Basking Ridge, NJ - Barnes & Noble Education, Inc. (NYSE: BNED), a leading solutions provider for the education industry, today reported sales and earnings for fiscal year 2024, which ended on April 27, 2024. The following figures are GAAP results from continuing operations on a consolidated basis, unless noted otherwise. Note that Adjusted EBITDA is a non-GAAP calculation.

Fiscal year 2024 revenue grew 1.6% to $1.57 billion, primarily driven by 48% growth in First Day Complete® revenue which was partially offset by lower revenues resulting from a net decrease in physical locations, many of which were closures of under-performing stores. Net loss was $(62.5) million, a $27.6 million improvement from last year. Adjusted EBITDA improved to $45.2 million for fiscal year 2024, a $53.3 million increase from a loss of $(8.1) million last year. For a reconciliation of non-GAAP measures to the most applicable GAAP measure, please see the reconciliation tables below. Improved revenues along with various cost saving and productivity initiatives were primarily responsible for the improvement.

First Day Complete saw Spring 2024 store count grow to 160 stores which represent enrollment of approximately 805,000 undergraduate and post-graduate students*, an increase of 39% compared to last year. The Company continues to focus on expanding First Day Complete adoptions and anticipates further growth in this program in fiscal year 2025. The Company ended the quarter with 1,245 physical and virtual stores.

Net debt increased from the prior year to $187.1 million at year end fiscal year 2024, in part due to vendors tightening payable terms as the Company worked to complete its bank refinancing. As a result of the recent closing of the milestone equity and refinancing transactions, which included the infusion of approximately $80 million of net new cash into the business and a new four-year, $325 million credit facility, payable terms have begun to return to normal. Additionally, the current level of net debt on a seasonally adjusted basis has meaningfully declined, because of the cash infusion and the conversion of approximately $34 million of second lien debt into equity.

As a result of the recent debt reduction and the normalization of Barnes & Noble Education’s banking relationships, the Company anticipates a significant ongoing reduction in interest costs, bank amendment fees, and legal and advisory expenses that have weighed on the business over the past two years.

Jonathan Shar, CEO, commented, “We sincerely thank our employees, partner institutions, vendors, and other business partners for their support and understanding. It is a relief to move past that difficult phase and embrace a fresh start. We are also grateful to Fanatics, Lids and VitalSource Technologies for their continued strategic support; we are thrilled to have them as significant shareholders moving forward.”

Shar further added, “With a significantly improved balance sheet, Barnes & Noble Education is well-positioned to advance its industry leadership while continuing to strategically invest in innovation and improve the experiences and value we bring to our customers and partner institutions. Our focus will remain on productivity and cost efficiencies, while also making investments in technology. We are seeking to drive material improvements in profitability and to further build upon the strong financial foundation that we have recently attained.”

On June 11, 2024, the Company completed a 1-for-100 reverse stock split. Current outstanding shares total approximately 26.2 million.

(a)     For additional information, see the Notes in the Non-GAAP disclosure information of this Press Release.

(b)    The increase in interest expense is primarily due to higher borrowings, higher interest rates and increased amortization of deferred financing costs.

(c)    On June 10, 2024, subsequent to the end of Fiscal 2024, we completed various transactions, including an equity rights offering. Because the rights issuance was offered to all existing stockholders at an exercise price that was less than the fair value of our Common Stock, as of such time, the weighted average shares outstanding and basic and diluted earnings (loss) per share were adjusted retroactively to reflect the bonus element of the rights offering for all periods presented by a factor of 5.03.

On June 11, 2024, subsequent to the end of Fiscal 2024, we completed a reverse stock split of our outstanding shares of common stock at a ratio of 1-for-100 in which every 100 shares of common stock issued and outstanding was converted into one share of the our common stock.

The weighted average common shares and loss per common share reflect the bonus element resulting from the equity rights offering and the reverse stock split for all periods presented on the consolidated statements of operations.

(a)     Represents the percentage these costs bear to the related sales, instead of total sales.

(a)    The Credit Facility and Term Loan were scheduled to become due on December 28, 2024 and April 7, 2025, respectively. On June 10, 2024, subsequent to the end of Fiscal 2024, we completed various transactions, including amending and extending the maturity date of the Credit Facility to June 9, 2028 and converting all outstanding principal and interest amounts owed under our Term Loan Credit Agreement into shares of our Common Stock.

Non-GAAP Information (a)

(a)    For additional information, see "Use of Non-GAAP Financial Information" in the Non-GAAP disclosure information of this Press Release.

(b)     During the 52 weeks ended April 27, 2024, we evaluated certain of our store-level long-lived assets in the Retail segment for impairment. Based on the results of the impairment tests, we recognized an impairment loss (non-cash) of $7,166 (both pre-tax and after-tax) comprised of $405, $3,600, and $3,161 of property and equipment, operating lease right-of-use assets, and amortizable intangibles, respectively.

During the 52 weeks ended April 29, 2023, we evaluated certain of our store-level long-lived assets in the Retail segment for impairment. Based on the results of the impairment tests, we recognized an impairment loss (non-cash) of $6,008 (both pre-tax and after-tax) comprised of $708, $1,697, $3,599 and $4 of property and equipment, operating lease right-of-use assets, amortizable intangibles, and other noncurrent assets, respectively.

(c)    Represents amortization of content development costs (non-cash) recorded in cost of goods sold in the consolidated financial statements.

(d)    Restructuring and other charges are comprised primarily of professional service costs for restructuring and process improvements, including costs related to evaluating strategic alternatives, and severance and other employee termination and benefit costs associated with the elimination of various positions as part of cost reduction objectives.

(e)    There is no pro forma income effect of the non-GAAP items.

Barnes & Noble Education, Inc. (NYSE: BNED) is a leading solutions provider for the education industry, driving affordability, access and achievement at hundreds of academic institutions nationwide and ensuring millions of students are equipped for success in the classroom and beyond. Through its family of brands, BNED offers campus retail services and academic solutions, wholesale capabilities and more. BNED is a company serving all who work to elevate their lives through education, supporting students, faculty and institutions as they make tomorrow a better, more inclusive and smarter world. For more information, visit www.bned.com.

 

This press release contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and information relating to us and our business that are based on the beliefs of our management as well as assumptions made by and information currently available to our management. When used in this communication, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “will,” “forecasts,” “projections,” and similar expressions, as they relate to us or our management, identify forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment and new risks may emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Actual results could differ materially from those projected in the forward-looking statements, therefore we caution you not to place undue reliance on these forward-looking statements. Such statements reflect our current views with respect to future events, the outcome of which is subject to certain risks, including, but not limited to: the amount of our indebtedness and ability to comply with covenants contained in our credit agreement; our ability to maintain adequate liquidity levels to support ongoing inventory purchases and related vendor payments in a timely manner; slower than anticipated pace of adoption of our BNC First Day® equitable and inclusive access course material models; our dependency on strategic service provider relationships and the potential for adverse operational and financial changes to these strategic service provider relationships; non-renewal of our managed bookstore, physical and/or online store contracts; general competitive conditions; a decline in college enrollment or decreased funding available for students; technological changes, including the adoption of artificial intelligence technologies for educational content; disruptions to our information technology systems, infrastructure, data, supplier systems, and customer ordering and payment systems due to computer malware, viruses, hacking and phishing attacks; disruption of or interference with third party service providers and our own proprietary technology; impacts that public health crises may have on the overall demand for BNED products and services, our operations, the operations of our suppliers, service providers, and campus partners as well as the ability of our suppliers to manufacture or source products, particularly from outside of the United States; and changes in applicable domestic and international laws, rules or regulations or changes in enforcement practices, including, without limitation, the impact of recently proposed regulatory changes by the United States Department of Education, U.S. tax reform, or changes to consumer data privacy rights legislation, as well as related guidance.

For a more detailed discussion of these factors, and other factors that could cause actual results to vary materially, interested parties should review the risk factors listed in the Company’s Annual Report on Form 10-K for the year ended April 27, 2024 as filed with the U.S. Securities and Exchange Commission. Any forward-looking statements made by us in this press release speak only as of the date of this press release, and we do not intend to update these forward-looking statements after the date of this press release, except as required by law.