false000163411700016341172023-09-062023-09-06
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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): September 6, 2023
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| BARNES & NOBLE EDUCATION, INC. |
| (Exact name of registrant as specified in its charter) |
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| Delaware | | 1-37499 | | 46-0599018 |
| (State or other jurisdiction of incorporation) | | (Commission File Number) | | (IRS Employer Identification No.) |
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120 Mountainview Blvd., Basking Ridge, NJ 07920 |
| (Address of principal executive offices)(Zip Code) |
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| Registrant’s telephone number, including area code: | | (908) 991-2665 |
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| Not Applicable |
| (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:
□ 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))
Securities registered pursuant to Section 12(b) of the Act:
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| Title of Class | | Trading Symbol | | Name of Exchange on which registered |
| Common Stock, $0.01 par value per share | | BNED | | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company □
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. □
Item 2.02 Results of Operations and Financial Condition.
On September 6, 2023, Barnes & Noble Education, Inc. (the “Company”) issued a press release announcing its financial results for the first quarter ended July 29, 2023 (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 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 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
On September 6, 2023, the Company announced the appointment of Kevin Watson as the Company’s Executive Vice President, Chief Financial Officer (“CFO”) effective as of September 7, 2023.
Mr. Watson, 57, has served, most recently, as the Executive Vice President, Chief Financial Officer and member of the board of directors of Paraco Gas Corporation (“Paraco”), one of the largest privately owned propane companies in the Northeast, from 2018 to 2023 with responsibility for the company’s finance and systems organizations. Prior to Paraco, Mr. Watson served as the Executive Vice President, Chief Financial Officer of Ironwood Strategic Advisors (“Ironwood”), a US-based professional consultancy firm, from 2016 to 2018 where he directed the development of tailored funding strategies for clients, and the development of business prospects, partnerships and capital structure objectives for the company. Prior to Ironwood, Mr. Watson served as the Senior Vice President and Corporate Treasurer and Chairman of the Investment and Benefits Committee of Cablevision Systems Corporation, a former large US-based cable television company, from 2006 to 2016 where he governed treasury operations, debt investor and credit rating agencies relationships, interest rate risk management, budgeting and forecasting, and strategic planning.
In connection with Mr. Watson’s hiring, the Company and Mr. Watson entered into an offer letter (the “Offer Letter”) that provides for (i) an annual base salary of $540,000, (ii) a $5,000 sign on bonus and (iii) eligibility to earn an annual bonus under the Company’s fiscal year 2024 Incentive Compensation Plan (“ICP”) with a target payout of 85% of his annual base salary. For fiscal year 2024, Mr. Watson’s bonus opportunity under the ICP will be guaranteed and prorated based on his time employed during the applicable fiscal year. Mr. Watson will also be eligible to participate in the Company’s next stock grant, at levels commensurate with other similarly situated Company executives.
Mr. Watson will be entitled to receive severance benefits in the event his employment is terminated by the Company without cause or if he resigns for good reason (including if such employment cessations arise out of a Change of Control (as defined in the Offer Letter)), provided that he remains in compliance with the terms of the Offer Letter and the agreements entered into in connection therewith, and subject to applicable parachute payments laws. In the event of such termination or resignation within the first eight months of his employment, Mr. Watson will receive an amount equal to his then annual base salary, less all applicable withholding and other applicable taxes and deductions. In the event of such termination or resignation after the first eight months of his employment with the Company, Mr. Watson will receive an amount equal to his then annual base salary and target bonus amount, less all applicable withholding and other applicable taxes and deductions.
There are no reportable family relationships involving the Company and Mr. Watson. Mr. Watson is not a party to any transaction that would require disclosure under Item 404(a) of Regulation S-K.
Item 9.01. Financial Statements and Exhibits
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| Exhibit No. | | Description |
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| 104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
Signatures
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 thereunto duly authorized.
Date: September 6, 2023
BARNES & NOBLE EDUCATION, INC.
By: /s/ Michael P. Huseby
Name: Michael P. Huseby
Title: Chief Executive Officer &
Principal Financial Officer
BARNES & NOBLE EDUCATION, INC.
EXHIBIT INDEX
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| Exhibit No. | | Description |
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| 104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
Barnes & Noble Education Names Kevin F. Watson as Executive Vice President
and Chief Financial Officer
BASKING RIDGE, N.J.-- Barnes & Noble Education, Inc. (NYSE: BNED), a leading solutions provider for the education industry, today announced that Kevin F. Watson has been named Chief Financial Officer, effective September 7, 2023. Mr. Watson will report directly to Michael P. Huseby, Chief Executive Officer, BNED.
Mr. Watson is a seasoned executive with more than 20 years of global finance, accounting, capital markets, business transformation and transactional experience across diverse industries. As CFO at Barnes & Noble Education, Mr. Watson will be responsible for the financial management of the Company, including leading the Accounting, Treasury, Tax, Financial Planning, Financial Operations, Internal Audit and Investor Relations teams.
“We are pleased to welcome Kevin to Barnes & Noble Education as our new Chief Financial Officer,” said Michael P. Huseby, Chief Executive Officer, BNED. “Kevin's unique combination of financial, operational, and capital markets expertise is a strong complement to the existing executive leadership team at this important time in our transformation. Kevin has a track record of delivering results and transforming companies to drive value creation and will be a tremendous asset to our company.”
Prior to joining BNED, Mr. Watson served as Executive Vice President and Chief Financial Officer for Paraco Gas Corporation, one of the largest privately-held energy distributors and service providers in the United States. There, he oversaw finance, accounting, tax, internal audit, human resources, information technology, supply chain, business intelligence, risk management and mergers & acquisitions. While at Paraco, Mr. Watson spearheaded strategic and transformative initiatives to pursue growth objectives, increase efficiencies and strengthen the company’s market share.
Before joining Paraco Gas in 2018, Mr. Watson successfully led select financing transactions such as a company leveraged buyout by a private-equity consortium, IPOs, spin-offs, mergers and acquisitions and private and public debt financings on senior executive teams at Cablevision Systems Corporation, PanAmSat Corporation, and Entex IT Service. In addition, Mr. Watson held a variety of finance roles at MCI Telecommunications and Prudential Securities, Inc.
“I am thrilled to join Barnes & Noble Education at an exciting time in the Company’s transformation. I look forward to working with the leadership team and the Board as we continue to execute on our strategic priorities by focusing on achieving sustained growth and profitability and consistent execution, which we expect to deliver significant long-term value for shareholders,” said Mr. Watson.
Mr. Watson holds a Bachelors of Business Administration in Finance from Iona University.
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. 
Media:
Hunter Blankenbaker
Vice President
Corporate Communications and Investor Relations
Barnes & Noble Education, Inc.
(908) 991-2776
hblankenbaker@bned.com
Source: Barnes & Noble Education, Inc.
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: 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 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 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 strategic objectives, successful integration, anticipated synergies, and/or other expected potential benefits of various strategic and restructuring initiatives, may not be fully realized or may take longer than expected; dependency on strategic partnerships, such as with VitalSource Technologies, Inc. and the Fanatics Retail Group Fulfillment, LLC, Inc. (“Fanatics”) and Fanatics Lids College, Inc. D/B/A "Lids" (“Lids”) (collectively referred to herein as the “F/L Partnership”), and the potential for adverse operational and financial changes to these partnerships, may adversely impact our business; non-renewal of managed bookstore, physical and/or online store contracts and higher-than-anticipated store closings; decisions by 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 data privacy, information security and 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 web 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 and other business 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 domestic and international laws or regulations, including U.S. tax reform, changes in tax rates, laws and regulations, as well as related guidance; enactment of laws or changes in enforcement practices which may restrict or prohibit our use of 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 Form 10-K for the year-ended April 29, 2023. 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.
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August 28, 2023
Kevin Watson
[_______________]
[_______________]
Dear Kevin,
It is my pleasure to confirm our offer of employment with B&N Education, LLC, a subsidiary of Barnes & Noble Education, Inc. (collectively, “BNED” or “Company”). The following represents the key elements of our offer:
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| Job Title: | EVP, Chief Financial Officer |
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| Department and Location: | BNED Finance Executive – Garden City, NY (Hybrid) |
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| Reports to: | Michael Huseby, CEO |
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| Starting Date: | September 7, 2023 |
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| Base Salary: | $540,000 annualized ($20,769.24 bi-weekly) |
| | Payment is subject to standard payroll deductions and withholdings. Your position is considered an exempt position, which means that you will not be eligible for overtime pay for hours worked in excess of 40 hours in a given week. |
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| Annual Incentive Plan: | You are eligible to participate in our FY24 Incentive Compensation Plan. The bonus target for your position is 85% of your base salary, with the first year guaranteed pro-rata. Payments under this plan are based upon achievement of measurable objectives as defined by the Company each fiscal year. |
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| Equity: | You will be eligible to participate in the next Company stock grant, at levels commensurate with other similarly situated executives. |
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| Sign-On Bonus: | You will be granted a $5,000 sign-on bonus, which will be included in your first payroll period and is subject to standard deductions and withholdings, and in line with the Company's regular pay practices. Should you voluntarily leave the Company within twelve months of your start date, you agree to repay the full amount of the sign-on bonus, less payroll taxes, within 30 days of your termination date. |
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| Cell Phone Stipend: | You are eligible to receive $100 per month for cell phone reimbursement. This will be paid in the first pay period of each month. |
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| Benefits: | You will be eligible to enroll in the Company's Benefits Plans. Coverage begins after sixty (60) days of continuous employment. Enrollment information will be provided to you by the Benefits department (benefits@bned.com). |
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| 401(k) Savings Plan: | Upon completing 1000 hours of service in a year (i.e., after approximately 6 months of continuous full-time employment), you will become eligible to participate in our 401(k) savings plan. The Company offers an annual discretionary match. You will receive enrollment information from Fidelity Investments in the mail once eligible to join. |
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| Paid Time Off: | You are eligible for twenty (20) vacation days per year. The Company vacation policy follows a calendar year accrual process and employees accrue and earn vacation time with every pay cycle. In addition, you are eligible for an annual grant of four (4) flex days per calendar year, prorated to two (2) days for 2023 based on your hire date. |
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Barnes & Noble Education
120 Mountain View Boulevard
Basking Ridge, New Jersey 07920
(908) 991-2665
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| Severance Benefits: | In the event (i) (a) your employment is terminated by the Company without Cause during the first eight (8) months of your employment with the Company or (b) you voluntarily terminate your employment for Good Reason during the first eight (8) months of your employment with the Company, the Company shall pay you an amount equal to your then annual base salary, less all applicable withholding and other applicable taxes and deductions (“Severance Amount”) or (ii) (a) your employment is terminated by the Company without Cause after the first eight (8) months of your employment with the Company or (b) you voluntarily terminate your employment for Good Reason after the first eight (8) months of your employment with the Company, the Company shall pay you an amount equal to your then annual base salary and target bonus amount, less all applicable withholding and other applicable taxes and deductions (also the “Severance Amount”); provided that (c) you execute and deliver to the Company, and do not revoke, a release of all claims against the Company substantially in the form attached hereto as Exhibit A (“Release”) and (d) you have not materially breached as of the date of such termination any provisions of this letter or the attached Agreement Regarding Certain Terms and Conditions of Employment (the “Agreement”) and do not materially breach such provisions at any time during the Relevant Period (as defined in the Agreement). The Company’s obligation to make such payment shall be cancelled upon the occurrence of any such material breach and, in the event such payment has already been made, you shall repay to the Company such payment within 30 days after demand therefor; provided, however, such repayment shall not be required if the Company shall have materially breached this offer letter or the attached Agreement prior to the time of your breach. The Severance Amount shall be paid in cash in a single lump sum on the later of (1) the first day of the month following the month in which such termination occurs and (2) the date the Revocation Period (as defined in the Release) has expired. Notwithstanding anything in this paragraph to the contrary, if a Release is not executed and delivered to the Company within 60 days of such termination of employment (or if such Release is revoked in accordance with its terms), the Severance Amount shall not be paid. |
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Barnes & Noble Education
120 Mountain View Boulevard
Basking Ridge, New Jersey 07920
(908) 991-2665
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| Change In Control: | If at any time during your employment (i) there is a Change of Control (as defined below) and (ii) your employment is terminated by the Company without Cause or you voluntarily terminate your employment for Good Reason, in either case, within the first eight (8) months of your employment with Company, then the Company shall (iii) pay you an amount equal to your then annual base salary, less all applicable withholding and other applicable taxes and deductions. If at any time during your employment (iv) there is a Change of Control (as defined below) and (v) your employment is terminated by the Company without Cause or you voluntarily terminate your employment for Good Reason, in either case, after the first eight (8) months of your employment with Company, then the Company shall (vi) pay you an amount equal to your then annual base salary and target bonus amount, less all applicable withholding and other applicable taxes and deductions. (A) The Change of Control Amount are subject to your executing and delivering to the Company (and not revoking) the Release within 60 days following your termination date, (B) the Change of Control Amount shall be paid to you in cash in a single lump sum within 30 days after the date your employment terminates (or, if later, when the Release becomes irrevocable). In the event that it is determined that the aggregate amount of the payments and benefits that could be considered “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (collectively, with the regulations and other guidance promulgated thereunder, the “Code”; and such payments and benefits, the “Parachute Payments”) that, but for this paragraph would be payable to you under this Agreement or any other plan, policy, or arrangement of the Company or Barnes & Noble Education, Inc. or any affiliate, exceeds the greatest amount of Parachute Payments that could be paid to you without giving rise to any liability for any excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the aggregate amount of Parachute Payments payable to you shall not exceed the amount that produces the greatest after-tax benefit to you after taking into account any Excise Tax to be payable by you. Any reduction in Parachute Payments pursuant to the immediately preceding sentence shall be made in the following order: (1) cash payments that do not constitute deferred compensation within the meaning of Section 409A of the Code, (2) welfare or in-kind benefits, (3) equity compensation awards and (4) cash payments that do constitute deferred compensation; in each case, such reductions shall be made in the manner that maximizes the present value to you of all such payments. For the avoidance of doubt, the amounts payable to you under this paragraph shall be in lieu of any amounts payable to you under the previous paragraph. |
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Barnes & Noble Education
120 Mountain View Boulevard
Basking Ridge, New Jersey 07920
(908) 991-2665
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| As used herein, “Change of Control” shall mean the occurrence of one or more of the following events: (i) during any period of 24 consecutive months, individuals who were Directors of the Company on the first day of such period (the “Incumbent Directors”) cease for any reason to constitute a majority of the Board; provided, however, that any individual becoming a Director of the Company subsequent to the first day of such period whose election, or nomination for election, by the Company’s stockholders was approved by a vote of at least a majority of the Incumbent Directors shall be considered as though such individual were an Incumbent Director; (ii) the consummation of (A) a merger, consolidation, statutory share exchange or similar form of corporate transaction involving (x) the Company or (y) any of its Subsidiaries, but in the case of this clause (y) only if Company Voting Securities (as defined below) are issued or issuable (each of the events referred to in this clause (A) being hereinafter referred to as a “Reorganization”) or (B) the sale or other disposition of all or substantially all the assets of the Company to an entity that is not an affiliate (a “Sale”), in each case, if such Reorganization or Sale requires the approval of the Company’s stockholders under the law of the Company’s jurisdiction of organization (whether such approval is required for such Reorganization or Sale or for the issuance of securities of the Company in such Reorganization or Sale), unless, immediately following such Reorganization or Sale, (1) all or substantially all the individuals and entities who were the “beneficial owners” (as such term is defined in Rule 13d-3 under the Securities Exchange Act of 1934 (or a successor rule thereto)) (the “Exchange Act”) of the securities eligible to vote for the election of the Board (“Company Voting Securities”) outstanding immediately prior to the consummation of such Reorganization or Sale beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities of the corporation resulting from such Reorganization or Sale (including a corporation that, as a result of such transaction, owns the Company or all or substantially all the Company’s assets either directly or through one or more subsidiaries) (the “Continuing Corporation”) in substantially the same proportions as their ownership, immediately prior to the consummation of such Reorganization or Sale, of the outstanding Company Voting Securities (excluding any outstanding voting securities of the Continuing Corporation that such beneficial owners hold immediately following the consummation of the Reorganization or Sale as a result of their ownership prior to such consummation of voting securities of any company or other entity involved in or forming part of such Reorganization or Sale other than the Company), (2) no “person” (as such term is used in Section 13(d) of the Exchange Act) (each, a “Person”) (excluding (x) any employee benefit plan (or related trust) sponsored or maintained by the Continuing Corporation or any corporation controlled by the Continuing Corporation or (y) Leonard Riggio, his spouse, his lineal descendants, trusts for the exclusive benefit of any such individuals, the executor or administrator of the estate or the legal representative of any of such individuals and any entity controlled by any of the foregoing Persons (the “Riggio Shareholders”) beneficially owns, directly or indirectly, 40% or more of the combined voting power of the then outstanding voting securities of the Continuing Corporation and (3) at least a majority of the members of the board of directors of the Continuing Corporation were Incumbent Directors at the time of the execution of the definitive agreement providing for such Reorganization or Sale or, in the absence of such an agreement, at the time at which approval of the Board was obtained for such Reorganization or Sale; or (iii) any person, corporation or other entity or “group” (as used in Section 14(d)(2) of the Exchange Act) (other than (A) the Company, (B) any trustee or other fiduciary holding securities under an employee benefit plan of the Company or an affiliate, (C) any entity owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of the voting power of the Company Voting Securities or (D) the Riggio Shareholders) becomes the beneficial owner, directly or indirectly, of securities of the Company representing 40% or more of the combined voting power of the Company Voting Securities; provided, however, that for purposes of this subparagraph (iii), the following acquisitions shall not constitute a Change of Control: (w) any acquisition directly from the Company, (x) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or an affiliate, (y) any acquisition by an underwriter temporarily holding such Company Voting Securities pursuant to an offering of such securities or any acquisition by a pledgee of Company Voting Securities holding such securities as collateral or temporarily holding such securities upon foreclosure of the underlying obligation or (z) any acquisition pursuant to a Reorganization or Sale that does not constitute a Change of Control for purposes of subparagraph (ii) above. |
Barnes & Noble Education
120 Mountain View Boulevard
Basking Ridge, New Jersey 07920
(908) 991-2665
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| For purposes of this letter, "Cause" means (A) your engaging in intentional misconduct or gross negligence that, in either case, is injurious to Company; (B) your indictment, entry of a plea of nolo contendere, or conviction by a court of competent jurisdiction with respect to any felony or other crime or violation of law involving fraud or dishonesty (with the exception of misconduct based in good faith on the advice of professional consultants, such as attorneys and accountants) or any felony (or equivalent crime in a non-U.S. jurisdiction); (C) any grossly negligent intentional acts or intentional omissions by you in the performance of your duties; (D) fraud, dishonesty, embezzlement, or misappropriation in connection with the performance of the your employment duties and responsibilities; (E) your engaging in any act of intentional misconduct or moral turpitude reasonably likely to adversely affect the Company or its business; (F) your abuse of or dependency on alcohol or drugs (illicit or otherwise) that adversely affects your job performance; (G) your willful failure or refusal to properly perform the duties, responsibilities, or obligations of your employment for reasons other than a Disability as defined below, or authorized leave, or to properly perform or follow any lawful direction by the Company (with the exception of a willful failure or refusal to properly perform based in good faith on the advice of professional consultants, such as attorneys and accountants); or (H) your material breach of this offer letter, the Agreement or of any other contractual duty to, written policy of, or written agreement with the Company (with the exception of a material breach based in good faith on the advice of professional consultants, such as attorneys and accountants); provided that, with respect to clauses (C), (G) and (H), you have failed to cure such circumstances within 10 days following written notice from the Company. |
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| For purposes of this letter, "Good Reason" shall mean the occurrence of one or more of the following events without your written consent: (A) a material diminution of your duties; (B) a material diminution in the authority, duties or responsibilities of the supervisor to whom you are required to report; (C) a reduction in the annual base salary you receive from the Company or a reduction in your target annual bonus, (D) a reduction in your title; (E) a required relocation of your principal place of employment by more than 50 miles or (F) during the two-year period following a Change of Control, a material reduction in the value of the employee benefits provided to you. Notwithstanding the foregoing, you will have grounds to resign for Good Reason only if (I) you notify the Company in writing of the grounds therefor within 60 days following their occurrence, (B) the Company does not cure such grounds within 30 days following the receipt of such notice, and (C) you actually resign your employment within 30 days following the end of such cure period. |
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| For purposes of this letter, the term “Disability” shall mean a written determination by a majority of three physicians (one of which shall be your most recent primary care provider) mutually agreeable to the Company and you (or, in the event of your total physical or mental disability, your legal representative) that you are physically or mentally unable to perform your duties under this letter and that such disability can reasonably be expected to continue for a period of six (6) consecutive months or for shorter period aggregating 180 days in any 12 month period. |
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| For the avoidance of doubt, it is understood that your inability to remain employed by the Company due to a restrictive covenant relating to a former employer shall not constitute a termination by the Company without Cause or a termination by you for Good Reason. |
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You have represented, and hereby confirm, you are not subject to any currently effective employment contract or any other contractual or other binding obligations pursuant to which your employment or employment activities with or on behalf of the Company may be subject to any restrictions, including without limitation, any agreements or other obligations or documents relating to non-competition, confidentiality, trade secrets, proprietary information or works for hire.
Company is an at-will employer. That means, notwithstanding any statement in this letter, either you or the Company may end the employment relationship at any time and for any reason, with or without notice or cause.
Barnes & Noble Education
120 Mountain View Boulevard
Basking Ridge, New Jersey 07920
(908) 991-2665
This offer of employment is contingent upon successful completion of a background check that satisfies criteria of employment at Barnes & Noble Education. In addition, per federal immigration law, you will be asked to provide documents that demonstrate your identity and eligibility for employment in the United States. This offer of employment is contingent upon such satisfactory proof.
To confirm your acceptance of this offer of employment, kindly proceed with the electronic signature process. If this offer is not signed, the Company’s offer of employment shall be deemed to be rescinded and without effect. Should you have any queries or require further clarification, please feel free to reach out to me directly.
We are eagerly anticipating your addition to our family of brands and are confident that your time here will be both fulfilling and enriching. Congratulations!
Sincerely,
Maureen Paradine
Maureen Paradine
SVP, Chief Human Resources Officer
Barnes & Noble Education, Inc
Agreed and Accepted:
Kevin Watson
Signature: /s/ Kevin Watson Date: 08/28/2023
Barnes & Noble Education
120 Mountain View Boulevard
Basking Ridge, New Jersey 07920
(908) 991-2665
Exhibit A
GENERAL RELEASE AND WAIVER
1. Kevin Watson (“Employee” or “Releasor”) hereby acknowledges and agrees Employee’s employment with B&N Education, LLC, a subsidiary of Barnes & Noble Education, Inc. (collectively, “BNED” or “Company”) on __________, 20__ (the “Termination Date”).
2. Employee acknowledges and agrees that Employee’s executing this General Release and Waiver (“Release” or “Agreement”) is a condition precedent to the Company’s obligation to pay (and the Employee’s right to retain) the Severance Amount as defined in the offer letter dated as of August 24, 2023 including the attached Agreement, between Employee and the Company (such offer letter and agreement referred to collectively herein as the “Employment Agreement” and such payments and benefits collectively referred to herein as the “Separation Benefit”, as further described in this Section 2), that the Separation Benefit is adequate consideration for this Release, and that any monetary or other benefits that, prior to the execution of this Release, Employee may have earned or accrued, or to which Employee may have been entitled, have been paid or will be paid, or such payments or benefits have been released, waived or settled by Releasor (as defined below) except as expressly provided in this Release. Employee also acknowledges that, prior to or contemporaneous with Employee’s execution of this Release, Employee received all wages and other payments, including accrued vacation pay and bonuses if any, that were earned by and owed to Employee from the Company or any Releasee. Employee understands that Employee will receive all payment for wages owed to Employee upon termination regardless of whether Employee signs this Release.
In consideration for signing this Agreement, and complying with its terms, Employee agrees that, after Employee’s delivery to the Company of this fully executed Release as set forth below and the expiration of the Revocation Period (defined below), Employee shall accept from the Company, and on behalf of the Company and each Releasee (as defined below), the Separation Benefit in the gross amount of ___________ in accordance with the Company’s normal pay practices, less lawful deductions and withholdings. Employee and the Company understand and agree the Separation Benefit shall be regarded as “wages” from the Company for purposes of reporting and withholding the appropriate federal, state, and local income and employment taxes. In the event it is subsequently determined that any federal, state, or local taxes are owed with respect to the Separation Benefit or any portion thereof, Employee expressly acknowledges and agrees Employee and/or the Releasors, and not Company or the Releasees, will be responsible for the payment of any such taxes, liabilities, payments, costs, interest, and penalties. Except such taxes for which an employer is solely liable, Employee agrees to indemnify and hold harmless Company and the Releasees to the full extent of any such taxes, liabilities, payments, costs, interest, and penalties that may be assessed against the Company or the Releasees in connection with the Separation Benefit. Employee further acknowledges and agrees the Company has not provided any tax advice related to the Separation Benefit.
Employee, on behalf of Employee and Employee’s spouse and dependents, as applicable, may elect to continue medical and dental benefits pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (COBRA), if Employee was enrolled in the Company provided benefits as of the Separation Date.
In the event it is determined the aggregate amount of the payments and benefits comprising the Separation Benefit that could be considered “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (collectively, with the regulations and other guidance promulgated thereunder, the “Code”; and such payments and benefits, the “Parachute Payments”) that, but for this paragraph would be payable to you under this Release or any other plan, policy, or arrangement of the Company, exceeds the greatest amount of Parachute Payments that could be paid to you without giving rise to any liability for any excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the aggregate amount of Parachute Payments payable to you shall not exceed the amount that produces the greatest after-tax benefit to you after taking into account any Excise Tax to be payable by you. Any reduction in Parachute Payments pursuant to the immediately preceding sentence shall be made in the following order: (1) cash payments that do not constitute deferred compensation within the meaning of Section 409A of the Code, (2) welfare or in-kind benefits, (3) equity compensation awards, and (4) cash payments that do constitute deferred compensation; in each case, such reductions shall be made in the manner that maximizes the present value to you of all such payments. For the avoidance of doubt, the amounts payable to you under this paragraph shall be in lieu of any amounts payable to you under the prior paragraph.
Barnes & Noble Education
120 Mountain View Boulevard
Basking Ridge, New Jersey 07920
(908) 991-2665
Employee affirms and warrants that Employee has informed the Company Benefits Department in writing if Employee (i) is a Medicare beneficiary; (ii) is currently receiving, has received in the past, or is eligible for benefits from Medicare; or (iii) has applied for or sought benefits from Medicare. Employee agrees to indemnify and hold the Company harmless for any penalties or liability, including interest, that may be asserted against the Company pursuant to Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007, 42 U.S.C. § 1395y(b)(8), as a result of the payments and benefits described in section 2 of this Release.
3. (a) THIS SECTION PROVIDES A COMPLETE RELEASE AND WAIVER OF ALL EXISTING AND POTENTIAL CLAIMS EMPLOYEE MAY HAVE AGAINST EVERY PERSON AND ENTITY INCLUDED WITHIN THE DESCRIPTION BELOW OF “RELEASEE.” BEFORE EMPLOYEE SIGNS THIS RELEASE, EMPLOYEE MUST READ THIS SECTION CAREFULLY, AND MAKE SURE THAT EMPLOYEE UNDERSTANDS IT FULLY.
(b) In consideration of Employee’s receipt and acceptance of the Separation Benefit from the Company, and on behalf of the Company and each Releasee, Employee, on Employee’s behalf and on behalf of Employee’s heirs, executors, administrators, successors and assigns (collectively, “Releasor”), hereby irrevocably, unconditionally and generally releases the Company, its current and former officers, directors, shareholders, trustees, parents, members, managers, affiliates, subsidiaries, branches, divisions, benefit plans, agents, attorneys, advisors, counselors and employees, and the current and former officers, directors, shareholders, agents, attorneys, advisors, counselors and employees of any such parent, affiliate, subsidiary, branch or division of the Company and the heirs, executors, administrators, receivers, successors and assigns of all of the foregoing (each, a “Releasee”), from or in connection with, and hereby waives and/or settles, except as provided in Section 3(c) herein, any and all actions, causes of action, suits, debts, dues, sums of money, accounts, controversies, agreements, promises, damages, judgments, executions, or any liability, claims or demands, known or unknown and of any nature whatsoever, whether or not related to employment, and which Releasor ever had, now has or hereafter can, shall or may have as of the date of this Release, including, without limitation, (i) any rights and/or claims arising under any contract, express or implied, written or oral, including, without limitation, the Employment Agreement; (ii) any rights and/or claims arising under any applicable foreign, federal, state, local or other statutes, orders, laws, ordinances, regulations or the like, or case law, that relate to employment or employment practices, including, without limitation, family and medical, and/or, specifically, that prohibit discrimination based upon age, race, religion, sex, color, creed, national origin, sexual orientation, marital status, disability, medical condition, pregnancy, veteran status or any other unlawful bases, including, without limitation, the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, as amended, the Civil Rights Acts of 1866 and 1871, as amended, the Age Discrimination in Employment Act of 1967, as amended (“ADEA”), the Older Workers Benefit Protection Act (“OWBPA”), the Immigration Reform and Control Act, the Fair Credit Reporting Act, the Consumer Credit Protection Act, the Fair Labor Standards Act, the National Labor Relations Act, the Uniform Services Employment and Reemployment Rights Act of 1994, the Genetic Information Nondiscrimination Act, the Occupational Safety and Health Act, the Patient Protection and Affordable Care Act, the Drug-Free Workplace Act, the Equal Pay Act, the Americans with Disabilities Act of 1990, as amended, the Family Medical Leave Act of 1993, as amended, the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), the Vietnam Era Veterans’ Readjustment Assistance Act of 1974, as amended, the Worker Adjustment and Retraining Notification Act of 1988, as amended, and any similar applicable statutes, orders, laws, ordinances, regulations or the like, or case law, of the State of New Jersey and the State of New York and any state in which any Releasee is subject to jurisdiction, or any political subdivision thereof, including, without limitation, and all applicable rules and regulations promulgated pursuant to or concerning any of the foregoing statutes, orders, laws, ordinances, regulations or the like; (iii) any waivable rights and/or claims relating to wages and hours, including under state or local labor or wage payment laws; (iv) any rights and/or claims to benefits that Employee may have or become entitled to receive under any severance, termination, change of control, bonus or similar policy, plan, program, agreement or similar or related arrangements, including, without limitation, any offer letter, letter agreement or employment agreement between Employee and the Company (except as set forth in Section 3(c) below); (v) any rights and/or claims that Employee may have to receive any equity in the Company (whether restricted or unrestricted) in the future; and (vi) and any rights and/or claims for attorneys’ fees. Employee agrees not to challenge or contest the reasonableness, validity, or enforceability of this Release.
If any claim is not subject to release, to the extent permitted by law, Employee waives any right or ability to be a class or collective action representative or to otherwise participate in any putative or certified class, collective or multi-party action or proceeding based on such a claim in which any Releasee is a party.
(c) Notwithstanding the foregoing, Employee does not release any Releasee from any of the following rights and/or claims: (i) any rights and/or claims Employee may have that arise after the date Employee signs this Release; (ii) any rights and/or claims that by law cannot be waived by private agreement; (iii) Employee’s right to file a charge or report with, or participate in, any investigation or proceeding conducted by the U.S. Equal Employment Opportunity Commission (“EEOC”) or other government agency; provided that even though
Barnes & Noble Education
120 Mountain View Boulevard
Basking Ridge, New Jersey 07920
(908) 991-2665
Employee can file a charge or report or participate in an investigation or proceeding conducted by the EEOC or other government agency, by executing this Release, Employee is waiving Employee’s ability to obtain relief of any kind from any Releasee to the extent permitted by law (but Employee does not waive the right to any recovery authorized under Section 21F of the Securities Exchange Act of 1934); (iv) Employee’s non-forfeitable rights to accrued benefits (within the meaning of Sections 203 and 204 of ERISA); (v) any rights and/or claims to insurance coverage under any directors’ and officers’ personal liability insurance or fiduciary insurance policy; (vi) benefits and/or the right to seek benefits under applicable workers' compensation (but claims for retaliation for exercising workers’ compensation rights are waived); (vii) benefits and/or the right to seek benefits under applicable unemployment insurance law; or (viii) vested benefits under the Company’s 401(k) plan.
4. Nothing in or about this Release is intended to, and shall not, prohibit Employee from engaging in the following activities, and the limitations herein shall not apply to the disclosure of Confidential Information (as defined in the Employment Agreement) under the following circumstances: (i) filing and, as provided for under Section 21F of the Securities Exchange Act of 1934, maintaining the confidentiality of a claim with a government agency that is responsible for enforcing a law; (ii) providing Confidential Information to the extent required by law or legal process or permitted by Section 21F of the Securities Exchange Act of 1934; or (iii) cooperating with or participating or assisting in any government or regulatory entity investigation or proceeding. With respect to each of these three scenarios, however, Employee agrees to take all reasonable steps to prevent the disclosure of Confidential Information beyond the allowable parameters described in this Section 4.
5. Employee represents and warrants that Employee has not filed or commenced any complaints, claims, actions, or proceedings of any kind against any Releasee with any federal, state, or local court or any administrative, regulatory or arbitration agency or body except those that Employee has listed with specificity next to Employee’s name in the signature block below; provided, however, that Employee is not required to disclose any complaint or other disclosures that are required or protected under the Sarbanes-Oxley Act of 2002, the Securities Exchange Act of 1934, 18 U.S.C. §1513(e), or any other law, rule, or regulation that is subject to the jurisdiction of the Securities and Exchange Commission (collectively, “SEC Actions”). Notwithstanding the above, Employee agrees that Employee shall dismiss any of the foregoing that have been filed except for SEC Actions. Except for Employee’s right to bring a proceeding pursuant to the OWBPA to challenge the validity of the release of claims pursuant to the ADEA, and otherwise as provided herein or permitted by law, Employee agrees not to commence, maintain, prosecute or participate as a party in any action or proceeding in any court or arbitration forum against the Company or any other Releasee with respect to any act, omission, transaction or occurrence up to and including the date of the execution of this Release. Employee further agrees not to instigate, encourage, assist or participate in any court action or arbitration proceeding commenced by any other person (except a government agency) against the Company, or any other Releasee. In the event any government agency seeks to obtain any relief on behalf of Employee with regard to any claim released and waived by section 3(b) of this Release, Employee covenants not to accept, recover or receive any monetary relief or award that may arise out of or in connection with any such proceeding.
Employee hereby waives any right to, and agrees not to, seek reinstatement or employment of any kind with any Releasee for a period of six (6) months following receipt of the entire Separation Benefit. Without waiver by any Releasee of the foregoing, the existence of this Release shall be a valid, nondiscriminatory basis for rejecting any such application or, in the event Employee obtains such employment, for terminating such employment.
This Release and the Separation Benefit are not intended to be, shall not be construed as, and are not an admission or concession by any Releasee of any wrongdoing or illegal or actionable acts or omissions.
6. (a) Employee hereby represents and agrees that, except as shall be required by law or as permitted under Section 3(c)(iii) or Section 4 of this Release, Employee shall (i) keep confidential and not disclose orally or in writing, to any person (except as may be required by law and as to Employee’s immediate family, attorneys and accountant/financial advisor) any and all information concerning the existence or terms of this Release and the amount of any payments made hereunder and (ii) keep confidential and not disclose orally or in writing, directly or indirectly, to any person (except Employee’s immediate family, attorneys and accountant/financial advisor), any and all information concerning any potential claims or causes of action that are being released in this Release, or allegations or facts that would support such claims or causes of action.
(b) If Employee is requested or required (by oral questions, interrogatories, requests for information, or documents, subpoena, civil investigative demand or similar process) to disclose any information covered by Section 6(a) herein, Employee shall promptly notify the Company by email to legaldepartment@bned.com of such request or requirement so that the Company may seek to avoid or minimize the required disclosure and/or to obtain an appropriate protective order or other appropriate relief to ensure that any information so disclosed is maintained in confidence to the maximum extent possible by the agency or other person receiving the disclosure,
Barnes & Noble Education
120 Mountain View Boulevard
Basking Ridge, New Jersey 07920
(908) 991-2665
or, in the discretion of the Company, to waive compliance with the provisions of this Release. Employee shall use reasonable efforts, in cooperation with the Company or otherwise, to avoid or minimize the required disclosure and/or to obtain such protective order or other relief. If, in the absence of a protective order or the receipt of a waiver hereunder, Employee is compelled to disclose such information or else stand liable for contempt or suffer other sanction, censure, or penalty, Employee shall disclose only so much of such information to the party compelling disclosure as Employee believes in good faith on the basis of advice of counsel is required by law, and Employee shall give the Company prior notice of such information Employee believes Employee is required to disclose.
(c) Employee affirms that Employee has been paid and/or has received all compensation, wages, bonuses, commissions, and/or benefits which are due and payable as of the date Employee signs this Agreement. Employee also affirms that Employee has been granted any leave to which Employee was entitled under the Family and Medical Leave Act or related state or local leave or disability accommodation laws. In addition, Employee affirms that Employee has no known workplace injuries or occupational diseases not previously reported. Employee further affirms that Employee has not been retaliated against for reporting any allegations of wrongdoing by the Company or its officers, including any allegations of corporate fraud. Employee is also not aware of any facts or information concerning any illegality or wrongdoing by the Company.
7. (a) Except as shall be required by law or as permitted under Section 3(c)(iii) or Section 4 of this Release, Employee shall not make, either directly or by or through another person, any oral or written negative, disparaging or adverse statements or representations of or concerning any Releasee in a manner that is disloyal, reckless, or maliciously untrue. Employee further represents and agrees Employee has not and will not engage in any conduct or take any actions whatsoever to cause or influence any person or entity, including, but not limited to, any past, present or prospective employee of the Company, to initiate oral, written or electronic negative, disparaging or adverse statements or representations of or concerning the Company or any Releasee that are disloyal, reckless, or maliciously untrue. To the fullest extent permitted under applicable law, Employee agrees that Employee will not, directly or indirectly, discuss or otherwise disclose any of the facts underlying this Release, the existence of this Release, or the terms of the settlement to any wire service, newspaper, radio, or television reporter, online news or other communication service, application, or website (whether a blog or through any form of social media now or hereinafter in existence, including but not limited to Facebook, Twitter, Instagram, TikTok or the like), or any other media representative, including any legal article, legal periodical, journal, case/settlement gathering source, or any other person or entity. For the avoidance of doubt, nothing herein shall be interpreted to prevent, discourage, or prohibit Employee from participating in, or assisting others in participating in, any activity under Section 7 of the Act or otherwise cooperating with the NLRB under the Act.
(b) Without limitation to the survival of any other terms of the Employment Agreement subsequent to the end of Employee’s employment, the expiration or termination of the Employment Agreement, and/or the execution and effectiveness of this Release, Employee and the Company expressly acknowledge that the terms of Sections 3 through 6 of the Employment Agreement survive and shall be in full force and effect as provided in the Agreement.
(c) Employee shall direct all requests and inquiries concerning Employee’s possible employment by prospective employers to the HR Service Center at 1-833-474-2633 or hrconnect@bned.com, which will comply with the Company’s neutral reference policy.
(d) Employee represents and agrees that Employee has returned to the Company all property of the Company, including without limitation, any keys to the offices or properties of the Company, and Company identification cards, computers, cellular telephones, or other equipment. Employee affirms that Employee is in possession of all of Employee’s property that Employee had at the Company’s premises and that the Company is not in possession of any of Employee’s property.
8. The covenants, representations, and acknowledgments made by Employee in this Release shall continue to have full force and effect after the execution and effectiveness of this Release and the delivery of the Separation Benefit, and this Release shall inure to the benefit of each Releasee, and the successors and assigns of each of them, to the extent necessary to preserve the intended benefits of such provisions. If any section of this Release is determined to be void, voidable, or unenforceable, excluding the general release language, it shall have no effect on the remainder of this Release, which shall remain in full force and effect, and the provisions so held invalid or unenforceable shall be deemed modified as to give such provisions the maximum effect permitted by applicable law. The Company shall be excused and released from any obligation to make payment of the Separation Benefit, and Employee shall be obligated to return to the Company the Separation Benefit, in the event that Employee is found to have (a) made a material misstatement in any term, condition, covenant, representation, or acknowledgment in this Release, or (b) Employee is found to have committed or commits a
Barnes & Noble Education
120 Mountain View Boulevard
Basking Ridge, New Jersey 07920
(908) 991-2665
material breach of any term, condition, or covenant in this Release. Employee understands and acknowledges that if Employee breaches this Release, Employee’s release and waiver of claims contained in this Release remain in full force and effect.
9. This Release and the Employment Agreement constitute the sole and complete agreement between the parties with respect to the matters set forth therein and, except for the Employment Agreement (which shall continue in full force and effect as stated therein), supersedes all prior agreements, understandings, and arrangements, oral or written, between Employee and the Company with respect to the subject matter thereof. This Release may not be amended or modified except by an instrument or instruments in writing signed by the party against whom enforcement of any such modification or amendment is sought. Either party may, by an instrument in writing, waive compliance by the other party with any term or provision of this Release to be performed or complied with by such other party.
10. With respect to any claims or disputes under or in connection with this Release or any claims released under Section 3 of this Release, Employee and the Company hereby acknowledge and agree that Section 9 of the Agreement shall govern. Employee acknowledges that a breach or threatened breach of the provisions of this Release may give rise to losses or damages for which the Company cannot be reasonably or adequately compensated in an action at law, and that such violation may result in irreparable and continuing harm to the Company. Accordingly, Employee agrees that, in addition to any other remedy that the Company may have at law or in equity, the Company shall be entitled to seek equitable relief, including, without limitation, injunction and specific performance and Employee hereby waives any requirements for security or posting of any bond in connection with such relief. No specification in this Release of any particular remedy shall be construed as a waiver or prohibition of any other remedies (including claims for damages) in the event of a breach or threatened breach of this Release.
11. Employee agrees and acknowledges that (a) Employee has had an adequate opportunity to review this Release and all of its terms, (b) Employee understands all of the terms of this Release, which are fair, reasonable, and are not the result of any fraud, duress, coercion, pressure, or undue influence exercised by or on behalf of any Releasee, and (c) Employee has agreed to and/or entered into this Release and all of the terms hereof, knowingly, freely, and voluntarily.
12. Older Worker Benefit Protection Act. By executing this Release, Releasor acknowledges that (a) Employee has been advised by the Company to consult with an attorney before executing this Release; (b) Employee was provided and has adequate time (that is, 21 days) to review this Release and to consider whether to sign this Release, (c) Employee has been advised that Employee has seven (7) days following execution to revoke this Release (“Revocation Period”), (d) the Release is written in a manner calculated to be understood by Employee, (e) the Release represents Employee’s knowing and voluntary release of any and all claims that Employee might have up through the date this Release is signed, including, but not limited to, any claims arising under the Age Discrimination in Employment Act, (f) Employee has not been asked to release, nor has Employee released, any claim that may arise after the date of this Release, and (g) the consideration that Employee will receive in exchange for signing this Release (that is, the Separation Benefit) is something of value to which Employee was not already entitled. Notwithstanding anything to the contrary contained herein or in the Employment Agreement, this Release shall not be effective or enforceable, and the Separation Benefit is not payable and shall not be delivered or paid by the Company, until the Revocation Period has expired (that is, the 8th day after the Employee signs the Release) and provided that Employee has not revoked this Release. Employee agrees that any revocation shall be made in writing and delivered to Rhea Kaston via email at rkaston@bncollege.com in a manner such that it is delivered before the expiration of the Revocation Period. Employee acknowledges that revocation of this Release shall result in the Company’s not having an obligation to pay the Separation Benefit. Employee agrees any modifications, material or otherwise, made to this Release, do not restart or affect in any manner the original twenty-one (21) calendar day consideration period.
13. In the event any signature is delivered by electronic transmission, such signature shall create a valid and binding obligation of the party executing the same with the same force and effect as if such electronic signature page were an original thereof.
SO AGREED:
Kevin Watson
Signature: _________________________________________ Date: ______________________________
Barnes & Noble Education
120 Mountain View Boulevard
Basking Ridge, New Jersey 07920
(908) 991-2665
Exhibit 99.1
Barnes & Noble Education Reports First Quarter Fiscal Year 2024 Financial Results
Consolidated Revenue Increased 3.7% to $264.2 Million
Retail Segment Gross Comparable Store Sales Increased 5.9%
Course Material Gross Comparable Store Sales Increased 6.5%
First Day® Complete Revenue Increased 55% to $25.5 Million
Consolidated GAAP Net Loss from Continuing Operations Decreased by $0.3 Million and Consolidated Adjusted EBITDA (Non-GAAP) Increased by $7.5 Million
September 6, 2023, Basking Ridge, NJ-Barnes & Noble Education, Inc. (NYSE: BNED), a leading solutions provider for the education industry, today reported sales and earnings for the first quarter ended on July 29, 2023. Barnes & Noble Education is a highly seasonal business, and the first quarter is historically a period of low sales activity for the Company.
Financial Results for the First Quarter Fiscal Year 2024:
•Consolidated first quarter GAAP sales of $264.2 million increased by $9.5 million, or 3.7%, as compared to $254.7 million in the prior year period. The first quarter sales increase is primarily related to higher course material sales, primarily through the Company’s First Day programs.
•Consolidated first quarter GAAP gross profit of $50.6 million decreased by $5.4 million, or 9.6%, as compared to $56.0 in the prior year period.
•Consolidated first quarter selling and administrative expenses decreased by $12.9 million, or 14.2%, as compared to the prior year period.
•Consolidated first quarter GAAP net loss from continuing operations of $(50.0) million decreased by $0.3 million, or 0.7%, compared to a net loss from continuing operations of $(50.3) million in the prior year period. The decrease in first quarter GAAP net loss from continuing operations was due to decreases of $12.9 million in selling and administrative expenses and $0.8 million in income tax expense, partially offset by a $5.4 million decrease in gross profit and increases of $4.4 million in interest expense and $4.3 million in restructuring expense.
•Consolidated first quarter non-GAAP Adjusted Earnings of $(45.3) million increased by $4.6 million, compared to $(49.9) million in the prior year period.
•Consolidated first quarter non-GAAP Adjusted EBITDA of $(26.8) million increased by $7.5 million, or 21.8%, compared to $(34.3) million in the prior year period.
Operational Highlights for the First Quarter Fiscal Year 2024:
•BNC First Day total revenue increased by $16.7 million, or 37%, to $61.7 million compared to $45.1 million during the prior year period.
•First Day® Complete revenue grew by $9.0 million, or 55%, to $25.5 million, as compared to $16.5 million in the prior year period.
•157 campus stores are utilizing First Day® Complete in the Fall of 2023 representing enrollment of nearly 800,000 undergraduate and post graduate students*, an increase of approximately 46% compared to Fall of 2022.
•Total Retail segment gross comparable store sales increased by $15.8 million, or 5.9%, comprised of a 6.5% increase in course material gross comparable store sales, and a 5.3% increase in general merchandise gross comparable store sales. For comparable store sales reporting purposes, logo general merchandise sales fulfilled by Lids and Fanatics are included on a gross basis.
•Ended the quarter with 1,289 physical and virtual stores, a net decrease of 117 stores, as compared to the prior year period, as the Company focuses on winding down under-performing, less profitable stores and satellite locations.
•On July 28, 2023, the Company amended and extended the maturity date of its credit facility to enhance its financial and operating flexibility.
*As reported by National Center for Education Statistics (NCES)
“Our fiscal year 2024 is off to a solid start and our first quarter results reflect clear progress against our strategic initiatives. Thanks to the focus of the BNED team, the impact from our operational efficiency and cost reductions actions are taking hold and our First Day Complete equitable access model continues to gain momentum. Based on the significant number of new and existing schools committed to First Day Complete for the Fall and Spring semesters we are well positioned to deliver strong growth, in our seasonally higher-volume second and third fiscal quarters,” said Michael P. Huseby, Chief Executive Officer, BNED.
“Even with 117 fewer stores versus a year ago, total Retail sales increased 3.8%, driven by a 5.9% increase in total retail Gross comparable stores sales, led by 55% growth in First Day Complete revenue. This sales growth, combined with our continued focus on disciplined cost management and profitability drove significant operating leverage. We remain focused on achieving both in-year profitability and sustained, long-term, profitable growth through continued execution of our business model transformation. Accelerated adoptions of our First day Complete course material model, improved execution of our general merchandise business, and our ongoing cost-reduction actions are all creating operating and financial benefits that we expect to drive improved results.”
First Quarter Fiscal Year 2024 Results
The Company has two reportable segments: Retail and Wholesale. Additionally, unallocated shared-service costs, which include various corporate level expenses and other governance functions, are not allocated to any specific reporting segment and are presented as “Corporate Services.” All material intercompany accounts and transactions have been eliminated in consolidation.
Retail Segment Results
First quarter Retail sales increased by $9.0 million, or 3.8%, as compared to the prior year period. Retail Gross Comparable Store Sales increased 5.9% for the quarter, with comparable course material sales increasing 6.5% and gross comparable general merchandise increasing 5.3%. The increase in course material product sales was due to growth from the Company’s First Day models, which increased by $16.7 million, or 37%, to $61.8 million, as compared to $45.1 million in the prior year period.
First quarter Retail gross profit decreased by $3.7 million, or 6.9%, to $50.3 million, or 20.5% of sales, from $54.0 million, or 22.8% of sales in the prior year period. The gross profit decrease was primarily driven by higher markdowns related to closed store inventory and lower commissions for emblematic general merchandise pursuant to the Fanatics and Lids Partnership agreements, under which the commission rates adjust as the relationship matures. These decreases were partially offset by lower contract costs as a percentage of sales related to our college and university contracts and a favorable sales mix due to increased general merchandise sales primarily for graduation products. Effective August 1, 2023, the commission rates for emblematic general merchandise increased for an estimated one year period under the terms of the July 2023 Term Loan Credit Agreement amendment.
First quarter Retail selling and administrative expenses decreased by $9.8 million, or 12.4%, to $69.2 million from $79.0 million in the prior year period. This decrease was primarily due to the Company’s cost savings and productivity initiatives comprised of a $6.0 million decrease in comparable store payroll expense, new/closed store
payroll expense and related operating costs, a $1.6 million decrease in corporate payroll expense, infrastructure and product development costs, and a $2.2 million decrease in incentive plan compensation expense.
Retail non-GAAP Adjusted EBITDA for the seasonally low-volume first quarter of fiscal year 2024 was $(18.9) million, as compared to $(25.0) million in the prior year period. Non-GAAP Adjusted EBITDA increased by $6.1 million due to lower selling and administrative expenses, offset by lower gross profit.
Wholesale Segment Results (Before Intercompany Eliminations)
Wholesale first quarter sales increased by $1.7 million, or 4.6% to $38.8 million from $37.1 million in the prior year period. The increase is primarily due to higher gross sales of $5.1 million compared to the prior year period, partially offset by higher returns and allowances of $3.4 million.
Gross profit for Wholesale was $5.8 million, or 14.9% of sales, in the first quarter of 2024 compared to $6.9 million, or 18.6% of sales, in the first quarter of 2023. Gross profit and the gross margin rate decreased in the first quarter of 2024 primarily due to higher product costs and an increase in the returns and allowances, partially offset by lower markdowns.
First quarter Wholesale selling and administrative expenses decreased by $0.7 million, or 18.0%, to $3.4 million compared to $4.1 million in the prior year period. The decrease was primarily due to cost savings initiatives of $0.7 million comprised of lower payroll and incentive plan compensation expense.
Wholesale non-GAAP Adjusted EBITDA for the quarter decreased to $2.4 million, as compared to $2.8 million in the prior year. The decrease in Wholesale non-GAAP Adjusted EBITDA is due to the lower gross margin in the first quarter of 2024.
Balance Sheet and Cash Flow
As of July 29, 2023, the Company’s cash and cash equivalents was $7.7 million and total outstanding debt was $277.7 million, as compared to cash and cash equivalents of $7.6 million and total outstanding debt of $258.5 million in the prior year period.
On July 28, 2023, the Company announced that it entered into an agreement with its financial stakeholders and strategic partners on the terms of a refinancing that strengthened the Company’s liquidity and overall financial positions by extending the maturity of its debt facilities, amending certain credit facility covenants and modifying certain other agreements. With this agreement, the Company is well-positioned to continue supporting academic institutions and customers nationwide through the 2023 and 2024 academic years.
Fiscal Year 2024 Outlook
For fiscal year 2024, the Company continues to expect consolidated non-GAAP Adjusted EBITDA from Continuing Operations of approximately $40 million. The year-over-year increase in non-GAAP Adjusted EBITDA from Continuing Operations will be driven by growth in the Company’s Retail Segment and the impact of cost reductions executed in fiscal year 2023, and other cost reductions executed in, or planned for execution in, fiscal year 2024.
Conference Call
A conference call with Barnes & Noble Education, Inc. senior management will be webcast at 8:30 a.m. Eastern Time on Wednesday, September 6, 2023 and can be accessed at the Barnes & Noble Education corporate website at investor.bned.com or www.bned.com.
Barnes & Noble Education expects to report fiscal year 2024 second quarter results in early December 2023.
EXPLANATORY NOTE
On May 31, 2023, we completed the sale of these assets related to our DSS Segment. The results of operations related to the DSS Segment are included in the condensed consolidated statements of operations as "Loss from discontinued operations, net of tax." The cash flows of the DSS Segment are also presented separately in our condensed consolidated statements of cash flows.
We have two reportable segments: Retail and Wholesale as follows:
•The Retail Segment operates 1,289 college, university, and K-12 school bookstores, comprised of 726 physical bookstores and 563 virtual bookstores. Our bookstores typically operate under agreements with the college, university, or K-12 schools to be the official bookstore and the exclusive seller of course materials and supplies, including physical and digital products. The majority of the physical campus bookstores have school-branded e-commerce websites which we operate independently or along with our merchant partners, and which offer students access to affordable course materials and affinity products, including emblematic apparel and gifts. The Retail Segment offers our BNC First Day® equitable and inclusive access programs, consisting of First Day Complete and First Day, which provide faculty required course materials on or before the first day of class at a discounted rate, as compared to the total retail price for the same course materials if purchased separately. The BNC First Day discounted price is offered as a course fee or included in tuition. Additionally, the Retail Segment offers a suite of digital content and services to colleges and universities, including a variety of open educational resource-based courseware.
•The Wholesale Segment is comprised of our wholesale textbook business and is one of the largest textbook wholesalers in the country. The Wholesale Segment centrally sources, sells, and distributes new and used textbooks to approximately 2,900 physical bookstores (including our Retail Segment's 726 physical bookstores) and sources and distributes new and used textbooks to our 563 virtual bookstores. Additionally, the Wholesale Segment sells hardware and a software suite of applications that provides inventory management and point-of-sale solutions to approximately 330 college bookstores.
Corporate Services represents unallocated shared-service costs which include corporate level expenses and other governance functions, including executive functions, such as accounting, legal, treasury, information technology, and human resources.
All material intercompany accounts and transactions have been eliminated in consolidation.
BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | 13 weeks ended |
| | | | | July 29, 2023 | | July 30, 2022 |
| Sales: | | | | | | | |
| Product sales and other | | | | | $ | 252,650 | | | $ | 243,762 | |
| Rental income | | | | | 11,511 | | | 10,912 | |
| Total sales | | | | | 264,161 | | | 254,674 | |
| Cost of sales (exclusive of depreciation and amortization expense): | | | | | | | |
| Product and other cost of sales | | | | | 207,014 | | | 192,404 | |
| Rental cost of sales | | | | | 6,513 | | | 6,265 | |
| Total cost of sales | | | | | 213,527 | | | 198,669 | |
| Gross profit | | | | | 50,634 | | | 56,005 | |
| Selling and administrative expenses | | | | | 77,476 | | | 90,341 | |
| Depreciation and amortization expense | | | | | 10,253 | | | 10,896 | |
| | | | | | | |
Restructuring and other charges (a) | | | | | 4,633 | | | 375 | |
| | | | | | | |
| Operating loss | | | | | (41,728) | | | (45,607) | |
| Interest expense, net | | | | | 8,254 | | | 3,868 | |
| Loss from continuing operations before income taxes | | | | | (49,982) | | | (49,475) | |
| Income tax (benefit) expense | | | | | (11) | | | 847 | |
| Loss from continuing operations | | | | | $ | (49,971) | | | $ | (50,322) | |
| Loss from discontinued operations, net of tax of $20, and $86, respectively | | | | | $ | (417) | | | $ | (2,385) | |
| Net loss | | | | | $ | (50,388) | | | $ | (52,707) | |
| | | | | | | |
| Loss per share of common stock: | | | | | | | |
| Basic and Diluted: | | | | | | | |
| Continuing operations | | | | | $ | (0.95) | | | $ | (0.96) | |
| Discontinued operations | | | | | $ | (0.01) | | | $ | (0.05) | |
| Total Basic and Diluted Earnings per share | | | | | $ | (0.96) | | | $ | (1.01) | |
| Weighted average common shares outstanding - Basic and Diluted | | | | | 52,642 | | | 52,172 | |
| | | | | | | |
| (a) For additional information, see the Notes in the Non-GAAP disclosure information of this Press Release. |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
|
|
| | | | | | | | | | | | | | | | | |
| | | 13 weeks ended |
| | | | | July 29, 2023 | | July 30, 2022 |
| Percentage of sales: | | | | | | | |
| Sales: | | | | | | | |
| Product sales and other | | | | | 95.6 | % | | 95.7 | % |
| Rental income | | | | | 4.4 | % | | 4.3 | % |
| Total sales | | | | | 100.0 | % | | 100.0 | % |
| Cost of sales (exclusive of depreciation and amortization expense): | | | | | | | |
Product and other cost of sales (a) | | | | | 81.9 | % | | 78.9 | % |
Rental cost of sales (a) | | | | | 56.6 | % | | 57.4 | % |
| Total cost of sales | | | | | 80.8 | % | | 78.0 | % |
| Gross profit | | | | | 19.2 | % | | 22.0 | % |
| Selling and administrative expenses | | | | | 29.3 | % | | 35.5 | % |
| Depreciation and amortization expense | | | | | 3.9 | % | | 4.3 | % |
| | | | | | | |
| Restructuring and other charges | | | | | 1.8 | % | | 0.1 | % |
| | | | | | | |
| Operating loss | | | | | (15.8) | % | | (17.9) | % |
| Interest expense, net | | | | | 3.1 | % | | 1.5 | % |
| Loss from continuing operations before income taxes | | | | | (18.9) | % | | (19.4) | % |
| Income tax (benefit) expense | | | | | — | % | | 0.3 | % |
| Loss from continuing operations | | | | | (18.9) | % | | (19.7) | % |
| | | | | | | |
(a) Represents the percentage these costs bear to the related sales, instead of total sales. |
BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
(Unaudited)
| | | | | | | | | | | |
| July 29, 2023 | | July 30, 2022 |
| ASSETS | | | |
| Current assets: | | | |
| Cash and cash equivalents | $ | 7,657 | | | $ | 7,615 | |
| Receivables, net | 140,858 | | | 118,954 | |
| Merchandise inventories, net | 384,185 | | | 463,555 | |
| Textbook rental inventories | 6,860 | | | 8,501 | |
| Prepaid expenses and other current assets | 59,012 | | | 57,184 | |
| Assets held for sale, current | — | | | 30,425 | |
| | | |
| Total current assets | 598,572 | | | 686,234 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Property and equipment, net | 64,438 | | | 73,734 | |
| Operating lease right-of-use assets | 283,096 | | | 318,070 | |
| Intangible assets, net | 107,413 | | | 123,339 | |
| | | |
| | | |
| Other noncurrent assets | 17,298 | | | 22,242 | |
| Total assets | $ | 1,070,817 | | | $ | 1,223,619 | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | |
| Current liabilities: | | | |
| Accounts payable | $ | 275,380 | | | $ | 324,397 | |
| Accrued liabilities | 89,792 | | | 88,982 | |
| Current operating lease liabilities | 150,917 | | | 149,587 | |
| Short-term borrowings | — | | | 40,000 | |
| Liabilities held for sale | — | | | 5,482 | |
| Total current liabilities | 516,089 | | | 608,448 | |
| Long-term deferred taxes, net | 1,836 | | | 1,430 | |
| Long-term operating lease liabilities | 171,154 | | | 197,407 | |
| Other long-term liabilities | 23,016 | | | 20,938 | |
| Long-term borrowings | 277,663 | | | 218,550 | |
| Total liabilities | 989,758 | | | 1,046,773 | |
| Commitments and contingencies | — | | | — | |
| Stockholders' equity: | | | |
| | | |
Preferred stock, $0.01 par value; authorized, 5,000 shares; issued and outstanding, none | — | | | — | |
Common stock, $0.01 par value; authorized, 200,000 shares; issued, 55,319 and 54,774 shares, respectively; outstanding, 52,705 and 52,348 shares, respectively | 553 | | | 547 | |
| Additional paid-in-capital | 746,724 | | | 742,624 | |
| Accumulated deficit | (643,744) | | | (544,201) | |
| Treasury stock, at cost | (22,474) | | | (22,124) | |
| Total stockholders' equity | 81,059 | | | 176,846 | |
| Total liabilities and stockholders' equity | $ | 1,070,817 | | | $ | 1,223,619 | |
| | | |
BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flow (Unaudited)
(In thousands, except per share data)
| | | | | | | | | | | | | | |
| | 13 weeks ended |
| | July 29, 2023 | | July 30, 2022 |
| Cash flows from operating activities: | | | | |
| Net loss | | $ | (50,388) | | | $ | (52,707) | |
| Less: Loss from discontinued operations, net of tax | | (417) | | | (2,385) | |
| Loss from continuing operations | | (49,971) | | | (50,322) | |
| Adjustments to reconcile net loss from continuing operations to net cash flows from operating activities from continuing operations: | | | | |
| Depreciation and amortization expense | | 10,253 | | | 10,896 | |
| Content amortization expense | | — | | | 26 | |
| Amortization of deferred financing costs | | 1,244 | | | 555 | |
| | | | |
| | | | |
| Deferred taxes | | (3) | | | — | |
| Stock-based compensation expense | | 957 | | | 1,576 | |
| Changes in operating lease right-of-use assets and liabilities | | 721 | | | (1,230) | |
| Changes in other long-term assets and liabilities, net | | 4,056 | | | 1,782 | |
| Changes in other operating assets and liabilities, net: | | | | |
| Receivables, net | | (48,346) | | | 17,048 | |
| Merchandise inventories | | (61,206) | | | (169,701) | |
| Textbook rental inventories | | 23,489 | | | 21,110 | |
| Prepaid expenses and other current assets | | (12,168) | | | (782) | |
| Accounts payable and accrued liabilities | | 11,116 | | | 140,435 | |
| Changes in other operating assets and liabilities, net | | (87,115) | | | 8,110 | |
| Net cash flows used in operating activities from continuing operations | | (119,858) | | | (28,607) | |
| Net cash flows used in operating activities from discontinued operations | | (3,266) | | | (392) | |
| Net cash flow used in operating activities | | $ | (123,124) | | | $ | (28,999) | |
| Cash flows from investing activities: | | | | |
| Purchases of property and equipment | | $ | (4,219) | | | $ | (7,530) | |
| Changes in other noncurrent assets and other | | 78 | | | — | |
| Net cash flows used in investing activities from continuing operations | | (4,141) | | | (7,530) | |
| Net cash flows provided by (used in) investing activities from discontinued operations | | 21,395 | | | (2,196) | |
| Net cash flow used in investing activities | | $ | 17,254 | | | $ | (9,726) | |
| Cash flows from financing activities: | | | | |
| Proceeds from borrowings | | $ | 145,187 | | | $ | 147,200 | |
| Repayments of borrowings | | (49,606) | | | (112,600) | |
| Payment of deferred financing costs | | (2,307) | | | (559) | |
| | | | |
| Purchase of treasury shares | | (98) | | | (612) | |
| Proceeds from the exercise of stock options, net | | — | | | — | |
| Net cash flows provided by financing activities from continuing operations | | 93,176 | | | 33,429 | |
| Net cash flows provided by financing activities from discontinued operations | | — | | | — | |
| Net cash flows provided by financing activities | | $ | 93,176 | | | $ | 33,429 | |
| Net decrease in cash, cash equivalents and restricted cash | | $ | (12,694) | | | $ | (5,296) | |
| | | | | | | | | | | | | | |
| Cash, cash equivalents and restricted cash at beginning of period | | 31,988 | | | 21,036 | |
| Cash, cash equivalents, and restricted cash at end of period | | 19,294 | | | 15,740 | |
| Less: Cash, cash equivalents, and restricted cash of discontinued operations at end of period | | — | | | (633) | |
| Cash, cash equivalents, and restricted cash of continuing operations at end of period | | $ | 19,294 | | | $ | 15,107 | |
| | | | |
| | | | |
|
BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Segment Information - Continuing Operations (In thousands, except percentages) (Unaudited)
| | | | | | | | | | | | | | | | | |
Segment Information (a) - Continuing Operations | | | 13 weeks ended |
| | | | | July 29, 2023 | | July 30, 2022 |
| Sales: | | | | | | | |
Retail (b) | | | | | $ | 245,460 | | | $ | 236,507 | |
| Wholesale | | | | | 38,791 | | | 37,083 | |
| Eliminations | | | | | (20,090) | | | (18,916) | |
| Total Sales | | | | | $ | 264,161 | | | $ | 254,674 | |
| | | | | | | |
| Gross Profit | | | | | | | |
Retail (c) | | | | | $ | 50,291 | | | $ | 54,019 | |
| Wholesale | | | | | 5,794 | | | 6,899 | |
| Eliminations | | | | | (5,451) | | | (4,887) | |
| Total Gross Profit | | | | | $ | 50,634 | | | $ | 56,031 | |
| | | | | | | |
| Selling and Administrative Expenses | | | | | | | |
| Retail | | | | | $ | 69,173 | | | $ | 79,004 | |
| Wholesale | | | | | 3,388 | | | 4,131 | |
| Corporate Services | | | | | 4,918 | | | 7,214 | |
| Eliminations | | | | | (3) | | | (8) | |
| Total Selling and Administrative Expenses | | | | | $ | 77,476 | | | $ | 90,341 | |
| | | | | | | |
Segment Adjusted EBITDA (Non-GAAP) (d) | | | | | | | |
| Retail | | | | | $ | (18,882) | | | $ | (24,985) | |
| Wholesale | | | | | 2,406 | | | 2,768 | |
| Corporate Services | | | | | (4,918) | | | (7,214) | |
| Eliminations | | | | | (5,448) | | | (4,879) | |
| Total Segment Adjusted EBITDA (Non-GAAP) | | | | | $ | (26,842) | | | $ | (34,310) | |
| | | | | | | |
| Percentage of Segment Sales | | | | | | | |
| Gross Profit | | | | | | | |
Retail (c) | | | | | 20.5 | % | | 22.8 | % |
| Wholesale | | | | | 14.9 | % | | 18.6 | % |
| Eliminations | | | | | 27.1 | % | | 25.8 | % |
| Total Gross Profit | | | | | 19.2 | % | | 22.0 | % |
| | | | | | | |
| Selling and Administrative Expenses | | | | | | | |
| Retail | | | | | 28.2 | % | | 33.4 | % |
| Wholesale | | | | | 8.7 | % | | 11.1 | % |
| Total Selling and Administrative Expenses | | | | | 29.3 | % | | 35.5 | % |
| | | | | | | |
(a) See Explanatory Note in this Press Release for Segment descriptions.
(b) Logo general merchandise sales for the Retail Segment are recognized on a net basis as commission revenue in the condensed consolidated financial statements. For Retail Gross Comparable Store Sales details, see the Sales Information disclosure of this Press Release.
(c) For the 13 weeks ended July 29, 2023 and July 30, 2022, the Retail Segment gross margin excludes $0 and $26 respectively, of amortization expense (non-cash) related to content development costs.
(d) For additional information, including a reconciliation to the most comparable financial measures presented in accordance with GAAP, see "Non-GAAP Information" and "Use of Non-GAAP Financial Information" in the Non-GAAP disclosure information of this Press Release.
BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Segment Information - Discontinued Operations (Unaudited)
(In thousands, except percentages)
During the fourth quarter of fiscal 2023, assets related to our Digital Student Solutions ("DSS") Segment met the criteria for classification as Assets Held for Sale and Discontinued Operations and is no longer a reportable segment. Certain assets and liabilities associated with the DSS Segment are presented in our condensed consolidated balance sheets as "Assets Held for Sale" and "Liabilities Held for Sale". The results of operations related to the DSS Segment are included in the condensed consolidated statements of operations as "Loss from discontinued operations, net of tax." The cash flows of the DSS Segment are also presented separately in our condensed consolidated statements of cash flows.
On May 31, 2023, we completed the sale of these assets related to our DSS Segment for cash proceeds of $20,000, net of certain transaction fees, severance costs, escrow, and other considerations. During the 13 weeks ended July 29, 2023, we recorded a Gain on Sale of Business of $3,068 in Net Loss from Discontinued Operations related to the sale. Net cash proceeds from the sale were used for debt repayment and to provide additional funds for working capital needs under our Credit Facility.
The following table summarizes the operating results of the discontinued operations for the periods indicated:
| | | | | | | | | | | | | | | | | |
Segment Information - Discontinued Operations | | | 13 weeks ended |
| | | | | July 29, 2023 | | July 30, 2022 |
| Total sales | | | | | $ | 2,784 | | | $ | 9,184 | |
Cost of sales (a) | | | | | 76 | | | 1,700 | |
Gross profit (a) | | | | | 2,708 | | | 7,484 | |
| Selling and administrative expenses | | | | | 2,281 | | | 8,146 | |
| Depreciation and amortization | | | | | — | | | 1,637 | |
| Gain on sale of business | | | | | (3,068) | | | — | |
Impairment loss (non-cash) (b) | | | | | 610 | | | — | |
Restructuring costs (c) | | | | | 3,287 | | | — | |
| Transaction costs | | | | | (5) | | | — | |
| Operating loss | | | | | (397) | | | (2,299) | |
| Income tax expense | | | | | 20 | | | 86 | |
| Loss from discontinued operations, net of tax | | | | | $ | (417) | | | $ | (2,385) | |
| | | | | | | |
(a) Cost of sales and Gross margin for the DSS Segment includes amortization expense (non-cash) related to content development costs of $0 and $1,551 for the 13 weeks ended July 29, 2023 and July 30, 2022, respectively.
(b) During the 13 weeks ended July 29, 2023, we recognized an impairment loss (non-cash) of $610 (both pre-tax and after-tax), comprised of $119 and $491 of property and equipment and operating lease right-of-use assets, respectively, on the condensed consolidated statement of operations as part of discontinued operations.
(c) During the 13 weeks ended July 29, 2023, we recognized restructuring and other charges of $3,287 comprised of severance and other employee termination costs.
| | | | | | | | | | | | | | | | | |
| | | 13 weeks ended |
| Adjusted EBITDA (non-GAAP) - Discontinued Operations | | | | | July 29, 2023 | | July 30, 2022 |
| Loss from discontinued operations | | | | | $ | (417) | | | $ | (2,385) | |
| Add: | | | | | | | |
| Depreciation and amortization expense | | | | | — | | | 1,637 | |
| Income tax expense | | | | | 20 | | | 86 | |
| Content amortization (non-cash) | | | | | — | | | 1,551 | |
| Gain on sale of business | | | | | (3,068) | | | — | |
| Impairment loss (non-cash) | | | | | 610 | | | — | |
| Restructuring and other charges | | | | | 3,287 | | | — | |
| Transaction costs | | | | | (5) | | | — | |
| Adjusted EBITDA (Non-GAAP) - Total | | | | | $ | 427 | | | $ | 889 | |
BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Sales Information
(Unaudited)
Total Sales
The components of the sales variances for the 13 week periods are as follows:
| | | | | | | | | | | | | |
| | | | | | | |
| Dollars in millions | | | | 13 weeks ended |
| | | | | | July 29, 2023 | |
Retail Sales (a) | | | | | | | |
New stores (b) | | | | | | $ | 4.7 | | |
Closed stores (b) | | | | | | (7.3) | | |
Comparable stores (a) | | | | | | 8.6 | | |
| Textbook rental deferral | | | | | | 2.1 | | |
Service revenue (c) | | | | | | (0.3) | | |
Other (d) | | | | | | 1.2 | | |
| Retail Sales subtotal: | | | | | | $ | 9.0 | | |
| Wholesale Sales: | | | | | | $ | 1.7 | | |
Eliminations (e) | | | | | | $ | (1.2) | | |
| Total sales variance | | | | | | $ | 9.5 | | |
(a) Logo general merchandise sales for the Retail Segment are recognized on a net basis as commission revenue in the condensed consolidated financial statements. For Retail Gross Comparable Store Sales details, see below.
(b) The following is a store count summary for physical stores and virtual stores:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 13 weeks ended |
| | | | | July 29, 2023 | | July 30, 2022 |
| Number of Stores: | | | | | | | | | | | | | Physical | | Virtual | | Total | | Physical | | Virtual | | Total |
| Beginning of period | | | | | | | | | | | | | 774 | | | 592 | | | 1,366 | | | 805 | | | 622 | | | 1,427 | |
| Stores opened | | | | | | | | | | | | | 8 | | | 12 | | | 20 | | | 26 | | | 14 | | | 40 | |
| Stores closed | | | | | | | | | | | | | 56 | | | 41 | | | 97 | | | 38 | | | 23 | | | 61 | |
| End of period | | | | | | | | | | | | | 726 | | | 563 | | | 1,289 | | | 793 | | | 613 | | | 1,406 | |
(c) Service revenue includes brand partnerships, shipping and handling, and revenue from other programs.
(d) Other includes inventory liquidation sales to third parties, marketplace sales and certain accounting adjusting items related to return reserves, and other deferred items.
(e) Eliminates Wholesale sales and service fees to Retail and Retail commissions earned from Wholesale.
Retail Gross Comparable Store Sales
Retail Gross Comparable Store Sales variances by category for the 13 week periods are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Dollars in millions | | | 13 weeks ended |
| | | | | July 29, 2023 | | July 30, 2022 |
| Textbooks (Course Materials) | | | | | | | | | $ | 9.0 | | | 6.5 | % | | $ | 1.9 | | | 1.5 | % |
| General Merchandise | | | | | | | | | 6.8 | | | 5.3 | % | | 31.6 | | | 34.0 | % |
| | | | | | | | | | | | | | | |
| Total Retail Gross Comparable Store Sales | | | | | | | | | $ | 15.8 | | | 5.9 | % | | $ | 33.5 | | | 15.0 | % |
| | | | | | | | | | | | | | | |
To supplement the Total Sales table presented above, the Company uses Retail Gross Comparable Store Sales as a key performance indicator. Retail Gross Comparable Store Sales includes sales from physical and virtual stores that have been open for an entire fiscal year period and does not include sales from permanently closed stores for all periods presented. For Retail Gross Comparable Store Sales, sales for logo general merchandise fulfilled by Lids, Fanatics and digital agency sales are included on a gross basis in Retail Gross Comparable Store Sales compared to a net basis as commission revenue in our condensed consolidated financial statements.
We believe the current Retail Gross Comparable Store Sales calculation method reflects management’s view that such comparable store sales are an important measure of the growth in sales when evaluating how established stores have performed over time. We present this metric as additional useful information about the Company’s operational and financial performance and to allow greater transparency with respect to important metrics used by management for operating and financial decision-making. Retail Gross Comparable Store Sales are also referred to as "same-store" sales by others within the retail industry and the method of calculating comparable store sales varies across the retail industry. As a result, our calculation of comparable store sales is not necessarily comparable to similarly titled measures reported by other companies and is intended only as supplemental information and is not a substitute for net sales presented in accordance with GAAP.
BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Non-GAAP Information (a)
(In thousands) (Unaudited)
| | | | | | | | | | | | | | | | | |
Consolidated Adjusted Earnings (non-GAAP) (a) - Continuing Operations | | | 13 weeks ended |
| | | | | July 29, 2023 | | July 30, 2022 |
| Net loss from continuing operations | | | | | $ | (49,971) | | | $ | (50,322) | |
| Reconciling items (below) | | | | | 4,633 | | | 401 | |
| Adjusted Earnings (non-GAAP) | | | | | $ | (45,338) | | | $ | (49,921) | |
| | | | | | | |
| Reconciling items | | | | | | | |
| | | | | | | |
| | | | | | | |
Content amortization (non-cash) (b) | | | | | $ | — | | | $ | 26 | |
Restructuring and other charges (c) | | | | | 4,633 | | | 375 | |
| | | | | | | |
Reconciling items (d) | | | | | $ | 4,633 | | | $ | 401 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Consolidated Adjusted EBITDA (non-GAAP) (a) | | | 13 weeks ended |
| | | | | July 29, 2023 | | July 30, 2022 |
| Net loss from continuing operations | | | | | $ | (49,971) | | | $ | (50,322) | |
| Add: | | | | | | | |
| Depreciation and amortization expense | | | | | 10,253 | | | 10,896 | |
| Interest expense, net | | | | | 8,254 | | | 3,868 | |
| Income tax (benefit) expense | | | | | (11) | | | 847 | |
| | | | | | | |
| | | | | | | |
Content amortization (non-cash) (b) | | | | | — | | | 26 | |
Restructuring and other charges (c) | | | | | 4,633 | | | 375 | |
| | | | | | | |
| Adjusted EBITDA (Non-GAAP) - Continuing Operations | | | | | $ | (26,842) | | | $ | (34,310) | |
| Adjusted EBITDA (Non-GAAP) - Discontinued Operations | | | | | $ | 427 | | | $ | 889 | |
| Adjusted EBITDA (Non-GAAP) - Total | | | | | $ | (26,415) | | | $ | (33,421) | |
| | | | | | | |
Adjusted EBITDA by Segment (non-GAAP) (a) - Continuing Operations
The following is Adjusted EBITDA by Segment for Continuing Operations for the 13 week periods:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 13 weeks ended July 29, 2023 |
| | Retail | | Wholesale | | Corporate Services (e) | | Eliminations | | Total |
| Net loss from continuing operations | | $ | (28,374) | | | $ | 603 | | | $ | (16,752) | | | $ | (5,448) | | | $ | (49,971) | |
| Add: | | | | | | | | | | |
| Depreciation and amortization expense | | 8,966 | | | 1,277 | | | 10 | | | — | | | 10,253 | |
| Interest expense, net | | — | | | — | | | 8,254 | | | — | | | 8,254 | |
| Income tax benefit | | — | | | — | | | (11) | | | — | | | (11) | |
| | | | | | | | | | |
| | | | | | | | | | |
Content amortization (non-cash) (b) | | — | | | — | | | — | | | — | | | — | |
Restructuring and other charges (c) | | 526 | | | 526 | | | 3,581 | | | — | | | 4,633 | |
| Adjusted EBITDA (non-GAAP) | | $ | (18,882) | | | $ | 2,406 | | | $ | (4,918) | | | $ | (5,448) | | | $ | (26,842) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 13 weeks ended July 30, 2022 |
| | Retail | | Wholesale | | Corporate Services (e) | | Eliminations | | Total |
| Net loss from continuing operations | | $ | (34,540) | | | $ | 1,419 | | | $ | (12,322) | | | $ | (4,879) | | | $ | (50,322) | |
| Add: | | | | | | | | | | |
| Depreciation and amortization expense | | 9,529 | | | 1,349 | | | 18 | | | — | | | 10,896 | |
| Interest expense, net | | — | | | — | | | 3,868 | | | — | | | 3,868 | |
| Income tax expense | | — | | | — | | | 847 | | | — | | | 847 | |
| | | | | | | | | | |
| | | | | | | | | | |
Content amortization (non-cash) (b) | | 26 | | | — | | | — | | | — | | | 26 | |
Restructuring and other charges (c) | | — | | | — | | | 375 | | | — | | | 375 | |
| Adjusted EBITDA (non-GAAP) | | $ | (24,985) | | | $ | 2,768 | | | $ | (7,214) | | | $ | (4,879) | | | $ | (34,310) | |
(a) For additional information, see "Use of Non-GAAP Financial Information" in the Non-GAAP disclosure information of this Press Release.
(b) Represents amortization of content development costs (non-cash) recorded in cost of goods sold in the condensed consolidated financial statements.
(c) During the 13 weeks ended July 29, 2023 and July 30, 2022, we recognized restructuring and other charges totaling $4,633 and $375, respectively, comprised primarily of severance and other employee termination and benefit costs associated with the elimination of various positions as part of cost reduction objectives, and professional service costs for restructuring, process improvements.
(d) There is no pro forma income effect of the non-GAAP items.
(e) Interest expense is reflected in Corporate Services as it is primarily related to our Credit Agreement and Term Loan Agreement which fund our operating and financing needs across the organization. Income taxes are reflected in Corporate Services as we record our income tax provision on a consolidated basis.
Free Cash Flow (non-GAAP) (a) - Continuing Operations
| | | | | | | | | | | | | | | | | |
| | | 13 weeks ended |
| | | | | July 29, 2023 | | July 30, 2022 |
| Net cash flows used in operating activities from continuing operations | | | | | $ | (119,858) | | | $ | (28,607) | |
| Less: | | | | | | | |
Capital expenditures (b) | | | | | 4,219 | | | 7,530 | |
| Cash interest paid | | | | | 5,534 | | | 2,933 | |
| Cash taxes (refund) paid | | | | | 345 | | | 122 | |
| Free Cash Flow (non-GAAP) | | | | | $ | (129,956) | | | $ | (39,192) | |
| | | | | | | |
(a) For additional information, see "Use of Non-GAAP Financial Information" in the Non-GAAP disclosure information of this Press Release.
(b) Purchases of property and equipment are also referred to as capital expenditures. Our investing activities consist principally of capital expenditures for contractual capital investments associated with renewing existing contracts, new store construction, and enhancements to internal systems and our website. The following table provides the components of total purchases of property and equipment:
| | | | | | | | | | | | | | | | | |
| Capital Expenditures | | | 13 weeks ended |
| - Continuing Operations | | | | | July 29, 2023 | | July 30, 2022 |
| Physical store capital expenditures | | | | | $ | 2,205 | | | $ | 4,496 | |
| Product and system development | | | | | 1,763 | | | 2,486 | |
| | | | | | | |
| Other | | | | | 251 | | | 548 | |
| Total capital expenditures | | | | | $ | 4,219 | | | $ | 7,530 | |
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Use of Non-GAAP Financial Information - Adjusted Earnings, Adjusted EBITDA, Adjusted EBITDA by Segment, and Free Cash Flow | |
| | | | | | | | | | | |
To supplement the Company’s condensed 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 financial measures of Adjusted Earnings, Adjusted EBITDA, Adjusted EBITDA by Segment and Free Cash Flow, which are non-GAAP financial measures under Securities and Exchange Commission (the "SEC") regulations. We define Adjusted Earnings as net income (loss) from continuing operations adjusted for certain reconciling items that are subtracted from or added to net income (loss) from continuing operations. 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. We define Free Cash Flow as Cash Flows from Operating Activities from continuing operations less capital expenditures, cash interest and cash taxes. | |
| | | | | | | | | | | |
The non-GAAP measures included in the Press Release have been reconciled to the most comparable financial measures presented in accordance with GAAP, attached hereto as Exhibit 99.1, as follows: the reconciliation of Adjusted Earnings to net income (loss) from continuing operations; the reconciliation of consolidated Adjusted EBITDA to consolidated net income (loss) from continuing operations; and the reconciliation of Adjusted EBITDA by Segment to net income (loss) from continuing operations by segment. All of the items included in the reconciliations are either (i) non-cash items or (ii) items that management does not consider in assessing our on-going operating performance. | | | | |
| | | | | | | | | | | |
| These non-GAAP financial measures are not intended as substitutes for and should not be considered superior to measures of financial performance prepared in accordance with GAAP. In addition, the Company's use of these non-GAAP financial measures may be different from similarly named measures used by other companies, limiting their usefulness for comparison purposes. | |
| | | | | | | | | | | |
We review these non-GAAP financial measures as internal measures to evaluate our performance at a consolidated level and at a segment level and manage our operations. We believe that these measures are useful performance measures which are used by us to facilitate a comparison of our on-going operating performance on a consistent basis from period-to-period. We believe that these non-GAAP financial measures provide 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 and Adjusted EBITDA by Segment, 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. Management also uses Adjusted EBITDA by Segment to determine segment capital allocations. We believe that the inclusion of Adjusted Earnings, Adjusted EBITDA, and Adjusted EBITDA by Segment results provides investors useful and important information regarding our operating results, in a manner that is consistent with management’s evaluation of business performance. We believe that Free Cash Flow provides useful additional information concerning cash flow available to meet future debt service obligations and working capital requirements and assists investors in their understanding of our operating profitability and liquidity as we manage the business to maximize margin and cash flow. | |
| | | | | | | | | | | |
| The Company urges investors to carefully review the GAAP financial information included as part of the Company’s Form 10-K dated April 29, 2023 filed with the SEC on July 31, 2023, which includes consolidated financial statements for each of the three years for the period ended April 29, 2023, April 30, 2022, and May 1, 2021 (Fiscal 2023, Fiscal 2022, and Fiscal 2021, respectively). | |
| | | | |
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.
| | |
| Investor Contact: |
| Hunter Blankenbaker |
| Vice President |
| Corporate Communications and Investor Relations |
| 908-991-2776 |
| hblankenbaker@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: 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 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 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 strategic objectives, successful integration, anticipated synergies, and/or other expected potential benefits of various strategic and restructuring initiatives, may not be fully realized or may take longer than expected; dependency on strategic partnerships, such as with VitalSource Technologies, Inc. and the Fanatics Retail Group Fulfillment, LLC, Inc. (“Fanatics”) and Fanatics Lids College, Inc. D/B/A "Lids" (“Lids”) (collectively referred to herein as the “F/L Partnership”), and the potential for adverse operational and financial changes to these partnerships, may adversely impact our business; non-renewal of managed bookstore, physical and/or online store contracts and higher-than-anticipated store closings; decisions by 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 data privacy, information security and 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 web 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 and other business 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 domestic and international laws or regulations, including U.S. tax reform, changes in tax rates, laws and regulations, as well as related guidance; enactment of laws or changes in enforcement practices which may restrict or prohibit our use of 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 Form 10-K for the year-ended April 29, 2023. 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.
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Sep. 06, 2023 |
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