Basis of Presentation

9 Months Ended

Oct. 29, 2011

Basis of Presentation [Abstract]

Basis of Presentation

1. Basis of Presentation

The unaudited condensed consolidated financial statements include the accounts of Books-A-Million, Inc. and its subsidiaries (collectively, the “Company”). The Company consists of Books-A-Million, Inc. and its four wholly-owned subsidiaries, American Wholesale Book Company, Inc., Booksamillion.com, Inc., BAM Card Services, LLC and AL Florence Realty Holdings 2010, LLC. All inter-company balances and transactions have been eliminated in consolidation. For a discussion of the Company’s business segments, see Note 7.

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and are presented pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain financial information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended January 29, 2011. In the opinion of management, the unaudited condensed consolidated financial statements included herein contain all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of our financial position as of October 29, 2011 and January 29, 2011 and the results of our operations and cash flows for the periods presented. Quarterly results of operations are not necessarily indicative of annual results.

The Company’s business, like that of many retailers, is seasonal, with a large portion of sales and operating profit realized during the fourth fiscal quarter, which includes the holiday selling season.

Certain insignificant reclassifications to amounts included in this report for prior periods were necessary to conform to the presentation of the thirteen and thirty-nine weeks ended October 29, 2011.

Stock-Based Compensation

The Company’s pre-tax compensation cost for stock-based employee compensation was $0.4 million, or $0.2 million net of taxes, and $0.04 million, or $0.02 million net of taxes, for the thirteen weeks ended October 29, 2011 and October 30, 2010, respectively. The Company’s pre-tax compensation cost for stock-based employee compensation was $1.1 million, or $0.7 million net of taxes, and $0.8 million, or $0.6 million net of taxes, for the thirty-nine weeks ended October 29, 2011 and October 30, 2010, respectively.

Stock Option Plan

A summary of the status of the Company’s Amended and Restated Stock Option Plan (the “Stock Option Plan”) is as follows (shares in thousands):

	Thirty-nine Weeks Ended
	October 29, 2011
				Weighted
				Average
				Exercise
	Shares			Price
Options outstanding at beginning of period		35		$	5.56
Options granted		—			N/A
Options exercised		—			N/A
Options forfeited		(2	)		4.10
Options outstanding at end of period		33		$	5.65
Options exercisable at end of period		33		$	5.65

The following table summarizes information about stock options outstanding and exercisable under the Stock Option Plan as of October 29, 2011 (shares in thousands):

	Options Outstanding						Options Exercisable
			Weighted
	Options		Average		Weighted		Options		Weighted
	Outstanding at		Remaining		Average		Exercisable at		Average
Range of	October 29,		Contractual		Exercise		October 29,		Exercise
Exercise Price	2011		Life (Years)		Price		2011		Price
$2.16 - $2.37		6		1.26	$	2.36		6	$	2.36
$3.04 - $3.04		6		0.26	$	3.04		6	$	3.04
$6.13 - $9.62		21		2.50	$	7.36		21	$	7.36
Totals		33		1.86	$	5.65		33	$	5.65

The aggregate intrinsic value for outstanding and exercisable options under the Stock Option Plan at October 29, 2011 was approximately $(0.1) million.

2005 Incentive Award Plan

On May 20, 2010, the stockholders of the Company approved an additional 800,000 shares available for issuance under the Books-A-Million, Inc. 2005 Incentive Award Plan, as amended (the “2005 Plan”). An aggregate of 2,000,000 shares of common stock may be awarded under the 2005 Plan, as amended. From June 1, 2005 through October 29, 2011, equity awards under the 2005 Plan have consisted solely of awards of restricted stock. As of October 29, 2011, the number of shares of common stock currently reserved for issuance under the 2005 Plan for outstanding stock-based awards was 717,730 shares.

Restricted Stock Table

A summary of the status of restricted stock grants to employees and directors under the 2005 Plan is as follows (shares in thousands):

	Thirty-nine Weeks Ended
	October 29, 2011
				Weighted Average
				Grant Date Fair
	Shares			Value
Shares at beginning of period		396		$	7.19
Shares granted		352			4.49
Shares vested		(12	)		6.78
Shares forfeited		(30	)		5.90
Shares at end of period		706		$	5.91

The Company’s unvested restricted stock receives all dividends and retains voting rights for the granted shares.

Other Information

As of October 29, 2011, the Company had approximately $1.8 million of total unrecognized compensation cost related to non-vested awards granted under its various share-based plans, which it expects to recognize over the following fiscal years:

	Stock-Based
	Compensation
Fiscal Year	Expense
2012	$	432,000
2013		877,000
2014		450,000
2015		58,000
Total	$	1,817,000

There were no options exercised during the thirty-nine week period ended October 29, 2011. The Company received cash from options exercised during the thirty-nine week period ended October 30, 2010 of approximately $4,700.

The Company maintains an employee stock purchase plan (the “Amended and Restated Employee Stock Purchase Plan”) under which shares of the Company’s common stock are reserved for purchase by employees at 85% of the fair market value of the common stock at the lower of the market value for the Company’s stock as of the beginning of the fiscal year or the end of the fiscal year. On May 20, 2010, the stockholders of the Company approved a second amendment to the Amended and Restated Employee Stock Purchase Plan to increase the number of shares available for issuance under the plan by 200,000 shares of common stock. An aggregate of 600,000 shares are available for issuance to participants in the Amended and Restated Employee Stock Purchase Plan. The Company received cash proceeds from issuances of stock under the Amended and Restated Employee Stock Purchase Plan during each of the thirty-nine week periods ended October 29, 2011 and October 30, 2010 of $0.1 million. The impact of these cash receipts is included in financing activities in the accompanying condensed consolidated statements of cash flows.