Barnes & Noble Education, Inc. (NYSE: BNED) (“BNED”
or the “Company”), a leading solutions provider for the education
industry, today announced certain preliminary, unaudited financial
results for the twelve months ended April 27, 2024.
Preliminary Unaudited Fiscal 2024 Full-Year Financial
Highlights
- Consolidated fiscal year 2024 GAAP revenue of approximately
$1,567 million, compared to $1,543 million in the prior year
period.
- Consolidated fiscal year 2024 GAAP net loss from continuing
operations of approximately $(63) million, compared to a net loss
of $(90) million in the prior year period.
- Consolidated fiscal year 2024 non-GAAP Adjusted EBITDA from
Continuing Operations of approximately $45 million, as compared to
$(8) million in the prior year period. The Company’s previously
issued fiscal year 2024 non-GAAP Adjusted EBITDA from Continuing
Operations guidance was $40 million.
The results reported in this press release are preliminary and
unaudited. The Company has not yet completed its annual financial
close process for the fiscal 2024 fourth quarter and full year, and
its independent auditors have not completed their audit of the
Company’s financial statements for the fiscal 2024 full year. This
update does not present all necessary information for an
understanding of the Company’s results of operations for the fiscal
2024 fourth quarter and full year. As the Company completes its
annual financial close process and finalizes its financial
statements for the fiscal 2024 fourth quarter and full year, and as
its independent auditors complete their audit of the Company’s
financial statements for the fiscal 2024 full year, it is possible
the Company may identify items that require adjustments to the
preliminary financial information set forth in this press release,
and those changes could be material. The Company does not intend to
update such financial information prior to the release of its final
fourth quarter and full year financial results and the filing of
its Form 10-K which is required to be filed on or before July 26,
2024.
Rights Offering and Other Actions The Company continues
to move forward on its previously announced proposed transactions
(the “Transactions”) that will enable the Company to substantially
deleverage its balance sheet, strategically invest in innovation
and operate from a position of strength. The Transactions remain
subject to shareholder approval and other closing conditions. Only
shareholders of record as of the close of business on the record
date of May 14, 2024 may participate in the equity rights offering
(the “Rights Offering”).
Upon closing of the Transactions, which is currently expected to
occur in June 2024:
- BNED will receive gross proceeds of $95 million of new equity
capital through a fully backstopped $45 million Rights Offering and
a $50 million new equity investment (the “Private Investment”) led
by Immersion Corporation (NASDAQ: IMMR) (“Immersion”); the
Transactions are expected to infuse approximately $75 million of
net cash proceeds after transaction costs;
- The Company’s existing second lien lenders will convert
approximately $34 million of outstanding principal and any accrued
and unpaid interest into BNED Common Stock; and
- The Company has received commitments to refinance its existing
asset backed loan facility, pursuant to an agreement with its first
lien holders, providing the Company with access to a $325 million
facility (the “ABL Facility”) maturing in 2028. The refinanced ABL
Facility will meaningfully enhance BNED’s financial flexibility and
reduce its annual interest expense.
Through the Rights Offering, BNED will issue 900,000,000 shares
of its common stock, par value $0.01 per share (the “Common Stock”)
at a cash subscription price (the “Subscription Price”) of $0.05
per share. In the Rights Offering, BNED will distribute to each
holder of record of its Common Stock on May 14, 2024 (the “Record
Date”) one non-transferable subscription right (each, a
“Subscription Right”) for every share of Common Stock owned by such
holder on the Record Date, and each Subscription Right will entitle
the holder to purchase 17 shares of Common Stock. Each holder that
fully exercises their Subscription Rights will be entitled to
Over-Subscription Rights to subscribe for additional shares of
Common Stock that remain unsubscribed as a result of any
unexercised Subscription Rights, which allows such holder to
subscribe for additional shares of Common Stock up to the number of
shares purchased under such holder’s basic Subscription Right at
$0.05 per share.
If any Subscription Rights remain unexercised upon the
expiration of the Rights Offering after accounting for all
Over-Subscription Rights exercised, the standby purchasers led by
Immersion, Outerbridge Capital Management, LLC and Selz Family 2011
Trust will collectively purchase, at the Subscription Price, up to
$45 million in shares of Common Stock not subscribed for by the
Company’s stockholders.
The Company will not issue fractional shares in the Rights
Offering or cash in lieu of fractional shares of Common Stock. Any
fractional shares of Common Stock that would be created by an
exercise of the Subscription Rights will be rounded to the nearest
whole share.
The Company expects that the proceeds of the offering will be
used to pay expenses in connection with the Transactions and reduce
the balance under the Company’s existing ABL Facility.
The shares of Common Stock to be issued upon exercise of the
Subscription Rights will be listed for trading on the New York
Stock Exchange (“NYSE”) under the symbol “BNED.” The Subscription
Rights are non-transferable and the Company will not be listing the
Subscription Rights on the NYSE or any other national securities
exchange.
Neither the Company nor its Board of Directors has made or will
make any recommendation to holders regarding the exercise of
Subscription Rights. Holders should make an independent investment
decision about whether or not to exercise their Subscription Rights
based on their own assessment of the Company’s business, the Rights
Offering and the other Transactions.
Questions about the Rights Offering or requests for a copy of
the prospectus related to the Rights Offering may be directed to
the Information Agent, Innisfree M&A Incorporated, at (877)
800-5185. (Banks & Brokers may call collect: (212)
750-5833.
Other Important Information The issuance and sale of
shares of Common Stock pursuant to the Rights Offering is subject
to, among other things, the approval of our stockholders at a
special meeting (the “Special Meeting”) to be held on June 5, 2024.
If the issuance and sale of our Common Stock pursuant to the Rights
Offering is not approved at the Special Meeting, then the Rights
Offering will be cancelled. The Rights Offering is being made
pursuant to the Company’s registration statement on Form S-1 (File
No. 333-278799), which was declared effective on May 14, 2024. The
Company reserves the right to cancel or terminate the Rights
Offering at any time. This press release does not constitute an
offer to sell or the solicitation of an offer to buy any
Subscription Rights or any other securities to be issued in the
Rights Offering or any related transactions, nor shall there be any
offer, solicitation or sale of Subscription Rights or any other
securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful.
Consolidated Adjusted EBITDA (non-GAAP) From Continuing
Operations (a) (b)
Dollars in millions
52 weeks ended
April 27, 2024
April 29, 2023
Net loss from continuing operations
$
(63.0
)
$
(90.1
)
Add: Depreciation and amortization expense
40.0
42.2
Interest expense, net
40.4
22.7
Income tax expense
1.0
1.0
Impairment loss (non-cash)
7.2
6.0
Restructuring and other charges
19.4
10.1
Adjusted EBITDA (Non-GAAP) - Continuing Operations
$
45.0
$
(8.1
)
(a)
For additional information, see "Use of
Non-GAAP Financial Information" in the Non-GAAP disclosure
information of this Press Release.
(b)
Results are preliminary and unaudited. As
the Company completes its annual financial close process and
finalizes its financial statements for the fiscal 2024 fourth
quarter and full year, and as its independent auditors complete
their audit of the Company’s financial statements for the fiscal
2024 full year, it is possible the Company may identify items that
require adjustments to the preliminary financial information
presented. Changes could be material. The Company’s Form 10-K is
required to be filed on or before July 26, 2024.
Use of Non-GAAP Financial Information - Adjusted
EBITDA
To supplement the Company’s preliminary financial results
presented in accordance with generally accepted accounting
principles (“GAAP”), the Company uses the financial measure of
Adjusted EBITDA, which is a non-GAAP financial measure under
Securities and Exchange Commission (the "SEC") regulations. We
define Adjusted EBITDA as net income (loss) from continuing
operations plus (1) depreciation and amortization; (2) interest
expense and (3) income taxes, (4) as adjusted for items that are
subtracted from or added to net income (loss) from continuing
operations.
The non-GAAP measure included in this Press Release has been
reconciled to the most comparable financial measure presented in
accordance with GAAP, as follows: the reconciliation of
consolidated Adjusted EBITDA to consolidated net income (loss) from
continuing operations. All of the items included in the
reconciliation are either (i) non-cash items or (ii) items that
management does not consider in assessing our on-going operating
performance.
This non-GAAP financial measure is not intended as a substitute
for and should not be considered superior to measures of financial
performance prepared in accordance with GAAP. In addition, the
Company's use of this non-GAAP financial measure may be different
from similarly named measures used by other companies, limiting
their usefulness for comparison purposes.
We review this non-GAAP financial measure as an internal measure
to evaluate our performance at a consolidated level and manage our
operations. We believe that this measure is a useful performance
measure which is used by us to facilitate a comparison of our
on-going operating performance on a consistent basis from
period-to-period. We believe that this non-GAAP financial measure
provides for a more complete understanding of factors and trends
affecting our business than measures under GAAP can provide alone,
as they exclude certain items that management believes do not
reflect the ordinary performance of our operations in a particular
period. Our Board of Directors and management also use Adjusted
EBITDA, at a consolidated level and at a segment level, as one of
the primary methods for planning and forecasting expected
performance, for evaluating on a quarterly and annual basis actual
results against such expectations, and as a measure for performance
incentive plans. We believe that the inclusion of Adjusted EBITDA
results provides investors useful and important information
regarding our operating results, in a manner that is consistent
with management’s evaluation of business performance.
About Barnes & Noble Education, Inc.
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.
Forward-Looking Statements
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. New
risks 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. In light of these risks, uncertainties and
assumptions, the future events and trends discussed in this press
release may not occur and actual results could differ materially
and adversely from those anticipated or implied in the
forward-looking statements. Such statements reflect our current
views with respect to future events, the outcome of which is
subject to certain risks, including, among others: our preliminary
unaudited Fiscal 2024 full-year financial results; the completion,
timing, size and use of proceeds of the Transactions; the approval
by our stockholders of the Transactions at the Special Meeting; the
amount of our indebtedness and ability to comply with covenants
applicable to current and/or any future debt financing; our ability
to satisfy future capital and liquidity requirements; our ability
to continue as a going concern; our ability to access the credit
and capital markets at the times and in the amounts needed and on
acceptable terms; our ability to maintain adequate liquidity levels
to support ongoing inventory purchases and related vendor payments
in a timely manner; our ability to attract and retain employees;
the pace of equitable and inclusive access adoption in the
marketplace is slower than anticipated and our ability to
successfully convert the majority of our institutions to our BNC
First Day® equitable and inclusive access course material models or
successfully compete with third parties that provide similar
equitable and inclusive access solutions; the United States
Department of Education has recently proposed regulatory changes
that, if adopted as proposed, could impact equitable and inclusive
access models across the higher education industry; the strategic
objectives, successful integration, anticipated synergies, and/or
other expected potential benefits of various strategic and
restructuring initiative, may not be fully realized or may take
longer than expected; dependency on strategic service provider
relationships, such as with VitalSource Technologies, Inc. and the
Fanatics Retail Group Fulfillment, LLC (“Fanatics”) and Fanatics
Lids College, Inc. D/B/A "Lids" (“Lids”), and the potential for
adverse operational and financial changes to these strategic
service provider relationships, may adversely impact our business;
non-renewal of managed bookstore, physical and/or online store
contracts and higher-than-anticipated store closings; decisions by
K-12 schools, colleges and universities to outsource their physical
and/or online bookstore operations or change the operation of their
bookstores; general competitive conditions, including actions our
competitors and content providers may take to grow their
businesses; the risk of changes in price or in formats of course
materials by publishers, which could negatively impact revenues and
margin; changes to purchase or rental terms, payment terms, return
policies, the discount or margin on products or other terms with
our suppliers; product shortages, including decreases in the used
textbook inventory supply associated with the implementation of
publishers’ digital offerings and direct to student textbook
consignment rental programs; work stoppages or increases in labor
costs; possible increases in shipping rates or interruptions in
shipping services; a decline in college enrollment or decreased
funding available for students; decreased consumer demand for our
products, low growth or declining sales; the general economic
environment and consumer spending patterns; trends and challenges
to our business and in the locations in which we have stores; risks
associated with operation or performance of MBS Textbook Exchange,
LLC’s point-of-sales systems that are sold to college bookstore
customers; technological changes, including the adoption of
artificial intelligence technologies for educational content; risks
associated with counterfeit and piracy of digital and print
materials; risks associated with the potential loss of control over
personal information; risks associated with the potential
misappropriation of our intellectual property; 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, resulting in harm
to our business and results of operations; disruption of or
interference with third party service providers and our own
proprietary technology; risks associated with the impact that
public health crises, epidemics, and pandemics, such as the
COVID-19 pandemic, have on the overall demand for BNED products and
services, our operations, the operations of our suppliers, service
providers, and campus partners, and the effectiveness of our
response to these risks; lingering impacts that public health
crises may have on the ability of our suppliers to manufacture or
source products, particularly from outside of the United States;
changes in applicable domestic and international laws, rules or
regulations, including, without limitation, U.S. tax reform,
changes in tax rates, laws and regulations, as well as related
guidance; changes in and enactment of applicable laws, rules or
regulations or changes in enforcement practices including, without
limitation, with regard to consumer data privacy rights, which may
restrict or prohibit our use of consumer personal information for
texts, emails, interest based online advertising, or similar
marketing and sales activities; adverse results from litigation,
governmental investigations, tax-related proceedings, or audits;
changes in accounting standards; and the other risks and
uncertainties detailed in the section titled “Risk Factors” in Part
I - Item 1A in our Annual Report on Form 10-K for the fiscal year
ended April 29, 2023 and in Part II – Item 1A in our Quarterly
Reports on Form 10-Q. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove
incorrect, actual results or outcomes may vary materially from
those described as anticipated, believed, estimated, expected,
intended or planned. Subsequent written and oral forward-looking
statements attributable to us or persons acting on our behalf are
expressly qualified in their entirety by the cautionary statements
in this paragraph. We undertake no obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise after the date of this
press release.
Additional Information Regarding the Special Meeting and
Where to Find It
The Company has filed a proxy statement and proxy card with the
SEC in connection with its solicitation of proxies for the Special
Meeting. THE COMPANY’S STOCKHOLDERS ARE STRONGLY ENCOURAGED TO READ
THE DEFINITIVE PROXY STATEMENT (AND ANY AMENDMENTS AND SUPPLEMENTS
THERETO) AND ACCOMPANYING PROXY CARD AS THEY CONTAIN IMPORTANT
INFORMATION. Stockholders may obtain the proxy statement, any
amendments or supplements to the proxy statement and other
documents as and when filed by the Company with the SEC without
charge from the SEC’s website at www.sec.gov.
Certain Information Regarding Participants
The Company, its directors and certain of its executive officers
and employees may be deemed participants in connection with the
solicitation of proxies from the Company’s stockholders in
connection with the matters to be considered at the Special
Meeting. Information regarding the direct and indirect interests,
by security holdings or otherwise, of the Company’s directors and
executive officers in the Company is included in the Company’s
definitive Proxy Statement on Schedule 14A for the Special Meeting
under the heading “Security Ownership of Certain Beneficial Owners
and Management” filed with the SEC on May 15, 2024.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240523398847/en/
BNED Contact – Media and Investors Hunter Blankenbaker Vice
President – Corporate Communications and Investor Relations (908)
991-2776 hblankenbaker@bned.com
Barnes and Noble Education (NYSE:BNED)
Historical Stock Chart
From May 2024 to Jun 2024
Barnes and Noble Education (NYSE:BNED)
Historical Stock Chart
From Jun 2023 to Jun 2024