS Current assets: Cash and cash equivalents $19,888 23,038 372,586 Receivables, net 129,053 115,823 99,117 Merchandise inventories 1,639,013 1,563,502 1,313,997 Prepaid expenses and other current assets 80,363 126,714 74,476 ----------- ----------- ----------- Total current assets 1,868,317 1,829,077 1,860,176 ----------- ----------- ----------- Property and equipment: Land and land improvements 3,247 3,247 3,247 Buildings and leasehold improvements 982,849 993,536 984,535 Fixtures and equipment 1,284,023 1,143,168 1,174,973 ----------- ----------- ----------- 2,270,119 2,139,951 2,162,755 Less accumulated depreciation and amortization 1,464,750 1,331,551 1,356,379 ----------- ----------- ----------- Net property and equipment 805,369 808,400 806,376 ----------- ----------- ----------- Goodwill 260,637 264,826 263,731 Intangible assets, net 91,814 94,548 93,834 Deferred taxes 115,400 124,603 114,046 Other noncurrent assets 11,943 24,072 25,969 ----------- ----------- ----------- Total assets $3,153,480 3,145,526 3,164,132 =========== =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $1,016,564 1,009,006 828,852 Accrued liabilities 530,453 536,191 683,816 ----------- ----------- ----------- Total current liabilities 1,547,017 1,545,197 1,512,668 ----------- ----------- ----------- Long-term debt 34,100 62,000 - Deferred taxes 158,035 193,743 158,035 Other long-term liabilities 374,035 369,038 367,531 Minority interest 5,829 5,349 10,057 Shareholders' equity: Common stock; $.001 par value; 300,000 shares authorized; 84,528, 81,659 and 83,370 shares issued, respectively 85 82 83 Additional paid-in capital 1,134,306 1,045,852 1,091,018 Accumulated other comprehensive loss (8,713) (10,271) (9,085) Retained earnings 506,474 399,553 512,594 Treasury stock, at cost, 19,520, 16,315 and 16,690 shares, respectively (597,688) (465,017) (478,769) ----------- ----------- ----------- Total shareholders' equity 1,034,464 970,199 1,115,841 ----------- ----------- ----------- Commitments and contingencies - - - ----------- ----------- ----------- Total liabilities and shareholders' equity $3,153,480 3,145,526 3,164,132 =========== =========== =========== CONTACT: Barnes & Noble, Inc. Media: Mary Ellen Keating, 212-633-3323 Senior Vice President Corporate Communications or Investor: Joseph J. Lombardi, 212-633-3215 Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----