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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________
FORM 10-Q
_______________________________________________
(Mark One)
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 28, 2023
OR
¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                     to                     
Commission File Number: 1-37499
_______________________________________________
BARNES & NOBLE EDUCATION, INC.
(Exact Name of Registrant as Specified in Its Charter)
_______________________________________________
Delaware46-0599018
(State or Other Jurisdiction of
Incorporation or Organization)		(I.R.S. Employer
Identification No.)
120 Mountain View Blvd., Basking Ridge,NJ07920
(Address of Principal Executive Offices)(Zip Code)
(Registrant’s Telephone Number, Including Area Code): (908) 991-2665
Securities registered pursuant to Section 12(b) of the Act:
Title of ClassTrading SymbolName of Exchange on which registered
Common Stock, $0.01 par value per shareBNEDNew York Stock Exchange
_______________________________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer¨Accelerated filerx
Non-accelerated filer
¨  
Smaller reporting company¨
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. ¨ 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x
As of December 1, 2023, 53,149,504 shares of Common Stock, par value $0.01 per share, were outstanding.

BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Fiscal Quarter Ended October 28, 2023
Index to Form 10-Q
 
   Page No.
2
PART I - FINANCIAL INFORMATION
 
Item 1:    Financial Statements

BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited) 

13 weeks ended26 weeks ended
October 28,
2023		October 29,
2022		October 28,
2023		October 29,
2022
Sales:
Product sales and other$569,698 $567,299 $822,348 $811,061 
Rental income40,681 41,334 52,192 52,246 
Total sales610,379 608,633 874,540 863,307 
Cost of sales (exclusive of depreciation and amortization expense):
Product and other cost of sales451,953 447,551 658,967 639,955 
Rental cost of sales22,184 22,941 28,697 29,206 
Total cost of sales474,137 470,492 687,664 669,161 
Gross profit136,242 138,141 186,876 194,146 
Selling and administrative expenses85,961 98,954 163,437 189,295 
Depreciation and amortization expense10,175 10,256 20,428 21,152 
Restructuring and other charges4,274 260 8,907 635 
Operating income (loss)35,832 28,671 (5,896)(16,936)
Interest expense, net10,664 4,886 18,918 8,754 
Income (loss) from continuing operations before income taxes25,168 23,785 (24,814)(25,690)
Income tax expense (benefit) 314 (383)303 464 
Income (loss) from continuing operations$24,854 $24,168 $(25,117)$(26,154)
Loss from discontinued operations, net of tax of $0, $83, $20, and $169, respectively
$(674)$(2,024)$(1,091)$(4,409)
Net income (loss)$24,180 $22,144 $(26,208)$(30,563)
Earnings (loss) per share of common stock:
Basic:
Continuing operations$0.47 $0.46 $(0.48)$(0.50)
Discontinued operations$(0.01)$(0.04)$(0.02)$(0.08)
Total Basic Earnings per share$0.46 $0.42 $(0.50)$(0.58)
Weighted average common shares outstanding - Basic52,791 52,438 52,716 52,305 
Diluted:
Continuing operations$0.47 $0.46 $(0.48)$(0.50)
Discontinued operations$(0.01)$(0.04)$(0.02)$(0.08)
Total Diluted Earnings per share$0.46 $0.42 $(0.50)$(0.58)
Weighted average common shares outstanding - Diluted52,870 53,195 52,716 52,305 
See accompanying notes to condensed consolidated financial statements.
3
BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except per share data) 

October 28,
2023		October 29,
2022		April 29,
2023
 (unaudited)(unaudited)(audited)
ASSETS
Current assets:
Cash and cash equivalents$15,008 $17,296 $14,219 
Receivables, net221,805 209,288 92,512 
Merchandise inventories, net364,292 371,570 322,979 
Textbook rental inventories51,840 49,355 30,349 
Prepaid expenses and other current assets63,410 51,520 49,512 
Assets held for sale, current— 30,558 27,430 
Total current assets716,355 729,587 537,001 
Property and equipment, net61,403 75,475 68,153 
Operating lease right-of-use assets246,531 291,704 246,972 
Intangible assets, net104,026 120,533 110,632 
Deferred tax assets, net— — 132 
Other noncurrent assets16,664 21,100 17,889 
Total assets$1,144,979 $1,238,399 $980,779 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable$385,895 $326,007 $267,923 
Accrued liabilities112,075 113,628 85,759 
Current operating lease liabilities126,426 130,802 99,980 
Liabilities held for sale— 5,243 8,423 
Total current liabilities624,396 575,680 462,085 
Long-term deferred taxes, net1,936 1,430 1,970 
Long-term operating lease liabilities160,185 190,758 184,754 
Other long-term liabilities18,625 19,622 19,068 
Long-term borrowings233,873 250,445 182,151 
Total liabilities1,039,015 1,037,935 850,028 
Commitments and contingencies— — — 
Stockholders' equity:
Preferred stock, $0.01 par value; authorized, 5,000 shares; 0 shares issued and 0 shares outstanding
— — — 
Common stock, $0.01 par value; authorized, 200,000 shares; issued, 55,818, 55,132 and 55,140 shares, respectively; outstanding, 53,137, 52,599 and 52,604 shares, respectively
558 551 551 
Additional paid-in capital747,518 744,339 745,932 
Accumulated deficit(619,564)(522,057)(593,356)
Treasury stock, at cost(22,548)(22,369)(22,376)
Total stockholders' equity105,964 200,464 130,751 
Total liabilities and stockholders' equity$1,144,979 $1,238,399 $980,779 
See accompanying notes to condensed consolidated financial statements.
4
BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands) (unaudited)
 
26 weeks ended
October 28,
2023		October 29,
2022
Cash flows from operating activities:
Net loss$(26,208)$(30,563)
Less: Loss from discontinued operations, net of tax(1,091)(4,409)
Loss from continuing operations(25,117)(26,154)
Adjustments to reconcile net loss from continuing operations to net cash flows from operating activities from continuing operations:
Depreciation and amortization expense20,428 21,152 
Content amortization expense— 26 
Amortization of deferred financing costs4,406 1,200 
Deferred taxes97 — 
Stock-based compensation expense1,756 3,066 
Non-cash interest expense (paid-in-kind)
863 — 
Changes in operating lease right-of-use assets and liabilities1,826 (298)
Changes in other long-term assets and liabilities, net(2,311)265 
Changes in other operating assets and liabilities, net
Receivables, net(129,293)(73,287)
Merchandise inventories(41,313)(77,716)
Textbook rental inventories(21,491)(19,743)
Prepaid expenses and other current assets2,756 13,149 
Accounts payable and accrued liabilities140,233 168,413 
Changes in other operating assets and liabilities, net(49,108)10,816 
Net cash flows (used in) provided by operating activities from continuing operations(47,160)10,073 
Net cash flows used in operating activities from discontinued operations(3,939)(703)
Net cash flow (used in) provided by operating activities$(51,099)$9,370 
Cash flows from investing activities:
Purchases of property and equipment$(8,196)$(16,823)
Net change in other noncurrent assets78 255 
Net cash flows used in investing activities from continuing operations(8,118)(16,568)
Net cash flows provided by (used in) investing activities from discontinued operations21,395 (3,750)
Net cash flow provided by (used in) investing activities$13,277 $(20,318)
Cash flows from financing activities:
Proceeds from borrowings$284,698 $348,200 
Repayments of borrowings(233,970)(321,900)
Payment of deferred financing costs(9,381)(1,716)
Purchase of treasury shares(172)(857)
Net cash flows provided by financing activities from continuing operations41,175 23,727 
Net cash flows provided by financing activities from discontinued operations— — 
Net cash flows provided by financing activities$41,175 $23,727 
Net increase in cash, cash equivalents and restricted cash3,353 12,779 
Cash, cash equivalents and restricted cash at beginning of period31,988 21,036 
5
Cash, cash equivalents and restricted cash at end of period35,341 33,815 
Less: Cash, cash equivalents and restricted cash of discontinued operations at end of period— (929)
Cash, cash equivalents, and restricted cash of continuing operations at end of period$35,341 $32,886 
See accompanying notes to condensed consolidated financial statements.

6
BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Equity
(In thousands) (unaudited)

Additional
Common StockPaid-InAccumulatedTreasury StockTotal
SharesAmountCapitalDeficitSharesAmountEquity
Balance at April 30, 202254,234 $542 $740,838 $(491,494)2,188 $(21,512)$228,374 
Stock-based compensation expense
1,791 1,791 
Vested equity awards
540 5 (5)— 
Shares repurchased for tax withholdings for vested stock awards
238 (612)(612)
Net loss(52,707)(52,707)
Balance July 30, 202254,774 $547 $742,624 $(544,201)2,426 $(22,124)$176,846 
Stock-based compensation expense
1,719 1,719 
Vested equity awards
357 4 (4)— 
Shares repurchased for tax withholdings for vested stock awards
107 (245)(245)
Net income22,144 22,144 
Balance October 29, 202255,131 $551 $744,339 $(522,057)2,533 $(22,369)$200,464 
Additional
Common StockPaid-InAccumulatedTreasury StockTotal
SharesAmountCapitalDeficitSharesAmountEquity
Balance at April 29, 202355,140 $551 $745,932 $(593,356)2,536 $(22,376)$130,751 
Stock-based compensation expense
794 794 
Vested equity awards
179 2 (2)— 
Shares repurchased for tax withholdings for vested stock awards
78 (98)(98)
Net loss(50,388)(50,388)
Balance July 29, 202355,319 $553 $746,724 $(643,744)2,614 $(22,474)$81,059 
Stock-based compensation expense
799 799 
Vested equity awards
499 5 (5)— 
Shares repurchased for tax withholdings for vested stock awards
67 (74)(74)
Net income24,180 24,180 
Balance October 28, 202355,818 $558 $747,518 $(619,564)2,681 $(22,548)$105,964 

See accompanying notes to condensed consolidated financial statements.
7
BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
For the 13 and 26 weeks ended October 28, 2023 and October 29, 2022
(Thousands of dollars, except share and per share data)
(unaudited)
Unless the context otherwise indicates, references in these Notes to the accompanying condensed consolidated financial statements to “we,” “us,” “our” and “the Company” refer to Barnes & Noble Education or "BNED", Inc., a Delaware corporation. References to “Barnes & Noble College” refer to our college bookstore business operated through our subsidiary Barnes & Noble College Booksellers, LLC. References to “MBS” refer to our virtual bookstore and wholesale textbook distribution business operated through our subsidiary MBS Textbook Exchange, LLC.
This Form 10-Q should be read in conjunction with our Audited Consolidated Financial Statements and accompanying Notes to consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended April 29, 2023, which includes consolidated financial statements for the Company as of April 29, 2023, and April 30, 2022 and for each of the three fiscal years ended April 29, 2023, April 30, 2022 and May 1, 2021 ("Fiscal 2023," "Fiscal 2022" and "Fiscal 2021", respectively) and the unaudited condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the quarter ended July 29, 2023.
Note 1. Organization
Description of Business
Barnes & Noble Education, Inc. (“BNED”) is one of the largest contract operators of physical and virtual bookstores for college and university campuses and K-12 institutions across the United States. We are also one of the largest textbook wholesalers, inventory management hardware and software providers. We operate 1,271 physical, virtual, and custom bookstores and serve more than 5.8 million students, delivering essential educational content, tools and general merchandise within a dynamic omnichannel retail environment.
The strengths of our business include our ability to compete by developing new products and solutions to meet market needs, our large operating footprint with direct access to students and faculty, our well-established, deep relationships with academic partners and stable, long-term contracts and our well-recognized brands. We provide product and service offerings designed to address the most pressing issues in higher education, including equitable access, enhanced convenience and improved affordability through innovative course material delivery models designed to drive improved student experiences and outcomes. We offer 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. During the 26 weeks ended October 28, 2023, BNC First Day total revenue increased by $72,684, or 39%, to $261,021 compared to $188,337 during the prior year period.
We expect to continue to introduce scalable and advanced solutions focused largely on the student and customer experience, expand our e-commerce capabilities and accelerate such capabilities through our merchandising and e-commerce service provider agreement with 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 Relationship”), win new accounts, and expand our revenue opportunities through strategic relationships. We expect gross general merchandise sales to increase over the long term, as our product assortments continue to emphasize and reflect changing consumer trends, and we evolve our presentation concepts and merchandising of products in stores and online, which we expect to be further enhanced and accelerated through the F/L Relationship. Through this relationship, Fanatics and Lids provide unparalleled product assortment, e-commerce capabilities and powerful digital marketing tools on our behalf to drive increased value for customers and accelerate growth of our logo general merchandise business.
The Barnes & Noble brand (licensed from our former parent) along with our subsidiary brands, BNC and MBS, are synonymous with innovation in bookselling and campus retailing, and are widely recognized and respected brands in the United States. Our large college footprint, reputation, and credibility in the marketplace not only support our marketing efforts to universities, students, and faculty, but are also important to our relationship with leading publishers who rely on us as one of their primary distribution channels.
During the fourth quarter of Fiscal 2023, assets related to our DSS Segment met the criteria for classification as Assets Held for Sale and Discontinued Operations and is no longer a reportable segment. We have two reportable segments: Retail and Wholesale. For additional information related to our strategies, operations and segments, see Part I - Item 1. Business in our Annual Report on Form 10-K for the fiscal year ended April 29, 2023.
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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
For the 13 and 26 weeks ended October 28, 2023 and October 29, 2022
(Thousands of dollars, except share and per share data)
(unaudited)

BNC First Day Equitable and Inclusive Access Programs
We provide product and service offerings designed to address the most pressing issues in higher education, including equitable access, enhanced convenience and improved affordability through innovative course material delivery models designed to drive improved student experiences and outcomes. We offer 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.
•First Day Complete is adopted by an institution and includes the majority of undergraduate classes (and on occasion graduate classes), providing students both physical and digital materials. The First Day Complete model drives substantially greater unit sales and sell-through for the bookstore.
•First Day is adopted by a faculty member for a single course, and students receive primarily digital course materials through their school's learning management system ("LMS").
Offering course materials through our equitable and inclusive access First Day Complete and First Day models is a key, and increasingly important strategic initiative of ours to meet the market demands of substantially reduced pricing to students, as well as the opportunity to improve student outcomes, while, at the same time, increasing our market share, revenue and relative gross profits of course material sales given the higher volumes of units sold in such models as compared to historical sales models that rely on individual student marketing and sales. These programs have allowed us to reverse historical long-term trends in course materials revenue declines, which have been observed at those schools where such programs have been adopted, and improve predictability of our future results. We are moving quickly and decisively to accelerate our First Day Complete strategy. We plan to move many institutions to First Day Complete in Fiscal 2024 and the majority of our schools by Fiscal 2025, with continued relative adoption of this model thereafter.
In the Fall of 2023, 157 campus stores are utilizing First Day® Complete representing enrollment of nearly 800,000 undergraduate and post graduate students (as reported by National Center for Education Statistics), an increase of approximately 47% compared to Fall of 2022. During the 26 weeks ended October 28, 2023, First Day Complete sales increased by $55,455, or 52%, to $161,934 as compared to $106,479 in the prior year period. During the 26 weeks ended October 28, 2023, First Day sales increased by $17,229, or 21%, to $99,087 as compared to $81,858 in the prior year period.
Relationship with Fanatics and Lids
In December 2020, we entered into the F/L Relationship. Under the related service provider agreements, we receive unparalleled product assortment, e-commerce capabilities and powerful digital marketing tools to drive increased value for customers and accelerate growth of our general merchandise business. Fanatics and Lids process consumer personal information on our behalf, subject to certain contractual obligations as our service providers, offering our campus stores expanded product selection, a world-class online and mobile experience, and a progressive direct-to-consumer platform. Coupled with Lids, the leading standalone brick and mortar retailer focused exclusively on licensed fan and alumni products, our campus stores have improved access to trend and sales performance data on licensees, product styles, and design treatments.
We maintain our relationships with campus partners and remain responsible for staffing and managing the day-to-day operations of our campus bookstores. We also work closely with our campus partners to ensure that each campus store maintains unique aspects of in-store merchandising, including localized product assortments and specific styles and designs that reflect each campus’s brand. As our service provider, we leverage Fanatics’ e-commerce technology and expertise on our behalf for the operational management of the emblematic merchandise and gift sections of our campus store websites. Lids manages in-store assortment planning and merchandising of emblematic apparel, headwear, and gift products for our partner campus stores, and Lids owns the inventory it manages, relieving us of the obligation to finance inventory purchases from working capital.
Note 2. Summary of Significant Accounting Policies
Basis of Presentation and Consolidation
Our condensed consolidated financial statements reflect our condensed consolidated financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States (“GAAP”). Net income (loss) is equal to comprehensive income (loss) on our condensed consolidated statement of operations. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements of the Company contain all
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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
For the 13 and 26 weeks ended October 28, 2023 and October 29, 2022
(Thousands of dollars, except share and per share data)
(unaudited)

adjustments (consisting of only normal recurring adjustments) necessary to present fairly its consolidated financial position and the results of its operations and cash flows for the periods reported. These consolidated financial statements are condensed and therefore do not include all of the information and footnotes required by GAAP. All material intercompany accounts and transactions have been eliminated in consolidation.
Our fiscal year is comprised of 52 or 53 weeks, ending on the Saturday closest to the last day of April. Due to the seasonal nature of the business, the results of operations for the 13 and 26 weeks ended October 28, 2023 are not indicative of the results expected for the 52 weeks ending April 27, 2024 ("Fiscal 2024").
Liquidity and Going Concern
The accompanying condensed consolidated financial statements are prepared in accordance with U.S. GAAP applicable to a going concern. This presentation contemplates the realization of assets and the satisfaction of liabilities in the normal course of business and does not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described below.
Pursuant to ASC 205-40, Presentation of Financial Statements — Going Concern (“ASC 205-40”), management must evaluate whether there are conditions and events, considered in aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that these condensed consolidated financial statements are issued. In accordance with ASC 205-40, management’s analysis can only include the potential mitigating impact of management’s plans that have not been fully implemented as of the issuance date of these condensed consolidated financial statements if (a) it is probable that management’s plans will be effectively implemented on a timely basis, and (b) it is probable that the plans, when implemented, will alleviate the relevant conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern.
Our primary sources of cash are net cash flows from operating activities, funds available under our Credit Agreement, Term Loan Agreement, and short-term vendor financing. Our liquidity is highly dependent on the seasonal nature of our business, particularly with respect to course material sales, as sales are generally highest in the second and third fiscal quarters, when college students generally purchase textbooks for the upcoming Fall and Spring semesters, respectively. As of October 28, 2023, we had $35,341 of cash on hand, including $20,333 of restricted cash primarily related to segregated funds for commission due to Lids for logo merchandise sales as per the merchandising service provider agreement.
Our business was significantly negatively impacted by the COVID-19 pandemic during the years ended April 30, 2022 and May 1, 2021, as many schools adjusted their learning models and on-campus activities. Although most academic institutions have since reopened after the COVID-19 pandemic, the lingering impacts of the pandemic have resulted in changes in customer behaviors, lower enrollments, and an evolving educational landscape which continued to impact our financial results during the year ended April 29, 2023. Some institutions are still providing alternatives to traditional in-person instruction, including online and hybrid learning options and significantly reduced classroom sizes. The impact of COVID-19 store closings, as well as lower earnings during the year ended April 29, 2023, resulted in the loss of cash flows and increased borrowings that we would not otherwise have expected to incur.
We recognized Net Income from Continuing Operations of $24,854 and $24,168 for the 13 weeks ended October 28, 2023 and October 29, 2022, respectively, and a Net Loss from Continuing Operations of $(25,117) and $(26,154) for the 26 weeks ended October 28, 2023 and October 29, 2022, respectively, and we incurred a Net Loss from Continuing Operations of $(90,140), $(61,559), and $(133,569) for the years ended April 29, 2023, April 30, 2022, and May 1, 2021, respectively. Our Cash Flow (Used In) Provided by Operating Activities from Continuing Operations were $(47,160) and $10,073 for the 26 weeks ended October 28, 2023 and October 29, 2022, respectively, and were $90,513, $(16,195), and $27,049, for the years ended April 29, 2023, April 30, 2022, and May 1, 2021, respectively. The tightening of our available credit commitments, including the elimination and repayment of our FILO Facility in fiscal year 2023 of $40,000, had a significant impact on our liquidity during fiscal year 2023 and fiscal year 2024, including our ability to make timely vendor payments and school commission payments.
Our losses and projected cash needs, combined with our current liquidity level, raised substantial doubt about our ability to continue as a going concern as of the year ended April 29, 2023, which Management subsequently remediated by implementing a plan to improve the Company’s liquidity and successfully alleviate substantial doubt including (1) raising additional liquidity and (2) taking additional operational restructuring actions.
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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
For the 13 and 26 weeks ended October 28, 2023 and October 29, 2022
(Thousands of dollars, except share and per share data)
(unaudited)

Debt amendments
On October 10, 2023, we amended our existing Credit Agreement to revise certain reporting requirements to the administrative agent and lenders under the Credit Agreement. The amendment introduced a Specified Liquidity Transaction Fee of $3,800 that would become due and payable at the earlier to occur of (1) January 31, 2024, to the extent a Specified Liquidity Transaction (as defined in the Credit Agreement) has not been consummated prior to such date (or such later date that is up to thirty days thereafter to the extent agreed to in writing by the Administrative Agent in its sole discretion) or (b) an Event of Default under the Credit Agreement.
On July 28, 2023, we amended our existing Credit Agreement to (i) extend the maturity date of the Credit Agreement to December 28, 2024, (ii) reduce advance rates with respect to the borrowing base by 1000 basis points on September 2, 2024 (in lieu of the reductions previously contemplated for September 2023), (iii) subject to the conditions set forth in such amendment, add a CARES Act tax refund claim to the borrowing base, from April 1, 2024 through July 31, 2024, (iv) amend the financial maintenance covenant to require Availability (as defined in the Credit Agreement) at all times greater than the greater of (x) 10% of the Aggregate Loan Cap (as defined in the Credit Agreement) and (y) (A) $32,500 minus, subject to the conditions set forth in such amendment, (B) (a) $7,500 for the period of April 1, 2024 through and including April 30, 2024, (b) $2,500 for the period of May 1, 2024 through and including May 31, 2024 and (c) $0 at all other times, (v) add a minimum Consolidated EBITDA (as defined in the Credit Agreement) financial maintenance covenant, and (vi) amend certain negative and affirmative covenants and add certain additional covenants, all as more particularly set forth in such amendment. The amendment also requires that we appoint a Chief Restructuring Officer and that, by August 11, 2023, we (i) appoint two independent members to the board of directors of the Company from prospective candidates that have been previously disclosed to the Administrative Agent and the Lenders and (ii) appoint a committee of the board of directors of the Company to consist of three board members (two of whom will be the new independent directors), and as of the date of this filing, we have satisfied such requirements. The committee’s responsibilities will include, among other things, to explore, consider, solicit expressions of interest or proposals for, respond to any communications, inquiries or proposals regarding, and advise as to all strategic alternatives to effect a “Specified Liquidity Transaction” (as defined in the Credit Agreement). There can be no guarantee or assurances that any such transaction or transactions be consummated. We must pay (i) a fee of 0.50% of the outstanding principal amount of the commitments under the Credit Agreement March 2023 amendment (as defined in the Credit Agreement) on the closing date (in lieu of the deferred fee previously contemplated in connection with the March 2023 amendment (as defined in the Credit Agreement)) and (ii) a fee of 1.00% of the outstanding principal amount of the commitments under the Credit Agreement as of the closing date on the earlier to occur of September 2, 2024 and an Event of Default (as defined in the Credit Agreement).
On July 28, 2023, we amended our Term Loan Agreement to (i) extend the maturity date of the Term Loan Agreement to April 7, 2025, (ii) allow for interest to be paid in kind until September 2, 2024, (iii) amend the 1.50% anniversary fee to recur on June 7 of each year that the Term Loan Agreement remains outstanding, with 2024 fee deferred to the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement) and (iv) amend certain negative covenants and affirmative and add certain additional covenants. We must pay a fee of $50,000 to the lenders under the Term Loan Agreement on the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement).
Operational restructuring plans
During Fiscal 2023, we implemented a significant cost reduction program designed to streamline our operations, maximize productivity and drive profitability. We reduced our workforce, eliminated duplicate administrative headcounts at all levels, implemented improved system development processes to reduce maintenance costs, reduced capital expenditures, and evaluated operating contractual obligations for cost savings. Over the last year, we have achieved annualized savings of $30,000 to $35,000 from these cost savings initiatives. Additionally, during Fiscal 2024, Management's planned to implement further cost savings measures, including reduction of gross capital expenditures, amounting to approximately $25,000, of which approximately $14,000 has been achieved during the 26 weeks ended October 28, 2023. Management believes that these plans are within its control and will be focused on implementing as outlined.
During the 13 weeks ended October 28, 2023, Net Income from Continuing Operations increased by $686 compared to the prior year period. Excluding interest expense and restructuring and other charges Net Income from Continuing Operations improved by $10,478 during the 13 weeks ended October 28, 2023 compared to the prior year period. During the 26 weeks ended October 28, 2023, Net Loss from Continuing Operations decreased by $1,037 compared to the prior year period. Excluding interest expense and restructuring and other charges Net Loss from Continuing Operations decreased by $19,473 during the 26 weeks ended October 28, 2023 compared to the prior year period. The improvements in Net Income from Continuing Operations during the 13 and 26 weeks are primarily due to operational improvements and cost savings initiatives.
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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
For the 13 and 26 weeks ended October 28, 2023 and October 29, 2022
(Thousands of dollars, except share and per share data)
(unaudited)

Management believes that the expected impact on our liquidity and cash flows resulting from the debt amendments and the operational initiatives outlined above are sufficient to enable the Company to meet its obligations for at least twelve months from the issuance date of these condensed consolidated financial statements and to continue to alleviate the conditions that initially raised substantial doubt about the Company's ability to continue as a going concern.
Seasonality
Our business is highly seasonal. Our quarterly results also may fluctuate depending on the timing of the start of the various schools' semesters, as well as shifts in our fiscal calendar dates. These shifts in timing may affect the comparability of our results across periods. Our retail business is highly seasonal, with the major portion of sales and operating profit realized during the second and third fiscal quarters, when college students generally purchase and rent textbooks for the upcoming semesters. Sales attributable to our wholesale business are generally highest in our first, second and third quarters, as it sells textbooks and other course materials for retail distribution. See Revenue Recognition and Deferred Revenue discussion below.
Use of Estimates
In preparing financial statements in conformity with GAAP, we are required to make estimates and assumptions that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
Discontinued Operations
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. All corresponding prior year periods presented in our financial statements and related information in the accompanying notes have been reclassified to reflect the Asset Held for Sale and Discontinued Operations presentation.
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 26 weeks ended October 28, 2023, we recorded a Gain on Sale of Business of $3,068 in Loss from Discontinued Operations, Net, related to the sale. Net cash proceeds from the sale were used for debt repayment and provided additional funds for working capital needs under our Credit Facility. The following table summarizes the operating results of the discontinued operations for the periods indicated:
13 weeks ended26 weeks ended
Dollars in thousandsOctober 28, 2023October 29, 2022October 28, 2023October 29, 2022
Total sales$— $8,465 $2,784 $17,649 
Cost of sales (a)
— 1,772 76 3,472 
Gross profit (a)
— 6,693 2,708 14,177 
Selling and administrative expenses643 8,131 2,924 16,277 
Depreciation and amortization3 503 3 2,140 
Gain on sale of business— — (3,068)— 
Impairment loss (non-cash) (b)
— — 610 — 
Restructuring costs (c)
10 — 3,297 — 
Transaction costs18 — 13 — 
Operating loss(674)(1,941)(1,071)(4,240)
Income tax expense— 83 20 169 
Loss from discontinued operations, net of tax$(674)$(2,024)$(1,091)$(4,409)
(a) Cost of sales and Gross margin for the DSS Segment includes amortization expense (non-cash) related to content development costs of $1,618 and $3,169 for the 13 and 26 weeks ended October 29, 2022, respectively.
(b)    During the 26 weeks ended October 28, 2023, we recognized an impairment loss (non-cash) of $610 (both pre-tax and after-tax),
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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
For the 13 and 26 weeks ended October 28, 2023 and October 29, 2022
(Thousands of dollars, except share and per share data)
(unaudited)

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 26 weeks ended October 28, 2023, we recognized restructuring and other charges of $3,297 comprised of severance and other employee termination costs.

The following table summarizes the assets and liabilities of the Assets Held for Sale included in the condensed consolidated balance sheets:
As of
April 29, 2023October 29, 2022
Cash and cash equivalents$1,057 $929 
Receivables, net480 721 
Prepaid expenses and other current assets901 2,421 
Property and equipment, net19,523 20,621 
Intangible assets, net402 954 
Goodwill4,700 4,700 
Deferred tax assets, net130 — 
Other noncurrent assets237 212 
Assets held for sale$27,430 $30,558 
Accounts payable$211 $161 
Accrued liabilities8,212 5,061 
Other long-term liabilities— 20 
Liabilities held for sale$8,423 $5,242 
Restricted Cash
As of October 28, 2023 and October 29, 2022, we had restricted cash of $20,333 and $15,590, respectively, comprised of $19,388 and $14,686, respectively, in prepaid and other current assets in the condensed consolidated balance sheet related to segregated funds for commission due to Lids for logo merchandise sales as per the Lids service provider merchandising agreement, and $945 and $904, respectively, in other noncurrent assets in the condensed consolidated balance sheet related to amounts held in trust for future distributions related to employee benefit plans.
Merchandise Inventories
Merchandise inventories, which consist of finished goods, are stated at the lower of cost or market. Market value of our inventory, which is all purchased finished goods, is determined based on its estimated net realizable value, which is generally the selling price less normally predictable costs of disposal and transportation. Reserves for non-returnable inventory are based on our history of liquidating non-returnable inventory, which includes certain significant assumptions, including markdowns, sales below cost, inventory aging and expected demand.
Cost is determined primarily by the retail inventory method for our Retail segment. Our textbook and trade book inventories, for Retail and Wholesale, are valued using the LIFO method and the related reserve was not material to the recorded amount of our inventories. There were no LIFO adjustments in Fiscal 2023, Fiscal 2022 and Fiscal 2021.
For our physical bookstores, we also estimate and accrue shortage for the period between the last physical count of inventory and the balance sheet date. Shortage rates are estimated and accrued based on historical rates and can be affected by changes in merchandise mix and changes in actual shortage trends.
The Retail Segment fulfillment order is directed first to our wholesale business before other sources of inventory are utilized. The products that we sell originate from a wide variety of domestic and international vendors. After internal sourcing, the bookstore purchases textbooks from outside suppliers and publishers.
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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
For the 13 and 26 weeks ended October 28, 2023 and October 29, 2022
(Thousands of dollars, except share and per share data)
(unaudited)

Textbook Rental Inventories
Physical textbooks out on rent are categorized as textbook rental inventories. At the time a rental transaction is consummated, the book is removed from merchandise inventories and moved to textbook rental inventories at cost. The cost of the book is amortized down to its estimated residual value over the rental period. The related amortization expense is included in cost of goods sold. At the end of the rental period, upon return, the book is removed from textbook rental inventories and recorded in merchandise inventories at its amortized cost.
Leases
We recognize lease assets and lease liabilities on the condensed consolidated balance sheet for all operating lease arrangements based on the present value of future lease payments as required by Accounting Standards Codification ("ASC") Topic 842, Leases. We do not recognize lease assets or lease liabilities for short-term leases (i.e., those with a term of twelve months or less). We recognize lease expense on a straight-line basis over the lease term for contracts with fixed lease payments, including those with fixed annual minimums, or over a rolling twelve-month period for leases where the annual guarantee resets at the start of each contract year, in order to best reflect the pattern of usage of the underlying leased asset. For additional information, see Note 8. Leases.
Revenue Recognition and Deferred Revenue
Product sales and rentals
The majority of our revenue is derived from the sale of products through our bookstore locations, including virtual bookstores, and our bookstore affiliated e-commerce websites, and contains a single performance obligation. Revenue from sales of our products is recognized at the point in time when control of the products is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for the products. For additional information, see Note 3. Revenue.
Retail product revenue is recognized when the customer takes physical possession of our products, which occurs either at the point of sale for products purchased at physical locations or upon receipt of our products by our customers for products ordered through our websites and virtual bookstores. Wholesale product revenue is recognized upon shipment of physical textbooks at which point title passes and risk of loss is transferred to the customer. Additional revenue is recognized for shipping charges billed to customers and shipping costs are accounted for as fulfillment costs within cost of goods sold.
Revenue from the sale of digital textbooks, which contains a single performance obligation, is recognized at the point of sale as product revenue in our condensed consolidated financial statements. A software feature is embedded within the content of our digital textbooks, such that upon expiration of the term the customer is no longer able to access the content. While the sale of the digital textbook allows the customer to access digital content for a fixed period of time, once the digital content is delivered to the customer, our performance obligation is complete.
Revenue from the rental of physical textbooks is deferred and recognized over the rental period based on the passage of time commencing at the point of sale, when control of the product transfers to the customer and is recognized as rental income in our condensed consolidated financial statements. Rental periods are typically for a single semester and are always less than one year in duration. We offer a buyout option to allow the purchase of a rented physical textbook at the end of the rental period if the customer desires to do so. We record the buyout purchase when the customer exercises and pays the buyout option price which is determined at the time of the buyout. In these instances, we accelerate any remaining deferred rental revenue at the point of sale.
Revenue recognized for our BNC First Day offerings is consistent with our policies outlined above for product, digital and rental sales, net of an anticipated opt-out or return provision. Given the growth of BNC First Day programs, the timing of cash collection from our school partners may shift to periods subsequent to when the revenue is recognized. When a school adopts our BNC First Day equitable and inclusive access offerings, cash collection from the school generally occurs after the institution's drop/add dates, which is later in the working capital cycle, particularly in our third quarter given the timing of the Spring Term and our quarterly reporting period, as compared to direct-to-student point-of-sale transactions where cash is generally collected during the point-of-sale transaction or within a few days from the credit card processor.
We estimate returns based on an analysis of historical experience. A provision for anticipated merchandise returns is provided through a reduction of sales and cost of goods sold in the period that the related sales are recorded.
For sales and rentals involving third-party products, we evaluate whether we are acting as a principal or an agent. Our determination is based on our evaluation of whether we control the specified goods or services prior to transferring them to the
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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
For the 13 and 26 weeks ended October 28, 2023 and October 29, 2022
(Thousands of dollars, except share and per share data)
(unaudited)

customer. There are significant judgments involved in determining whether we control the specified goods or services prior to transferring them to the customer including whether we have the ability to direct the use of the good or service and obtain substantially all of the remaining benefits from the good or service. For those transactions where we are the principal, we record revenue on a gross basis, and for those transactions where we are an agent to a third-party, we record revenue on a net basis.
As contemplated by the F/L Relationship related merchandising agreement and e-commerce agreement, logo general merchandise sales are fulfilled by Lids and Fanatics on our behalf and we recognize commission revenue earned for these sales on a net basis in our condensed consolidated financial statements.
We do not have gift card or customer loyalty programs. We do not treat any promotional offers as expenses. Sales tax collected from our customers is excluded from reported revenues. Our payment terms are generally 30 days and do not extend beyond one year.
Service and other revenue
Service and other revenue is primarily derived from brand partnership marketing services which includes promotional activities and advertisements within our physical bookstores and web properties performed on behalf of third-party customers, shipping and handling, and revenue from other programs.
Brand partnership marketing agreements often include multiple performance obligations which are individually negotiated with our customers. For these arrangements that contain distinct performance obligations, we allocate the transaction price based on the relative standalone selling price method by comparing the standalone selling price (“SSP”) of each distinct performance obligation to the total value of the contract. The revenue is recognized as each performance obligation is satisfied, typically at a point in time for brand partnership marketing service and overtime for advertising efforts as measured based upon the passage of time for contracts that are based on a stated period of time or the number of impressions delivered for contracts with a fixed number of impressions.
Cost of Sales
Our cost of sales primarily includes costs such as merchandise costs, textbook rental amortization, content development cost amortization, warehouse costs related to inventory management and order fulfillment, insurance, certain payroll costs, and management service agreement costs, including rent expense, related to our college and university contracts and other facility related expenses.
Selling and Administrative Expenses
Our selling and administrative expenses consist primarily of store payroll and store operating expenses. Selling and administrative expenses also include long-term incentive plan compensation expense and general office expenses, such as merchandising, procurement, field support, finance and accounting. Shared-service costs such as human resources, legal, treasury, information technology, and various other corporate level expenses and other governance functions, are not allocated to a specific reporting segment and are recorded in Corporate Services.
Income Taxes
The provision for income taxes includes federal, state and local income taxes currently payable and those deferred because of temporary differences between the financial statement and tax basis of assets and liabilities. The deferred tax assets and liabilities are measured using the enacted tax rates and laws that are expected to be in effect when the differences reverse. We regularly review deferred tax assets for recoverability and establish a valuation allowance, if determined to be necessary.
Recent Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This guidance will be effective for the Company for the annual report for the fiscal year ending April 26, 2025 and subsequent interim periods. Early adoption is permitted and retrospective adoption is required for all prior periods presented. We are currently assessing this guidance and determining the impact on our condensed consolidated financial statements.
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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
For the 13 and 26 weeks ended October 28, 2023 and October 29, 2022
(Thousands of dollars, except share and per share data)
(unaudited)

Note 3. Revenue
Revenue from sales of our products and services is recognized either at the point in time when control of the products is transferred to our customers or over time as services are provided in an amount that reflects the consideration we expect to be entitled to in exchange for the products or services. See Note 2. Summary of Significant Accounting Policies for additional information related to our revenue recognition policies and Note 4. Segment Reporting for a description of each segment's product and service offerings.
Disaggregation of Revenue
The following table disaggregates the revenue associated with our major product and service offerings:
13 weeks ended26 weeks ended
October 28, 2023October 29, 2022October 28, 2023October 29, 2022
Retail
Course Materials Product Sales $435,370 $416,410 $573,906 $547,262 
General Merchandise Product Sales (a)
105,022 122,648 193,702 211,472 
Service and Other Revenue (b)
18,263 18,218 24,996 24,137 
Retail Product and Other Sales sub-total558,655 557,276 792,604 782,871 
Course Materials Rental Income40,681 41,334 52,192 52,246 
Retail Total Sales$599,336 $598,610 $844,796 $835,117 
Wholesale Sales$20,973 $21,120 $59,764 $58,203 
Eliminations (c)
$(9,930)$(11,097)$(30,020)$(30,013)
Total Sales$610,379 $608,633 $874,540 $863,307 
(a)Logo general merchandise sales for the Retail Segment are recognized on a net basis as commission revenue in the condensed consolidated financial statements.
(b)Service and other revenue primarily relates to brand partnership marketing and other service revenues.
(c)The sales eliminations represent the elimination of Wholesale sales and fulfillment service fees to Retail and the elimination of Retail commissions earned from Wholesale.
Contract Liabilities
Contract liabilities represent an obligation to transfer goods or services to a customer for which we have received consideration and consists of our deferred revenue liability (deferred revenue). Deferred revenue consists of the following:
•advanced payments from customers related to textbook rental performance obligations, which are recognized ratably over the terms of the related rental period;
•unsatisfied performance obligations associated with brand partnership marketing services, which are recognized when the contracted services are provided to our brand partnership marketing customers; and
•unsatisfied performance obligations associated with the premium paid for the sale of treasury shares, which are expected to be recognized over the term of the e-commerce and merchandising contracts for Fanatics and Lids, respectively.
16

BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
For the 13 and 26 weeks ended October 28, 2023 and October 29, 2022
(Thousands of dollars, except share and per share data)
(unaudited)

The following table presents changes in deferred revenue associated with our contract liabilities:
26 weeks ended
October 28, 2023October 29, 2022
Deferred revenue at the beginning of period$15,356 $16,475 
Additions to deferred revenue during the period97,773 96,121 
Reductions to deferred revenue for revenue recognized during the period(71,164)(68,676)
Deferred revenue balance at the end of period:$41,965 $43,920 
Balance Sheet classification:
Accrued liabilities$38,105 $39,504 
Other long-term liabilities3,860 4,416 
Deferred revenue balance at the end of period:$41,965 $43,920 
As of October 28, 2023, we expect to recognize $38,105 of the deferred revenue balance within the next 12 months.
Note 4. Segment Reporting
During the fourth quarter of Fiscal 2023, assets related to our DSS Segment met the criteria for classification as Assets Held for Sale and Discontinued Operations and is no longer a reportable segment. For additional information, see Note 2. Summary of Significant Accounting Policies.
We have 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 a specific reporting segment and continue to be presented as “Corporate Services”.
We identify our segments in accordance with the way our business is managed (focusing on the financial information distributed) and the manner in which our chief operating decision maker allocates resources and assesses financial performance. The following summarizes the two segments. For additional information about each segment's operations, see Part I - Item 1. Business in our Annual Report on Form 10-K for the fiscal year ended April 29, 2023.
Retail Segment
The Retail Segment operates 1,271 college, university, and K-12 school bookstores, comprised of 717 physical bookstores and 554 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 service providers, 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.
Wholesale Segment
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 717 physical bookstores) and sources and distributes new and used textbooks to our 554 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.
17

BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
For the 13 and 26 weeks ended October 28, 2023 and October 29, 2022
(Thousands of dollars, except share and per share data)
(unaudited)

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.
Intercompany Eliminations
The eliminations are primarily related to the following intercompany activities:
•The sales eliminations represent the elimination of Wholesale sales and fulfillment service fees to Retail and the elimination of Retail commissions earned from Wholesale, and
•These cost of sales eliminations represent (i) the recognition of intercompany profit for Retail inventory that was purchased from Wholesale in a prior period that was subsequently sold to external customers during the current period and the elimination of Wholesale service fees charged for fulfillment of inventory for virtual store sales, net of (ii) the elimination of intercompany profit for Wholesale inventory purchases by Retail that remain in ending inventory at the end of the current period.
Our international operations are not material, and the majority of the revenue and total assets are within the United States.

18

BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
For the 13 and 26 weeks ended October 28, 2023 and October 29, 2022
(Thousands of dollars, except share and per share data)
(unaudited)

Summarized financial information for our reportable segments is reported below:
13 weeks ended26 weeks ended
October 28, 2023October 29, 2022October 28, 2023October 29, 2022
Sales
Retail$599,336 $598,610 $844,796 $835,117 
Wholesale20,973 21,120 59,764 58,203 
Eliminations(9,930)(11,097)(30,020)(30,013)
Total Sales$610,379 $608,633 $874,540 $863,307 
Gross Profit
Retail$125,529 $129,502 $175,820 $183,495 
Wholesale6,090 5,455 11,884 12,354 
Eliminations4,623 3,184 (828)(1,703)
Total Gross Profit$136,242 $138,141 $186,876 $194,146 
Selling and Administrative Expenses
Retail$77,182 $90,086 $146,355 $169,090 
Wholesale3,492 3,867 6,880 7,998 
Corporate Services5,287 5,075 10,205 12,289 
Eliminations— (74)(3)(82)
Total Selling and Administrative Expenses$85,961 $98,954 $163,437 $189,295 
Depreciation and Amortization
Retail$8,911 $8,869 $17,877 $18,398 
Wholesale1,254 1,370 2,531 2,719 
Corporate Services10 17 20 35 
Total Depreciation and Amortization$10,175 $10,256 $20,428 $21,152 
Restructuring and Other Charges
Retail$29 $— $555 $— 
Wholesale— — 526 — 
Corporate Services4,245 260 7,826 635 
Total Restructuring and Other Charges$4,274 $260 $8,907 $635 
Operating Income (Loss)
Retail$39,407 $30,547 $11,033 $(3,993)
Wholesale1,344 218 1,947 1,637 
Corporate Services(9,542)(5,352)(18,051)(12,959)
Elimination 4,623 3,258 (825)(1,621)
Total Operating Income (Loss)$35,832 $28,671 $(5,896)$(16,936)
Interest Expense, net$10,664 $4,886 $18,918 $8,754 
Total Income (Loss) from Continuing Operations Before Income Taxes$25,168 $23,785 $(24,814)$(25,690)

19

BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
For the 13 and 26 weeks ended October 28, 2023 and October 29, 2022
(Thousands of dollars, except share and per share data)
(unaudited)

Note 5. Equity and Earnings Per Share
Equity
Share Repurchases
During the 13 and 26 weeks ended October 28, 2023, we did not repurchase shares of our Common Stock under the stock repurchase program and as of October 28, 2023, approximately $26,669 remains available under the stock repurchase program.
During the 13 and 26 weeks ended October 28, 2023, we repurchased 66,852 and 144,750 shares of our Common Stock, respectively, outside of the stock repurchase program in connection with employee tax withholding obligations for vested stock awards.
Earnings Per Share
Basic EPS is computed based upon the weighted average number of common shares outstanding for the year. Diluted EPS is computed based upon the weighted average number of common shares outstanding for the year plus the dilutive effect of common stock equivalents using the treasury stock method and the average market price of our common stock for the year. We include participating securities (unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents) in the computation of EPS pursuant to the two-class method. Our participating securities consist solely of unvested restricted stock awards, which have contractual participation rights equivalent to those of stockholders of unrestricted common stock. The two-class method of computing earnings per share is an allocation method that calculates earnings per share for common stock and participating securities. During periods of net loss, no effect is given to the participating securities because they do not share in the losses of the Company. During the 13 weeks ended October 28, 2023 and October 29, 2022, average shares of 3,149,756 and 3,153,516 were excluded from the diluted earnings per share calculation as their inclusion would have been antidilutive, respectively. During the 26 weeks ended October 28, 2023 and October 29, 2022, average shares of 3,453,892 and 4,898,303 were excluded from the diluted earnings per share calculation as their inclusion would have been antidilutive, respectively. The following is a reconciliation of the basic and diluted earnings per share calculation:
20

BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
For the 13 and 26 weeks ended October 28, 2023 and October 29, 2022
(Thousands of dollars, except share and per share data)
(unaudited)

13 weeks ended26 weeks ended
(shares in thousands)October 28, 2023October 29, 2022October 28, 2023October 29, 2022
Numerator for basic earnings per share:
Net income (loss) from continuing operations$24,854 $24,168 $(25,117)$(26,154)
Less allocation of earnings to participating securities(3)(11)— — 
Net income (loss) from continuing operations available to common shareholders$24,851 $24,157 $(25,117)$(26,154)
Loss from discontinued operations, net of tax
(674)(2,024)(1,091)(4,409)
Net income (loss) available to common shareholders$24,177 $22,133 $(26,208)$(30,563)
Numerator for diluted earnings per share:
Net income (loss) from continuing operations$24,851 $24,157 $(25,117)$(26,154)
Allocation of earnings to participating securities3 11 — — 
Less diluted allocation of earnings to participating securities(3)(11)— — 
Net income (loss) from continuing operations available to common shareholders$24,851 $24,157 $(25,117)$(26,154)
Loss from discontinued operations, net of tax
(674)(2,024)(1,091)(4,409)
Net income (loss) available to common shareholders$24,177 $22,133 $(26,208)$(30,563)
Denominator for basic earnings per share:
Basic weighted average shares of Common Stock52,791 52,438 52,716 52,305 
Denominator for diluted earnings per share:
Basic weighted average shares of Common Stock52,791 52,438 52,716 52,305 
Average dilutive restricted stock units74 141 — — 
Average dilutive restricted shares5 10 — — 
Average dilutive stock options— 606 — — 
Diluted weighted average shares of Common Stock 52,870 53,195 52,716 52,305 
Earnings (Loss) per share of Common Stock:
Basic
Continuing operations$0.47 $0.46 $(0.48)$(0.50)
Discontinuing operations(0.01)(0.04)(0.02)(0.08)
Total Basic Earnings per share$0.46 $0.42 $(0.50)$(0.58)
Diluted
Continuing operations$0.47 $0.46 $(0.48)$(0.50)
Discontinuing operations(0.01)(0.04)(0.02)(0.08)
Total Diluted Earnings per share$0.46 $0.42 $(0.50)$(0.58)
 
Note 6. Fair Value Measurements
In accordance with ASC No. 820, Fair Value Measurements and Disclosures, the fair value of an asset is considered to be the price at which the asset could be sold in an orderly transaction between unrelated knowledgeable and willing parties. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. Assets and liabilities recorded at fair value are measured using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:
21

BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
For the 13 and 26 weeks ended October 28, 2023 and October 29, 2022
(Thousands of dollars, except share and per share data)
(unaudited)

Level 1—Observable inputs that reflect quoted prices in active markets
Level 2—Inputs other than quoted prices in active markets that are either directly or indirectly observable
Level 3—Unobservable inputs in which little or no market data exists, therefore requiring us to develop our own assumptions
Our financial instruments include cash and cash equivalents, receivables, accrued liabilities and accounts payable. The fair value of cash and cash equivalents, receivables, accrued liabilities and accounts payable approximates their carrying values because of the short-term nature of these instruments, which are all considered Level 1. The fair value of short-term and long-term debt approximates its carrying value.
Non-Financial Assets and Liabilities
Our non-financial assets include property and equipment, operating lease right-of-use assets, and intangible assets. Such assets are reported at their carrying values and are not subject to recurring fair value measurements. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with ASC 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets.
Other Non-Financial Liabilities
We granted phantom share units as long-term incentive awards which are settled in cash based on the fair market value of a share of common stock of the Company at each vesting date. The fair value of the liability for the cash-settled phantom share unit awards will be remeasured at the end of each reporting period through settlement to reflect current risk-free rate and volatility assumptions. As of October 28, 2023, we recorded a liability of $32 (Level 2 input) which is reflected in accrued liabilities on the condensed consolidated balance sheet. As of October 29, 2022, we recorded a liability of $1,398 (Level 2 input) which is reflected in accrued liabilities ($1,318) and other long-term liabilities ($80) on the condensed consolidated balance sheet. For additional information, see Note 10. Long-Term Incentive Plan Compensation Expense.
Note 7. Debt
As of
Maturity Date
October 28, 2023October 29, 2022
Credit FacilityDecember 28, 2024$204,881 $222,000 
Term LoanApril 7, 202530,863 30,000 
sub-total235,744 252,000 
Less: Deferred financing costs(1,871)(1,555)
Total debt$233,873 $250,445 
Balance Sheet classification:
Short-term borrowings$— $— 
Long-term borrowings233,873 250,445 
Total debt$233,873 $250,445 
Credit Facility
We have a credit agreement (the “Credit Agreement”), amended from time to time including on October 10, 2023, July 28, 2023, May 24, 2023, March 8, 2023, March 31, 2021 and March 1, 2019, under which the lenders originally committed to provide us with a 5 year asset-backed revolving credit facility in an aggregate committed principal amount of $400,000 (the “Credit Facility”) effective from the March 1, 2019 amendment. We had the option to request an increase in commitments under the Credit Facility of up to $100,000, subject to certain restrictions. Proceeds from the Credit Facility are used for general corporate purposes, including seasonal working capital needs. The agreement included an incremental first in, last out seasonal loan facility (the “FILO Facility”) for a $100,000 maintaining the maximum availability under the Credit Agreement at $500,000. As of July 31, 2022, the FILO Facility was repaid and eliminated according to its terms and future commitments under the FILO Facility were reduced to $0.
22

BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
For the 13 and 26 weeks ended October 28, 2023 and October 29, 2022
(Thousands of dollars, except share and per share data)
(unaudited)

March 2023 Credit Agreement Amendment
On March 8, 2023, we amended our existing Credit Agreement to (i) extend the maturity date of the Credit Agreement by six months to August 29, 2024, (ii) reduce the commitments under the Credit Agreement by $20,000 to $380,000, (iii) increase the applicable margin with respect to the interest rate under the Credit Agreement to 3.375% per annum, in the case of interest accruing based on a Secured Overnight Financing Rate, and 2.375%, in the case of interest accruing based on an alternative base rate, in each case, without regard to a pricing grid, (iv) reduce advance rates with respect to the borrowing base (x) by 500 basis points upon the achievement of certain liquidity events, which may include a sale of equity interests or of assets (a “Specified Event”), or, if such a Specified Event shall not have occurred, on May 31, 2023 (see discussion below) and (y) by an additional 500 basis points on September 29, 2023, (v) amend certain negative covenants and add certain additional covenants, (vi) amend the financial maintenance covenant to require Availability (as defined in the Credit Agreement) to be at all times greater than the greater of 10% of the Aggregate Loan Cap (as defined in the Credit Agreement) and $32,500 and (vii) require repayment of the loans under the Credit Agreement upon a Specified Event. For additional information related to the Credit Agreement amendment, see the Company’s Report on Form 8-K dated March 8, 2023 and filed with the SEC on March 9, 2023.
As noted above, the amendment requires the achievement of a Special Event by no later than May 31, 2023 (as such date may be extended pursuant to the terms of the Credit Agreement). See Note 2. Summary of Significant Accounting Policies for information related to the sale of our DSS segment on May 31, 2023.
We paid a fee of 0.25% of the outstanding principal amount of the commitments under the Credit Agreement on the amendment closing date and we will pay an additional fee of 1.00% of the outstanding principal amount of the commitments under the Credit Agreement on September 29, 2023.
During the 52 weeks ended April 29, 2023, we incurred debt issuance costs totaling $4,081 related to the March 2023 Credit Agreement amendment. The debt issuance costs have been deferred and are presented as prepaid and other current assets and other noncurrent assets in the condensed consolidated balance sheets, and subsequently amortized ratably over the term of the credit agreement.
May 2023 Credit Agreement Amendment
On May 24, 2023, we amended our existing Credit Agreement to (i) increase the applicable margin with respect to the interest rate under the Credit Agreement to 3.75% per annum, in the case of interest accruing based on SOFR, and 2.75%, in the case of interest accruing based on an alternative base rate, in each case, without regard to a pricing grid, (ii) defer the reduction of advance rates used to calculate our borrowing capacity by an amount equal to 500 basis points previously required on May 31, 2023 to September 1, 2023, (iii) require cash flow reporting and variance testing commencing June 3, 2023 and (iv) defer partial prepayment of the term loan from the DSS segment sale proceeds to September 1, 2023. We did not incur debt issuance costs related to the May 2023 Credit Agreement amendment. For additional information related to the Credit Agreement amendment, see the Company’s Report on Form 8-K dated May 24, 2023 and filed with the SEC on May 31, 2023.
July 2023 Credit Agreement Amendment
On July 28, 2023, we amended our existing Credit Agreement to (i) extend the maturity date of the Credit Agreement to December 28, 2024, (ii) reduce advance rates with respect to the borrowing base by 1000 basis points on September 2, 2024 (in lieu of the reductions previously contemplated for September 2023), (iii) subject to the conditions set forth in such amendment, add a CARES Act tax refund claim to the borrowing base, from April 1, 2024 through July 31, 2024, (iv) amend the financial maintenance covenant to require Availability (as defined in the Credit Agreement) at all times greater than the greater of (x) 10% of the Aggregate Loan Cap (as defined in the Credit Agreement) and (y) (A) $32,500 minus, subject to the conditions set forth in such amendment, (B) (a) $7,500 for the period of April 1, 2024 through and including April 30, 2024, (b) $2,500 for the period of May 1, 2024 through and including May 31, 2024 and (c) $0 at all other times, (v) add a minimum Consolidated EBITDA (as defined in the Credit Agreement) financial maintenance covenant, and (vi) amend certain negative and affirmative covenants and add certain additional covenants, all as more particularly set forth in such amendment. The amendment also requires that we appoint a Chief Restructuring Officer and that, by August 11, 2023, we (i) appoint two independent members to the board of directors of the Company from prospective candidates that have been previously disclosed to the Administrative Agent and the Lenders and (ii) appoint a committee of the board of directors of the Company to consist of three board members (two of whom will be the new independent directors). The committee’s responsibilities will include, among other things, to explore, consider, solicit expressions of interest or proposals for, respond to any communications, inquiries or proposals regarding, and advise as to all strategic alternatives to effect a “Specified Liquidity Transaction” (as defined in the Credit
23

BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
For the 13 and 26 weeks ended October 28, 2023 and October 29, 2022
(Thousands of dollars, except share and per share data)
(unaudited)

Agreement). There can be no guarantee or assurances that any such transaction or transactions be consummated. We must pay (i) a fee of 0.50% of the outstanding principal amount of the commitments under the Credit Agreement March 2023 amendment (as defined in the Credit Agreement) on the closing date (in lieu of the deferred fee previously contemplated in connection with the March 2023 amendment (as defined in the Credit Agreement)) and (ii) a fee of 1.00% of the outstanding principal amount of the commitments under the Credit Agreement as of the closing date on the earlier to occur of September 2, 2024 and an Event of Default (as defined in the Credit Agreement). For additional information related to the Credit Agreement amendment, see the Company's Report on Form 8-K filed with the SEC on July 28, 2023.
During the 26 weeks ended October 28, 2023, we incurred debt issuance costs totaling $11,516 related to the July 2023 Credit Agreement amendment. The debt issuance costs have been deferred and are presented as prepaid and other current assets and other noncurrent assets in the condensed consolidated balance sheets, and subsequently amortized ratably over the term of the credit agreement.
October 2023 Credit Agreement Amendment
On October 10, 2023, we amended our existing Credit Agreement to revise certain reporting requirements to the administrative agent and lenders under the Credit Agreement. The amendment introduced a Specified Liquidity Transaction Fee of $3,800 that would become due and payable at the earlier to occur of (1) January 31, 2024, to the extent a Specified Liquidity Transaction (as defined in the Credit Agreement) has not been consummated prior to such date (or such later date that is up to thirty days thereafter to the extent agreed to in writing by the Administrative Agent in its sole discretion) or (b) an Event of Default under the Credit Agreement. During the 26 weeks ended October 28, 2023, we incurred debt issuance costs totaling $1,428 related to the October 2023 Credit Agreement amendment.
As of October 28, 2023, and through the date of this filing, we were in compliance with all debt covenants under the Credit Agreement.
The Credit Facility is secured by substantially all of the inventory, accounts receivable and related assets of the borrowers under the Credit Facility. This is considered an all asset lien (inclusive of proceeds from tax refunds payable to the Company and a pledge of equity from subsidiaries, exclusive of real estate).
During the 26 weeks ended October 28, 2023, we borrowed $284,698 and repaid $233,970 under the Credit Agreement, and had outstanding borrowings of $204,881 as of October 28, 2023, comprised entirely of borrowings under the Credit Facility. During the 26 weeks ended October 29, 2022, we borrowed $348,200 and repaid $321,900 under the Credit Agreement, and had outstanding borrowings of $222,000 as of October 29, 2022, comprised entirely of borrowings under the Credit Facility. As of October 28, 2023 and October 29, 2022, we have issued $575 and $4,759, respectively, in letters of credit under the Credit Facility.
Term Loan
On June 7, 2022, we entered into a Term Loan Credit Agreement (the “Term Loan Credit Agreement”) with TopLids LendCo, LLC and Vital Fundco, LLC and we entered into an amendment to our existing Credit Agreement, which permitted us to incur the Term Loan Facility (as defined below). For additional information, see the Company’s Report on Form 8-K dated June 7, 2022 and filed with the SEC on June 10, 2022.
The Term Loan Credit Agreement provides for term loans in an amount equal to $30,000 (the “Term Loan Facility” and, the loans thereunder, the “Term Loans”) and matures on April 7, 2025. The proceeds of the Term Loans are being used to finance working capital, and to pay fees and expenses related to the Term Loan Facility. During the 26 weeks ended October 28, 2023, we incurred $863 for interest in kind on the Term Loans and repaid $0 under the Term Loan Credit Agreement, with $30,863 of outstanding borrowings as of October 28, 2023. During the 26 weeks ended October 29, 2022, we borrowed $30,000 and repaid $0 under the Term Loan Credit Agreement.
March 2023 Term Loan Credit Agreement Amendment
On March 8, 2023, we amended the Term Loan Credit Agreement to (i) extend the maturity date of the Term Loan Credit Agreement by six months to December 7, 2024, (ii) permit the application of certain proceeds to the repayment of the loans under Credit Agreement and (iii) amend certain negative covenants and add certain additional covenants to conform to the Credit Agreement. In addition, the amendment requires the achievement of a Specified Event (as described above) by no later than May 31, 2023 (as such date may be extended under the Credit Agreement, but no later than August 31, 2023 without
24

BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
For the 13 and 26 weeks ended October 28, 2023 and October 29, 2022
(Thousands of dollars, except share and per share data)
(unaudited)

consent from lenders under the Term Loan Credit Agreement). For additional information, see the Company's Report on Form 8-K dated March 8, 2023 and filed with the SEC on March 9, 2023.
During the 52 weeks ended April 29, 2023, we incurred debt issuance costs totaling $431 related to the March 2023 Term Loan Credit Agreement amendment. We paid a fee of $50 on the amendment closing date to the lenders under the Term Loan Credit Agreement. The debt issuance costs have been deferred and are presented as prepaid and other current assets and other noncurrent assets in the condensed consolidated balance sheets, and subsequently amortized ratably over the term of the credit agreement.
July 2023 Term Loan Credit Agreement Amendment
On July 28, 2023, we amended our Term Loan to (i) extend the maturity date of the Term Loan Agreement to April 7, 2025, (ii) allow for interest to be paid in kind until September 2, 2024, (iii) amend the 1.50% anniversary fee to recur on June 7 of each year that the Term Loan Agreement remains outstanding, with 2024 fee deferred to the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement) and (iv) amend certain negative covenants and affirmative and add certain additional covenants. We must pay a fee of $50 to the lenders under the Term Loan Agreement on the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement). For additional information, see the Company's Report on Form 8-K filed with the SEC on July 28, 2023.
During the 26 weeks ended October 28, 2023, we incurred debt issuance costs totaling $480 related to the July 2023 Term Loan Credit Agreement amendment. The debt issuance costs have been deferred and are presented as a reduction to long-term borrowings in the condensed consolidated balance sheets, and subsequently amortized ratably over the term of the Term Loan Facility.
The Term Loans accrue interest at a rate equal to 11.25%, payable quarterly. All interest on the Term Loan prior to the July 29, 2023 was paid in cash. During the 13 weeks ended October 28, 2023, all interest on the Term Loan was incurred in kind as permitted under the July 2023 Term Loan Amendment. The Term Loans do not amortize prior to maturity.
The Term Loan Credit Agreement does not contain a financial covenant, but otherwise contains representations and warranties, covenants and events of default that are substantially the same as those in the Credit Agreement, including restrictions on the ability of the Company and its subsidiaries to incur additional debt, incur or permit liens on assets, make investments and acquisitions, consolidate or merge with any other company, engage in asset sales and make dividends and distributions. The Term Loan Facility is secured by second-priority liens on all assets securing the obligations under the Credit Agreement, which is all of the assets of the Company and the Guarantors, subject to customary exclusions and limitations set forth in the Term Loan Credit Agreement and the other loan documents executed in connection therewith.
The Credit Agreement amendment permitted us to incur the Term Loan Facility and also provides that, upon repayment of the Term Loan Credit Agreement (and, if applicable, any replacement credit facility thereof), we may incur second lien secured debt in an aggregate principal amount not to exceed $75,000.
Interest Expense
During the 13 weeks ended October 28, 2023 and October 29, 2022, we recognized interest expense of $10,664 and $4,886, respectively, and during the 26 weeks ended October 28, 2023 and October 29, 2022, we recognized interest expense of $18,918 and $8,754, respectively. Cash interest paid during the 26 weeks ended October 28, 2023 and October 29, 2022 was $13,972 and $7,301, respectively.
Note 8. Leases
We recognize lease assets and lease liabilities on the condensed consolidated balance sheets for substantially all lease arrangements as required by FASB ASC 842, Leases (Topic 842). Our portfolio of leases consists of operating leases comprised of operations agreements which grant us the right to operate on-campus bookstores at colleges and universities; real estate leases for office and warehouse operations; and vehicle leases. We do not have finance leases or short-term leases (i.e., those with a term of twelve months or less).
We recognize a right of use ("ROU") asset and lease liability in our condensed consolidated balance sheets for leases with a term greater than twelve months. Options to extend or terminate a lease are included in the determination of the ROU asset and lease liability when it is reasonably certain that such options will be exercised. Our lease terms generally range from one year to fifteen years and a number of agreements contain minimum annual guarantees, many of which are adjusted at the start of each contract year based on the actual sales activity of the leased premises for the most recently completed contract year.
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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
For the 13 and 26 weeks ended October 28, 2023 and October 29, 2022
(Thousands of dollars, except share and per share data)
(unaudited)

Payment terms are based on the fixed rates explicit in the lease, including minimum annual guarantees, and/or variable rates based on: i) a percentage of revenues or sales arising at the relevant premises ("variable commissions"), and/or ii) operating expenses, such as common area charges, real estate taxes and insurance. For contracts with fixed lease payments, including those with minimum annual guarantees, we recognize lease expense on a straight-line basis over the lease term or over the contract year in order to best reflect the pattern of usage of the underlying leased asset and our minimum obligations arising from these types of leases. Our lease agreements do not contain any material residual value guarantees, material restrictions or covenants.
We used our incremental borrowing rates to determine the present value of fixed lease payments based on the information available at the lease commencement date, as the rate implicit in the lease is not readily determinable. We utilized an estimated collateralized incremental borrowing rate as of the effective date or the commencement date of the lease, whichever is later.
The following table summarizes lease expense:
13 weeks ended26 weeks ended
October 28, 2023October 29, 2022October 28, 2023October 29, 2022
Variable lease expense$25,436 $25,281 $37,665 $40,465 
Operating lease expense46,902 52,998 69,291 75,860 
Net lease expense$72,338 $78,279 $106,956 $116,325 
The decrease in lease expense during the 26 weeks ended October 28, 2023 is primarily due to lower commission rates related to the shift from physical to digital course materials, closed stores, and the impact of the timing due to contract renewals, partially offset by higher sales for contracts based on a percentage of sales.
The following table summarizes our minimum fixed lease obligations, excluding variable commissions:
As of October 28, 2023
Remainder of Fiscal 2024$106,034 
Fiscal 202557,282 
Fiscal 202639,180 
Fiscal 202731,414 
Fiscal 202824,944 
Thereafter59,293 
Total lease payments318,147 
Less: imputed interest(31,536)
Operating lease liabilities at period end$286,611 
Future lease payment obligations related to leases that were entered into, but did not commence as of October 28, 2023, were not material. The following summarizes additional information related to our operating leases:
As of
October 28, 2023October 29, 2022
Weighted average remaining lease term (in years)4.6 years5.3 years
Weighted average discount rate4.3 %4.4 %
Supplemental cash flow information:
Cash payments for lease liabilities within operating activities$68,580 $75,876 
Right-of-use assets obtained in exchange for lease liabilities from initial recognition$69,959 $86,045 
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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
For the 13 and 26 weeks ended October 28, 2023 and October 29, 2022
(Thousands of dollars, except share and per share data)
(unaudited)

Note 9. Supplementary Information
Restructuring and other charges
During the 13 and 26 weeks ended October 28, 2023, we recognized restructuring and other charges totaling $4,274 and $8,907, respectively, comprised primarily of $4,245 and $7,827, respectively, for costs primarily associated with professional service costs for restructuring and $29 and $1,080, respectively, for severance and other employee termination and benefit costs associated with elimination of various positions as part of cost reduction objectives ($2,311 is included in accrued liabilities in the condensed consolidated balance sheet as of October 28, 2023).
Pursuant to the July 28, 2023 Credit Agreement amendment, the Board established a committee consisting of three independent directors to explore, consider, solicit expressions of interest or proposals for, respond to any communications, inquiries or proposals regarding, and advise as to all strategic alternatives to effect a “Specified Liquidity Transaction” (as defined in the Credit Agreement). Restructuring and other expenses associated with the costs of this committee, as well as other related professional service costs, are expected to decrease when the Company concludes on a strategic alternative.
During the 13 and 26 weeks ended October 29, 2022, we recognized restructuring and other charges totaling $260 and $635, respectively, comprised primarily of costs associated with professional service costs for restructuring, process improvements.
Note 10. Long-Term Incentive Plan Compensation Expense
During the 13 and 26 weeks ended October 28, 2023, we did not grant any long-term incentive plan awards. We recognized compensation expense for previously granted long-term incentive plan awards in selling and administrative expenses as follows:
13 weeks ended26 weeks ended
October 28,
2023		October 29,
2022		October 28,
2023		October 29,
2022
Stock-based awards
Restricted stock expense$4 $64 $11 $158 
Restricted stock units expense 448 820 1,016 1,686 
Performance share units expense — — — 10 
Stock option expense346 606 729 1,212 
Sub-total stock-based awards:$798 $1,490 $1,756 $3,066 
Cash settled awards
Phantom share units expense$(40)$51 $(129)$239 
Total compensation expense for long-term incentive awards$758 $1,541 $1,627 $3,305 
Total unrecognized compensation cost related to unvested awards as of October 28, 2023 was $4,001 and is expected to be recognized over a weighted-average period of 1.5 years.
Note 11. Employee Benefit Plans
We sponsor defined contribution plans for the benefit of substantially all of the employees of BNC. MBS maintains a profit sharing plan covering substantially all full-time employees of MBS. For all plans, we are responsible to fund the employer contributions directly. Total employee benefit expense for these plans was $590 and $1,026 during the 13 weeks ended October 28, 2023 and October 29, 2022, respectively. Total employee benefit expense for these plans was $1,687 and $2,285 during the 26 weeks ended October 28, 2023 and October 29, 2022, respectively.
Commencing in September 2023, we revised the 401(k)-retirement savings plan to an annual end of plan year discretionary match, in lieu of the current pay period match.
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BARNES & NOBLE EDUCATION, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
For the 13 and 26 weeks ended October 28, 2023 and October 29, 2022
(Thousands of dollars, except share and per share data)
(unaudited)

Note 12. Income Taxes
Our provision for income taxes during interim reporting periods has historically been calculated by applying an estimate of the annual effective tax rate for the full fiscal year to ordinary income (loss) (pre-tax income (loss) excluding unusual or infrequently occurring discrete items) for the reporting period. For the 26 weeks ended October 28, 2023, and in accordance with ASC 740-270-30-18 “Income Taxes - Interim Reporting - Initial Measurement,” and paragraph 82 of FASB interpretation No. 18, "Accounting for Income Taxes in Interim Periods" ("FIN 18"), we computed our provision for income taxes based on the actual effective tax rate for the year-to-date period by applying the discrete method. We determined that as small changes in estimated ordinary income would result in significant changes in the estimated annual effective tax rate, the historical method would not provide a reliable estimate for the 26 weeks ended October 28, 2023. We believe that, at this time, the use of this discrete method represents the best estimate of our annual effective tax rate.
We recorded an income tax expense of $314 on pre-tax income of $25,168 during the 13 weeks ended October 28, 2023, which represented an effective income tax rate of 1.2% and an income tax benefit of $(383) on pre-tax income of $23,785 during the 13 weeks ended October 29, 2022, which represented an effective income tax rate of (1.6)%. We recorded an income tax expense of $303 on pre-tax loss of $(24,814) during the 26 weeks ended October 28, 2023, which represented an effective income tax rate of (1.2)% and an income tax expense of $464 on pre-tax loss of $(25,690) during the 26 weeks ended October 29, 2022, which represented an effective income tax rate of (1.8)%. The effective tax rate for the 26 weeks ended October 28, 2023 is lower than the prior year comparable period due to utilization of the discrete tax provision methodology discussed above.
In assessing the realizability of the deferred tax assets, management considered whether it is more likely than not that some or all of the deferred tax assets would be realized. As of October 28, 2023, we determined that it was more likely than not that we would not realize all deferred tax assets and our tax rate for the current fiscal year reflects this determination. We will continue to evaluate this position.
Note 13. Legal Proceedings
We are involved in a variety of claims, suits, investigations and proceedings that arise from time to time in the ordinary course of our business, including actions with respect to contracts, intellectual property, taxation, employment, benefits, personal injuries and other matters. The results of these proceedings in the ordinary course of business are not expected to have a material adverse effect on our condensed consolidated financial position, results of operations, or cash flows.
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Item 2:    Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless the context otherwise indicates, references to “we,” “us,” “our” and “the Company” refer to Barnes & Noble Education, Inc. or “BNED”, a Delaware corporation. References to “Barnes & Noble College” or “BNC” refer to our subsidiary Barnes & Noble College Booksellers, LLC. References to “MBS” refer to our subsidiary MBS Textbook Exchange, LLC.
Overview
Description of Business
Barnes & Noble Education, Inc. (“BNED”) is one of the largest contract operators of physical and virtual bookstores for college and university campuses and K-12 institutions across the United States. We are also one of the largest textbook wholesalers, inventory management hardware and software providers. We operate 1,271 physical, virtual, and custom bookstores and serve more than 5.8 million students, delivering essential educational content, tools and general merchandise within a dynamic omnichannel retail environment.
The strengths of our business include our ability to compete by developing new products and solutions to meet market needs, our large operating footprint with direct access to students and faculty, our well-established, deep relationships with academic partners and stable, long-term contracts and our well-recognized brands. We provide product and service offerings designed to address the most pressing issues in higher education, including equitable access, enhanced convenience and improved affordability through innovative course material delivery models designed to drive improved student experiences and outcomes. We offer 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. During the 26 weeks ended October 28, 2023, BNC First Day total revenue increased by $73 million, or 39%, to $261 million compared to $188 million during the prior year period.
We expect to continue to introduce scalable and advanced solutions focused largely on the student and customer experience, expand our e-commerce capabilities and accelerate such capabilities through our service providers, 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 Relationship”), win new accounts, and expand our revenue opportunities through strategic relationships. We expect gross general merchandise sales to increase over the long term, as our product assortments continue to emphasize and reflect changing consumer trends, and we evolve our presentation concepts and merchandising of products in stores and online, which we expect to be further enhanced and accelerated through the F/L Relationship. As our service providers, we receive unparalleled product assortment, e-commerce capabilities and powerful digital marketing tools from Fanatics and Lids on our behalf to drive increased value for customers and accelerate growth of our logo general merchandise business. During the 26 weeks ended October 28, 2023, Retail Gross Comparable Store general merchandise sales increased by 1.1%.
The Barnes & Noble brand (licensed from our former parent) along with our subsidiary brands, BNC and MBS, are synonymous with innovation in bookselling and campus retailing, and are widely recognized and respected brands in the United States. Our large college footprint, reputation, and credibility in the marketplace not only support our marketing efforts to universities, students, and faculty, but are also important to our relationship with leading publishers who rely on us as one of their primary distribution channels.
For additional information related to our business, see Part I - Item 1. Business in our Annual Report on Form 10-K for the fiscal year ended April 29, 2023.
Financing Arrangements
During the 13 and 26 weeks ended October 28, 2023, we amended our existing Credit Agreement and Term Loan Agreement to, extend the maturity dates and modify various terms to provide additional liquidity. For additional information, see Item 1. Financial Statements - Note 7. Debt.
Sale of DSS Segment
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. On May 31, 2023, we completed the sale of these assets related to our DSS Segment for cash proceeds of $20 million, net of certain transaction fees, severance costs, escrow, and other considerations. During the 26 weeks ended October 28, 2023, we recorded a Gain on Sale of Business of $3.1 million in Loss from Discontinued Operations, Net, related to the sale. Net cash proceeds from the sale were used for debt repayment and provided additional funds for working capital needs under our Credit Facility. For additional information, see Note 2. Summary of Significant Accounting Policies.
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Cost Savings Initiative
During Fiscal 2023, we implemented a significant cost reduction program designed to streamline our operations, maximize productivity and drive profitability. We reduced our workforce, eliminated duplicate administrative headcounts at all levels, implemented improved system development processes to reduce maintenance costs, reduced capital expenditures, and evaluated operating contractual obligations for cost savings. Over the last year, we have achieved annualized savings of $30 million to $35 million from these cost savings initiatives. Additionally, during Fiscal 2024, Management's planned to implement further cost savings measures, including reduction of gross capital expenditures, amounting to approximately $25 million, of which approximately $14 million has been achieved during the 26 weeks ended October 28, 2023. Management believes that these plans are within its control and will be focused on implementing as outlined.
BNC First Day Equitable and Inclusive Access Programs
We provide product and service offerings designed to address the most pressing issues in higher education, including equitable access, enhanced convenience and improved affordability through innovative course material delivery models designed to drive improved student experiences and outcomes. We offer 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.
•First Day Complete is adopted by an institution and includes the majority of undergraduate classes (and on occasion graduate classes), providing students both physical and digital materials. The First Day Complete model drives substantially greater unit sales and sell-through for the bookstore.
•First Day is adopted by a faculty member for a single course, and students receive primarily digital course materials through their school's learning management system ("LMS").
Offering course materials through our equitable and inclusive access First Day Complete and First Day models is a key, and increasingly important strategic initiative of ours to meet the market demands of substantially reduced pricing to students, as well as the opportunity to improve student outcomes, while, at the same time, increasing our market share, revenue and relative gross profits of course material sales given the higher volumes of units sold in such models as compared to historical sales models that rely on individual student marketing and sales. These programs have allowed us to reverse historical long-term trends in course materials revenue declines, which have been observed at those schools where such programs have been adopted, and improve predictability of our future results. We are moving quickly and decisively to accelerate our First Day Complete strategy. We plan to move many institutions to First Day Complete in Fiscal 2024 and the majority of our schools by Fiscal 2025, with continued relative adoption of this model thereafter.
The following table summarizes our BNC First Day sales for the 13 and 26 weeks ended October 28, 2023 and October 29, 2022:
Dollars in millions13 weeks ended26 weeks ended
October 28, 2023October 29, 2022Var $Var %October 28, 2023October 29, 2022Var $Var %
First Day Complete Sales
$136.4 $90.0 $46.4 52%$161.9 $106.5 $55.4 52%
First Day Sales
$62.8 $53.3 $9.5 18%$99.1 $81.9 $17.2 21%
Total BNC First Day Sales
$199.2 $143.3 $55.9 39%$261.0 $188.4 $72.6 39%
First Day CompleteFall 2023Fall 2022Var #Var %
Number of campus stores157 111 46 41%
Estimated enrollment (a)
800,000 545,000 255,000 47%
(a) Total undergraduate and graduate student enrollment as reported by National Center for Education Statistics (NCES)
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Relationship with Fanatics and Lids
In December 2020, we entered into the F/L Relationship. Under the related service provider agreements, we receive unparalleled product assortment, e-commerce capabilities and powerful digital marketing tools to drive increased value for customers and accelerate growth of our general merchandise business. On our behalf, Fanatics’ cutting-edge e-commerce and technology expertise offers our campus stores expanded product selection, a world-class online and mobile experience, and a progressive direct-to-consumer platform. Coupled with Lids, the leading standalone brick and mortar retailer focused exclusively on licensed fan and alumni products, our campus stores have improved access to trend and sales performance data on licensees, product styles, and design treatments.
We maintain our relationships with campus partners and remain responsible for staffing and managing the day-to-day operations of our campus bookstores. We also work closely with our campus partners to ensure that each campus store maintains unique aspects of in-store merchandising, including localized product assortments and specific styles and designs that reflect each campus’s brand. We leverage Fanatics’ e-commerce technology and expertise for the operational management of the emblematic merchandise and gift sections of our campus store websites. Lids manages in-store assortment planning and merchandising of emblematic apparel, headwear, and gift products for our partner campus stores, and Lids owns the inventory it manages, relieving us of the obligation to finance inventory purchases from working capital.
Segments
During the fourth quarter of Fiscal 2023, assets related to our DSS Segment met the criteria for classification as Assets Held for Sale and Discontinued Operations and is no longer a reportable segment. We completed the sale of the previous DSS Segment during the first quarter of Fiscal 2024. For additional information, see Note 2. Summary of Significant Accounting Policies.
We have 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 a specific reporting segment and continue to be presented as “Corporate Services”.
We identify our segments in accordance with the way our business is managed (focusing on the financial information distributed) and the manner in which our chief operating decision maker allocates resources and assesses financial performance. The following summarizes the three segments. For additional information about each segment's operations, see Part I - Item 1. Business in our Annual Report on Form 10-K for the fiscal year ended April 29, 2023.
Retail Segment
The Retail Segment operates 1,271 college, university, and K-12 school bookstores, comprised of 717 physical bookstores and 554 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 service providers, 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.
During the 26 weeks ended October 28, 2023, we opened 31 stores and closed 126 stores in the Retail Segment, with estimated net annual sales of $60 million as we pruned some under-performing, less profitable stores, satellite stores, and certain other contracts were awarded to competitors. We plan to move many institutions to First Day Complete in Fiscal 2024 and the majority of our stores by Fiscal 2025, with continued relative adoption of this model thereafter.
Wholesale Segment
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 717 physical bookstores) and sources and distributes new and used textbooks to our 554 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.
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Seasonality
Our business is highly seasonal. Our quarterly results also may fluctuate depending on the timing of the start of the various schools' semesters, as well as shifts in our fiscal calendar dates. These shifts in timing may affect the comparability of our results across periods. Our fiscal year is comprised of 52 or 53 weeks, ending on the Saturday closest to the last day of April.
Our retail business is highly seasonal, with the major portion of sales and operating profit realized during the second and third fiscal quarters, when college students generally purchase and rent textbooks for the upcoming semesters.
Retail product revenue is recognized when the customer takes physical possession of our products, which occurs either at the point of sale for products purchased at physical locations or upon receipt of our products by our customers for products ordered through our websites and virtual bookstores. Revenue from the sale of digital textbooks, which contains a single performance obligation, is recognized at the point of sale as product revenue in our condensed consolidated financial statements. Revenue from the rental of physical textbooks is deferred and recognized over the rental period based on the passage of time commencing at the point of sale, when control of the product transfers to the customer and is recognized as rental income in our condensed consolidated financial statements. Depending on the product mix offered under the BNC First Day offerings, revenue recognized is consistent with our policies for product, digital and rental sales, net of an anticipated opt-out or return provision.
Given the growth of BNC First Day programs, the timing of cash collection from our school partners may shift to periods subsequent to when the revenue is recognized. When a school adopts our BNC First Day equitable and inclusive access offerings, cash collection from the school generally occurs after the institution's drop/add dates, which is later in the working capital cycle, particularly in our third quarter given the timing of the Spring Term and our quarterly reporting period, as compared to direct-to-student point-of-sale transactions where cash is generally collected during the point-of-sale transaction or within a few days from the credit card processor. As a higher percentage of our sales shift to BNC First Day equitable and inclusive access offerings, we are focused on efforts to better align the timing of our cash outflows to course material vendors and schools with cash inflows collected from schools, including modifying payment terms in existing and future school contracts.
Sales attributable to our wholesale business are generally highest in our first, second and third quarters, as it sells textbooks and other course materials for retail distribution.
Trends, Competition and Other Business Conditions Affecting Our Business
The market for educational materials continues to undergo significant changes. As tuition and other costs rise, colleges and universities face increasing pressure to attract and retain students and provide them with innovative, affordable educational content and tools that support their educational development. Current trends, competition and other factors affecting our business include:
•Overall Capital Markets, Economic Environment, College Enrollment and Consumer Spending Patterns. Our business is affected by capital markets, the overall economic environment, funding levels at colleges and universities, by changes in enrollments at colleges and universities, and spending on course materials and general merchandise.
•Capital Market Trends: We may require additional capital in the future to sustain or grow our business, including implementation of our strategic initiatives. The future availability of financing will depend on a variety of factors, such as economic and market conditions, and the availability of credit. These factors have and could continue to materially adversely affect our costs of borrowing, and our financial position and results of operations would be adversely impacted. Volatility in global financial markets may also limit our ability to access the capital markets at a time when we would like, or need, to raise capital, which could have an impact on our ability to react to changing economic and business conditions.
•Economic Environment: Retail general merchandise sales are subject to short-term fluctuations driven by the broader retail environment and other economic factors, such as interest rate fluctuations and inflationary considerations. Broader macro-economic global supply chain issues could impact our ability to source textbooks, school supplies and general merchandise sold in our campus bookstores, including technology-related products and emblematic clothing. Union and labor market issues may also impact our ability to provide services and products to our customers. A significant reduction in U.S. economic activity could lead to decreased consumer spending.
•Enrollment Trends: The growth of our business depends on our ability to attract new customers and to increase the level of engagement by our current customers. In the Fall of 2023, we observed increased enrollment trends. Enrollment trends, specifically at community colleges, generally correlate with changes in the economy and unemployment factors, e.g., low unemployment tends to lead to low enrollment and higher unemployment rates tend to lead to higher enrollment trends, as students generally enroll to obtain skills that are in demand in the workforce. Additionally, enrollment trends are impacted by the dip in the United States birth rate resulting in fewer students at the
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traditional 18-24 year-old college age. Online degree program enrollments continue to grow, even in the face of declining overall higher education enrollment.
•Increased Use of Open Educational Resources ("OER"), Online and Digital Platforms as Companions or Alternatives to Traditional Course Materials, Including Artificial Intelligence ("AI") Technologies. Students and faculty can now choose from a wider variety of educational content and tools than ever before, delivered across both print and digital platforms.
•Increasing Costs Associated with Defending Against Security Breaches and Other Data Loss, Including Cyber-Attacks. We are increasingly dependent upon information technology systems, infrastructure and data. Cyber-attacks are increasing in their frequency, sophistication and intensity, and have become increasingly difficult to detect. We continue to invest in data protection, including insurance, and information technology to prevent or minimize these risks and, to date, we have not experienced any material service interruptions and are not aware of any material breaches.
•Distribution Network Evolving. The way course materials are distributed and consumed is changing significantly, a trend that is expected to continue. The market for course materials, including textbooks and supplemental materials, is intensely competitive and subject to rapid change.
•Disintermediation. We are experiencing growing competition from alternative media and alternative sources of textbooks and other course materials. In addition to the official physical or virtual campus bookstore, course materials are also sold through off-campus bookstores, e-commerce outlets, digital platform companies, publishers, including Cengage, Pearson and McGraw Hill, bypassing the bookstore distribution channel by selling or renting directly to students and educational institutions, including student-to-student transactions over the Internet, and multi-title subscription access.
•Suppliers, Supply Chain and Inventory. The products that we sell originate from a wide variety of domestic and international vendors. During Fiscal 2023, our four largest retail suppliers, excluding our wholesale business which fulfills orders for all our physical and virtual bookstores, accounted for approximately 28% of our merchandise purchased, with the largest supplier accounting for approximately 8% of our merchandise purchased. Since the demand for used textbooks has historically been greater than the available supply, our financial results are highly dependent upon Wholesale’s ability to build its textbook inventory from suppliers in advance of the selling season. In Fiscal 2021 and Fiscal 2022, during the COVID-19 pandemic, the impact of fewer students on campus, and the resulting increase in transition to digital materials, has significantly impacted our on-campus buyback programs which supplies Wholesale’s used textbook inventory for future selling periods. Some textbook publishers have begun to supply textbooks pursuant to consignment or rental programs which could impact used textbook supplies in the future. Additionally, Wholesale is a national distributor for rental textbooks offered through McGraw-Hill Education's and Pearson Education’s consignment rental program. We do not have long-term arrangements with most of our suppliers to guarantee availability of merchandise, content or services, particular payment terms or the extension of credit limits. If our current suppliers were to stop selling merchandise, content or services to us on acceptable terms, including as a result of one or more supplier bankruptcies due to poor economic conditions or refusal by such suppliers to ship products to us due to delayed or extended payment windows as a result of our own liquidity constraints, we may be unable to procure the same merchandise, content or services from other suppliers in a timely and efficient manner and on acceptable terms, or at all. Additionally, delayed or incomplete publisher shipments of physical textbook orders, or delays in receiving digital courseware access codes, could have an adverse impact on sales, including our First Day Complete equitable access program, which relies upon timely receipt of inventory in advance of class start dates each academic term. The broader macro-economic global supply chain issues may also impact our ability to source school supplies and general merchandise sold in our campus bookstores, including technology-related products and emblematic clothing.
•Price Competition. In addition to the competition in the services we provide to our customers, our textbook and other course materials business faces significant price competition. Students purchase textbooks and other course materials from multiple providers, are highly price sensitive, and can easily shift spending from one provider or format to another.
•First Day Complete and First Day Models. Offering course materials sales through our equitable and inclusive access First Day Complete and First Day models is a key, and increasingly important, strategic initiative of ours to meet the market demands of substantially reduced pricing to students. Our First Day Complete and First Day programs contribute to improved student outcomes, while increasing our market share, revenue and relative gross profits of course materials sales given the higher volumes of units sold in such models as compared to historical sales models that rely on individual student marketing and sales. These programs have allowed us to reverse historical long-term trends in course materials revenue declines, which have been observed at those schools where such programs have been adopted. We are moving quickly and decisively to accelerate our First Day Complete strategy. While we plan to
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move many institutions to First Day Complete in Fiscal 2024, and the majority of our schools by Fiscal 2025, we cannot guarantee that we will be able to achieve these plans within these timeframes or at all.
•A Large Number of Traditional Campus Bookstores Have Yet to be Outsourced.
•Outsourcing Trends. We continue to see the trend towards outsourcing in the campus bookstore market and also continue to see a variety of business models being pursued for the provision of course materials (such as equitable and inclusive access programs and publisher subscription models) and general merchandise.
•New and Existing Bookstore Contracts. We expect awards of new accounts resulting in new physical and virtual store openings will continue to be an important driver of future growth in our business. We also expect that certain less profitable or non-essential bookstores we operate may close. The scope of any such store closures remains uncertain, although we are not aware, at this time, of any significant volume of stores which we operate that are likely to close or have informed us of upcoming closures.
For additional discussion of our trends and other factors affecting our business, see Part I - Item 1. Business in our Annual Report on Form 10-K for the fiscal year ended April 29, 2023.
Elements of Results of Operations
Our condensed consolidated financial statements reflect our consolidated financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States (“GAAP”). The results of operations reflected in our condensed consolidated financial statements are presented on a consolidated basis. All material intercompany accounts and transactions have been eliminated in consolidation.
During the fourth quarter of Fiscal 2023, assets related to our DSS Segment met the criteria for classification as Assets Held for Sale and Discontinued Operations. Certain assets and liabilities associated with the DSS Segment are presented in our condensed consolidated balance sheets as current "Assets Held for Sale" and current "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.
Our sales are primarily derived from the sale of course materials, which include new, used, rental and digital textbooks. Additionally, at college and university bookstores which we operate, we sell general merchandise, including emblematic apparel and gifts, trade books, computer products, school and dorm supplies, convenience and café items and graduation products. Our rental income is primarily derived from the rental of physical textbooks. We also derive revenue from other sources, such as sales of inventory management, hardware and point-of-sale software, and other services.
Our cost of sales primarily includes costs such as merchandise costs, textbook rental amortization, content development cost amortization, warehouse costs related to inventory management and order fulfillment, insurance, certain payroll costs, and management service agreement costs, including rent expense, related to our college and university contracts and other facility related expenses.
Our selling and administrative expenses consist primarily of store payroll and store operating expenses. Selling and administrative expenses also include long-term incentive plan compensation expense and general office expenses, such as merchandising, procurement, field support, and finance and accounting. Shared-service costs such as human resources, legal, treasury, information technology, and various other corporate level expenses and other governance functions, are not allocated to a specific reporting segment and are recorded in Corporate Services as discussed in the Overview - Segments discussion above.


34
Results of Operations - Summary - Continuing Operations (a)

 13 weeks ended26 weeks ended
Dollars in thousandsOctober 28,
2023		October 29,
2022		October 28,
2023		October 29,
2022
Sales:
Product sales and other (b)
$569,698 $567,299 $822,348 $811,061 
Rental income40,681 41,334 52,192 52,246 
Total sales$610,379 $608,633 $874,540 $863,307 
Net income (loss) from continuing operations$24,854 $24,168 $(25,117)$(26,154)
Adjusted Earnings (non-GAAP) - Continuing Operations (c)$29,128 $24,428 $(16,210)$(25,493)
Adjusted EBITDA by Segment (non-GAAP) - Continuing Operations (c)
Retail$48,347 $39,416 $29,465 $14,431 
Wholesale2,598 1,588 5,004 4,356 
Corporate Services(5,287)(5,075)(10,205)(12,289)
Elimination4,623 3,258 (825)(1,621)
Total Adjusted EBITDA (non-GAAP) (c)
$50,281 $39,187 $23,439 $4,877 
 
(a)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. Net Loss from Continuing Operations excludes the results of operations related to the DSS Segment for all periods reported above.
(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 below.
(c)Adjusted Earnings, Adjusted EBITDA, and Adjusted EBITDA by Segment are non-GAAP financial measures. See Use of Non-GAAP Measures discussion below.

The following table sets forth, for the periods indicated, the percentage relationship that certain items bear to total sales:
 13 weeks ended26 weeks ended
October 28,
2023		October 29,
2022		October 28,
2023		October 29,
2022
Sales:
Product sales and other93.3 %93.2 %94.0 %93.9 %
Rental income6.7 6.8 6.0 6.1 
Total sales100.0 100.0 100.0 100.0 
Cost of sales (exclusive of depreciation and amortization expense):
Product and other cost of sales (a)
79.3 78.9 80.1 78.9 
Rental cost of sales (a)
54.5 55.5 55.0 55.9 
Total cost of sales77.7 77.3 78.6 77.5 
Gross margin22.3 22.7 21.4 22.5 
Selling and administrative expenses14.1 16.3 18.7 21.9 
Depreciation and amortization expense1.7 1.7 2.3 2.5 
Restructuring and other charges0.7 — 1.0 0.1 
Operating income (loss) from continuing operations5.8 %4.7 %(0.6)%(2.0)%
 
(a)Represents the percentage these costs bear to the related sales, instead of total sales.
35
Results of Operations - Discontinued Operations
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 million, net of certain transaction fees, severance costs, escrow, and other considerations. During the 26 weeks ended October 28, 2023, we recorded a Gain on Sale of Business of $3.1 million in Loss from Discontinued Operations, Net, related to the sale. Net cash proceeds from the sale were used for debt repayment and to provide additional funds for working capital needs under our Credit Facility.
13 weeks ended26 weeks ended
Dollars in thousandsOctober 28,
2023		October 29,
2022		October 28,
2023		October 29,
2022
Total sales$— $8,465 $2,784 $17,649 
Cost of sales (a)
— 1,772 76 3,472 
Gross profit (a)
— 6,693 2,708 14,177 
Selling and administrative expenses643 8,131 2,924 16,277 
Depreciation and amortization3 503 3 2,140 
Gain on sale of business— — (3,068)— 
Impairment loss (non-cash) (b)
— — 610 — 
Restructuring costs (c)
10 — 3,297 — 
Transaction costs18 — 13 — 
Operating loss(674)(1,941)(1,071)(4,240)
Income tax expense— 8320169
Loss from discontinued operations, net of tax$(674)$(2,024)$(1,091)$(4,409)
(a)    Cost of sales and Gross margin for the DSS Segment includes amortization expense (non-cash) related to content development costs of $0 and $1.6 million for the 13 weeks ended October 28, 2023 and October 29, 2022, respectively, and $0 and $3.2 million for the 26 weeks ended October 28, 2023 and October 29, 2022, respectively.
(b)    During the 26 weeks ended October 28, 2023, we recognized an impairment loss (non-cash) of $0.6 million (both pre-tax and after-tax), comprised of $0.1 million and $0.5 million 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 26 weeks ended October 28, 2023, we recognized restructuring and other charges of $3.3 million comprised of severance and other employee termination costs.
Results of Operations - Continuing Operations - 13 and 26 weeks ended October 28, 2023 compared with the 13 and 26 weeks ended October 29, 2022
13 weeks ended October 28, 2023
Dollars in thousandsRetailWholesaleCorporate ServicesEliminationsTotal
Sales:
Product sales and other$558,655 $20,973 $— $(9,930)$569,698 
Rental income40,681 — — — 40,681 
Total sales599,336 20,973 — (9,930)610,379 
Cost of sales (exclusive of depreciation and amortization expense):
Product and other cost of sales451,623 14,883 — (14,553)451,953 
Rental cost of sales22,184 — — — 22,184 
Total cost of sales473,807 14,883 — (14,553)474,137 
Gross profit125,529 6,090 — 4,623 136,242 
Selling and administrative expenses77,182 3,492 5,287 — 85,961 
Depreciation and amortization expense8,911 1,254 10 — 10,175 
Restructuring and other charges29 — 4,245 — 4,274 
Operating income (loss)$39,407 $1,344 $(9,542)$4,623 $35,832 
36
13 weeks ended October 29, 2022
Dollars in thousandsRetailWholesaleCorporate ServicesEliminationsTotal
Sales:
Product sales and other$557,276 $21,120 $— $(11,097)$567,299 
Rental income41,334 — — — 41,334 
Total sales598,610 21,120 — (11,097)608,633 
Cost of sales (exclusive of depreciation and amortization expense):
Product and other cost of sales446,167 15,665 — (14,281)447,551 
Rental cost of sales22,941 — — — 22,941 
Total cost of sales469,108 15,665 — (14,281)470,492 
Gross profit129,502 5,455 — 3,184 138,141 
Selling and administrative expenses90,086 3,867 5,075 (74)98,954 
Depreciation and amortization expense8,869 1,370 17 — 10,256 
Restructuring and other charges— — 260 — 260 
Operating income (loss)$30,547 $218 $(5,352)$3,258 $28,671 
26 weeks ended October 28, 2023
Dollars in thousandsRetailWholesaleCorporate ServicesEliminationsTotal
Sales:
Product sales and other$792,604 $59,764 $— $(30,020)$822,348 
Rental income52,192 — — — 52,192 
Total sales844,796 59,764 — (30,020)874,540 
Cost of sales (exclusive of depreciation and amortization expense):
Product and other cost of sales640,279 47,880 — (29,192)658,967 
Rental cost of sales28,697 — — — 28,697 
Total cost of sales668,976 47,880 — (29,192)687,664 
Gross profit175,820 11,884 — (828)186,876 
Selling and administrative expenses146,355 6,880 10,205 (3)163,437 
Depreciation and amortization expense17,877 2,531 20 — 20,428 
Restructuring and other charges555 526 7,826 — 8,907 
Operating income (loss)$11,033 $1,947 $(18,051)$(825)$(5,896)
26 weeks ended October 29, 2022
Dollars in thousandsRetailWholesaleCorporate ServicesEliminationsTotal
Sales:
Product sales and other$782,871 $58,203 $— $(30,013)$811,061 
Rental income52,246 — — — 52,246 
Total sales835,117 58,203 — (30,013)863,307 
Cost of sales (exclusive of depreciation and amortization expense):
Product and other cost of sales622,416 45,849 — (28,310)639,955 
Rental cost of sales29,206 — — — 29,206 
Total cost of sales651,622 45,849 — (28,310)669,161 
Gross profit183,495 12,354 — (1,703)194,146 
Selling and administrative expenses169,090 7,998 12,289 (82)189,295 
Depreciation and amortization expense18,398 2,719 35 — 21,152 
Restructuring and other charges— — 635 — 635 
Operating (loss) income $(3,993)$1,637 $(12,959)$(1,621)$(16,936)
37
Sales
The following table summarizes our sales for the 13 and 26 weeks ended October 28, 2023 and October 29, 2022:
 13 weeks ended26 weeks ended
Dollars in thousandsOctober 28, 2023October 29, 2022Var $Var %October 28, 2023October 29, 2022Var $Var %
Product sales and other$569,698 $567,299 $2,399 0.4%$822,348 $811,061 $11,287 1.4%
Rental income40,681 41,334 $(653)(1.6)%52,192 52,246 $(54)(0.1)%
Total Sales$610,379 $608,633 $1,746 0.3%$874,540 $863,307 $11,233 1.3%
The sales increase during the 13 and 26 weeks ended October 28, 2023 is primarily related to higher course material sales, primarily at our BNC First Day programs. See Retail discussion below. The components of the sales variances for the 13 and 26 week periods are reflected in the table below.
Sales variances13 weeks ended26 weeks ended
Dollars in millionsOctober 28, 2023October 28, 2023
Retail Sales (a)
New stores$16.3 $21.0 
Closed stores(30.3)(37.8)
Comparable stores (a)
16.5 25.3 
Textbook rental deferral(1.8)0.3 
Service revenue (b)
(0.1)(0.4)
Other (c)
0.1 1.3 
Retail sales subtotal:$0.7 $9.7 
Wholesale Sales$(0.2)$1.6 
Eliminations (d)
$1.2 $(0.1)
Total sales variance:$1.7 $11.2 
(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)    Service revenue includes brand partnership marketing, shipping and handling, and revenue from other programs.
(c)    Other includes inventory liquidation sales to third parties, marketplace sales and certain accounting adjusting items related to return reserves, and other deferred items.
(d)    Eliminates Wholesale sales and service fees to Retail and Retail commissions earned from Wholesale. See discussion of intercompany activities and eliminations below.

Retail
The following is a store count summary for physical stores and virtual stores.
 13 weeks ended26 weeks ended
October 28, 2023October 29, 2022October 28, 2023October 29, 2022
Number of Stores:PhysicalVirtualTotalPhysicalVirtualTotalPhysicalVirtualTotalPhysicalVirtualTotal
Beginning of period726 563 1,289 793 613 1,406 774 592 1,366 805 622 1,427 
Opened5 6 11 8 10 18 13 18 31 34 24 58 
Closed14 15 29 8 17 25 70 56 126 46 40 86 
End of period717 554 1,271 793 606 1,399 717 554 1,271 793 606 1,399 
During the 26 weeks ended October 28, 2023, we opened 31 stores and closed 126 stores in the Retail Segment, with estimated net annual sales of $60 million as we pruned some under-performing, less profitable stores, satellite stores, and certain other contracts were awarded to competitors. We plan to move many institutions to First Day Complete in Fiscal 2024 and the majority of our stores by Fiscal 2025, with continued relative adoption of this model thereafter.
38
Generally, sales are impacted by revenue from net new/closed stores, increased campus traffic, and an increase in the number of on campus activities and events, such as graduations, athletic events, alumni events and prospective student campus tours, as schools approach a more traditional campus experience. We continued to experience higher sales related to our BNC First Day programs and higher general merchandise gross sales, especially for graduation products, logo products, and cafe and convenience products, as on campus traffic continues to grow compared to the prior year.
Retail sales increased by $0.7 million, or 0.1%, to $599.3 million during the 13 weeks ended October 28, 2023 from $598.6 million during the 13 weeks ended October 29, 2022.  
•Product sales and other increased by $1.4 million, or 0.2%, to $558.7 million during the 13 weeks ended October 28, 2023 from $557.3 million during the 13 weeks ended October 29, 2022. During the 13 weeks ended October 28, 2023, total course material product sales increased by $19.0 million, or 4.6%, to $435.4 million, compared to the prior year period, primarily due to the growth of our BNC First Day programs discussed below; total general merchandise product net sales decreased by $17.6 million, or 14.4%, to $105.0 million, compared to the prior year period, primarily due lower commissions received for logo general merchandise part of the F/L Relationship-related agreements, under which the commission rates adjusts as the relationship matured, offset by higher graduation product sales. Effective August 1, 2023, our commission rates received for logo general merchandise increases for an estimated one year period under the terms of the July 2023 Term Loan Credit Agreement amendment. Retail Gross Comparable Store Sales for general merchandise decreased by 1.7% compared to the prior year period as discussed below. Service and other revenue remained flat at $18.2 million compared to the prior year period.
•Total course material rental income decreased by $0.7 million, or 1.6%, to $40.7 million during the 13 weeks ended October 28, 2023 from $41.3 million during the 13 weeks ended October 29, 2022 primarily due to the increased shift to digital course materials.
•Revenue from both of our BNC First Day equitable and inclusive access programs increased during the 13 weeks ended October 28, 2023 compared to the prior year period as follows:
Dollars in millions13 weeks ended
October 28, 2023October 29, 2022Var $Var %
First Day Complete Sales
$136.4 $90.0 $46.4 52%
First Day Sales
$62.8 $53.3 $9.5 18%
Total BNC First Day Sales
$199.2 $143.3 $55.9 39%
Retail sales increased by $9.7 million, or 1.2%, to $844.8 million during the 26 weeks ended October 28, 2023 from $835.1 million during the 26 weeks ended October 29, 2022.  
•Product sales and other increased by $9.7 million, or 1.2%, to $792.6 million during the 26 weeks ended October 28, 2023 from $782.9 million during the 26 weeks ended October 29, 2022. During the 26 weeks ended October 28, 2023, total course material product sales increased by $26.6 million, or 4.9%, to $573.9 million, compared to the prior year period, primarily due to the growth of our BNC First Day programs discussed below; total general merchandise product net sales decreased by $17.8 million, or 8.4%, to $193.7 million, compared to the prior year period, primarily due to lower commissions for logo general merchandise part of the F/L Relationship-related agreements, under which the commission rates adjusts as the relationship matured, offset by higher graduation product sales. Effective August 1, 2023, our commission rates received for logo general merchandise increases for an estimated one year period under the terms of the July 2023 Term Loan Credit Agreement amendment. Retail Gross Comparable Store Sales for general merchandise increased by 1.1% compared to the prior year period as discussed below. Service and other revenue increased by $0.9 million to $25.0 million, compared to the prior year period, primarily due to improvements in marketplace sales and return reserves, partially by lower other income for non-return rental penalty fees.
•Total course material rental income remained flat at $52.2 million during both 26 weeks ended October 28, 2023 and October 29, 2022 primarily due to the increased shift to digital course materials.
39
•Revenue from both of our BNC First Day equitable and inclusive access programs increased during the 26 weeks ended October 28, 2023 compared to the prior year period as follows:
Dollars in millions26 weeks ended
October 28, 2023October 29, 2022Var $Var %
First Day Complete Sales
$161.9 $106.5 $55.4 52%
First Day Sales
$99.1 $81.9 $17.2 21%
Total BNC First Day Sales
$261.0 $188.4 $72.6 39%
First Day CompleteFall 2023Fall 2022Var #Var %
Number of campus stores 157 111 46 41%
Estimated enrollment (a)
800,000 545,000 255,000 47%
(a) Total undergraduate and post graduate student enrollment (as reported by National Center for Education Statistics).
Retail Gross Comparable Store Sales
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.
The increase in course material sales was primarily due to the growth of BNC First Day equitable and inclusive access programs (as discussed above), partially offset by a shift to lower cost options and more affordable solutions, including digital offerings. The decrease in general merchandise sales during the 13 weeks ended October 28, 2023 are primarily related to lower logo product sales. The increase in general merchandise sales during the 26 weeks ended October 28, 2023 was primarily due to higher sales related to graduation products and logo products, and cafe and convenience products.
Retail Gross Comparable Store Sales variances by category for the 13 and 26 week periods are as follows:
13 weeks ended26 weeks ended
Dollars in millions October 28, 2023October 29, 2022October 28, 2023October 29, 2022
Textbooks (Course Materials)$26.0 5.8 %$(21.8)(4.6)%$35.2 6.0 %$(19.5)(3.2)%
General Merchandise(3.1)(1.7)%7.7 4.5 %3.6 1.1 %39.2 14.9 %
Total Retail Gross Comparable Store Sales $22.9 3.6 %$(14.1)(2.2)%$38.8 4.3 %$19.7 2.3 %
Wholesale
Wholesale sales decreased by $0.2 million, or 0.7% to $20.9 million during the 13 weeks ended October 28, 2023 from $21.1 million during the 13 weeks ended October 29, 2022. The decrease is primarily due to higher returns and allowances of $1.2 million, partially offset by higher gross sales of $1.0 million compared to the prior year period.
Wholesale sales increased by $1.6 million, or 2.7% to $59.8 million during the 26 weeks ended October 28, 2023 from $58.2 million during the 26 weeks ended October 29, 2022. The increase is primarily due to higher gross sales of $6.2 million compared to the prior year period, partially offset by higher returns and allowances of $4.6 million.
40
Cost of Sales and Gross Margin
Our cost of sales increased as a percentage of sales to 77.7% during the 13 weeks ended October 28, 2023 compared to 77.3% during the 13 weeks ended October 29, 2022. Our gross margin decreased by $1.9 million, or 1.4%, to $136.2 million, or 22.3% of sales, during the 13 weeks ended October 28, 2023 from $138.1 million, or 22.7% of sales during the 13 weeks ended October 29, 2022.
Our cost of sales increased as a percentage of sales to 78.6% during the 26 weeks ended October 28, 2023 compared to 77.5% during the 26 weeks ended October 29, 2022. Our gross margin decreased by $7.3 million, or 11.5%, to $186.9 million, or 21.4% of sales, during the 26 weeks ended October 28, 2023 from $194.1 million, or 22.5% of sales during the 26 weeks ended October 29, 2022.
Retail
The following table summarizes the Retail cost of sales for the 13 and 26 weeks ended October 28, 2023 and October 29, 2022: 
13 weeks ended26 weeks ended
Dollars in thousandsOctober 28, 2023% of
Related Sales		October 29, 2022% of
Related Sales		October 28, 2023% of
Related Sales		October 29, 2022% of
Related Sales
Product and other cost of sales
$451,623 80.8%$446,167 80.1%$640,279 80.8%$622,416 79.5%
Rental cost of sales
22,184 54.5%22,941 55.5%28,697 55.0%29,206 55.9%
Total Cost of Sales
$473,807 79.1%$469,108 78.4%$668,976 79.2%$651,622 78.0%
The following table summarizes the Retail gross margin for the 13 and 26 weeks ended October 28, 2023 and October 29, 2022:
 13 weeks ended26 weeks ended
Dollars in thousandsOctober 28, 2023% of
Related Sales		October 29, 2022% of
Related Sales		October 28, 2023% of
Related Sales		October 29, 2022% of
Related Sales
Product and other gross margin
$107,032 19.2%$111,109 19.9%$152,325 19.2%$160,455 20.5%
Rental gross margin
18,497 45.5%18,393 44.5%23,495 45.0%23,040 44.1%
Gross Margin
$125,529 20.9%$129,502 21.6%$175,820 20.8%$183,495 22.0%
For the 13 and 26 weeks ended October 28, 2023, the Retail Product and other gross margin as a percentage of sales decreased as discussed below:
•For the 13 weeks ended October 28, 2023, Product and other gross margin as a percentage of sales decreased (70 basis points), driven primarily by lower margin rates for course materials (155 basis points) due to higher markdowns, including markdowns related to closed stores; and lower general merchandise sales, primarily from closed stores, and an unfavorable sales mix (20 basis points) due to the shift to digital course materials. These decreases in gross margin rate were partially offset by increased sales from higher margin First Day Complete course material sales, and lower contract costs as a percentage of sales related to our college and university contracts (100 basis points) as a result of the shift to digital and First Day models and lower performing school contracts not renewed.
•For the 26 weeks ended October 28, 2023, Product and other gross margin as a percentage of sales decreased (120 basis points), driven primarily by lower margin rates for course materials (195 basis points) due to higher markdowns, including markdowns related to closed stores, and lower general merchandise sales, primarily from closed stores, and an unfavorable sales mix (60 basis points) due to the shift to digital course materials. These decreases in gross margin rate were partially offset by increased sales from higher margin First Day Complete course material sales, and lower contract costs as a percentage of sales related to our college and university contracts (130 basis points) as a result of the shift to digital and First Day models and lower performing school contracts not renewed.
As part of the F/L Relationship-related agreements, the commission rates adjust as the relationship matures. Effective August 1, 2023, our commission rates received for logo general merchandise increases for an estimated one year period under the terms of the July 2023 Term Loan Credit Agreement amendment.
41
For the 13 and 26 weeks ended October 28, 2023, the Retail Rental gross margin as a percentage of sales increased driven primarily by favorable rental mix due to improved availability of used textbook inventory, partially offset by higher rental margin rates.
Wholesale
The cost of sales and gross margin for Wholesale were $14.9 million, or 71.0% of sales, and $6.1 million, or 29.0% of sales, respectively, during the 13 weeks ended October 28, 2023. The cost of sales and gross margin for Wholesale was $15.7 million or 74.2% of sales and $5.5 million or 25.8% of sales, respectively, during the 13 weeks ended October 29, 2022. The gross margin rate increased during the 13 weeks ended October 28, 2023 primarily due to lower markdowns, lower product costs, and lower warehouse costs, partially offset by an increase in the returns and allowances.
The cost of sales and gross margin for Wholesale were $47.9 million, or 80.1% of sales, and $11.9 million, or 19.9% of sales, respectively, during the 26 weeks ended October 28, 2023. The cost of sales and gross margin for Wholesale was $45.8 million or 78.8% of sales and $12.4 million or 21.2% of sales, respectively, during the 26 weeks ended October 29, 2022. The gross margin rate decreased during the 26 weeks ended October 28, 2023 primarily due to an increase in the returns and allowances and higher product costs, partially offset by lower markdowns.
Intercompany Eliminations
During the 13 weeks ended October 28, 2023 and October 29, 2022, our sales eliminations were $(9.9) million and $(11.1) million, respectively. During the 26 weeks ended October 28, 2023 and October 29, 2022, our sales eliminations were $(30.0) million and $(30.0) million, respectively. These sales eliminations represent the elimination of Wholesale sales and fulfillment service fees to Retail and the elimination of Retail commissions earned from Wholesale.
During the 13 weeks ended October 28, 2023 and October 29, 2022, the cost of sales eliminations were $(14.6) million and $(14.3) million, respectively. During the 26 weeks ended October 28, 2023 and October 29, 2022, the cost of sales eliminations were $(29.2) million and $(28.3) million, respectively. These cost of sales eliminations represent (i) the recognition of intercompany profit for Retail inventory that was purchased from Wholesale in a prior period that was subsequently sold to external customers during the current period and the elimination of Wholesale service fees charged for fulfillment of inventory for virtual store sales, net of (ii) the elimination of intercompany profit for Wholesale inventory purchases by Retail that remain in ending inventory at the end of the current period.
During the 13 weeks ended October 28, 2023 and October 29, 2022, the gross margin eliminations were $4.6 million and $3.2 million, respectively. During the 26 weeks ended October 28, 2023 and October 29, 2022, the gross margin eliminations were $(0.8) million and $(1.7) million, respectively. The gross margin eliminations reflect the net impact of the sales eliminations and cost of sales eliminations during the above mentioned reporting periods.
Selling and Administrative Expenses
13 weeks ended26 weeks ended
Dollars in thousandsOctober 28, 2023% of
Sales		October 29, 2022% of
Sales		October 28, 2023% of
Sales		October 29, 2022% of
Sales
Total Selling and Administrative Expenses
$85,961 14.1%$98,954 16.3%$163,437 18.7%$189,295 21.9%
During the 13 weeks ended October 28, 2023, selling and administrative expenses decreased by $13.0 million, or 13.1%, to $86.0 million from $99.0 million during the 13 weeks ended October 29, 2022. During the 26 weeks ended October 28, 2023, selling and administrative expenses decreased by $25.9 million, or 13.7%, to $163.4 million from $189.3 million during the 26 weeks ended October 29, 2022. The variances by segment are discussed below.
Retail
During the 13 weeks ended October 28, 2023, Retail selling and administrative expenses decreased by $12.9 million, or 14.3%, to $77.2 million from $90.1 million during the 13 weeks ended October 29, 2022. This decrease was primarily due to cost savings initiatives comprised of a $11.9 million decrease in comparable store payroll expense, new/closed store payroll expense and related operating costs, and a $4.1 million decrease in corporate payroll expense, infrastructure and product development costs, partially offset by a $3.1 million increase in incentive plan compensation expense due to the reversal of the incentive accrual in the prior year.
During the 26 weeks ended October 28, 2023, Retail selling and administrative expenses decreased by $22.7 million, or 13.4%, to $146.4 million from $169.1 million during the 26 weeks ended October 29, 2022. This decrease was primarily due to cost savings initiatives comprised of a $17.9 million decrease in comparable store payroll expense, new/closed store payroll expense and related operating costs, and a $5.7 million decrease in corporate payroll expense, infrastructure and product development costs, partially offset by an $0.8 million increase in incentive plan compensation expense.
42
Wholesale
During the 13 weeks ended October 28, 2023, Wholesale selling and administrative expenses decreased by $0.4 million, or 9.7%, to $3.5 million from $3.9 million during the 13 weeks ended October 29, 2022. The decrease was primarily due to cost savings initiatives comprised of lower payroll expense of $0.5 million, partially offset by higher operating expenses of $0.1 million.
During the 26 weeks ended October 28, 2023, Wholesale selling and administrative expenses decreased by $1.1 million, or 14.0%, to $6.9 million from $8.0 million during the 26 weeks ended October 29, 2022. The decrease was primarily due to cost savings initiatives comprised of lower payroll expense of $1.1 million and lower incentive plan compensation expense of $0.1 million, partially offset by higher operating expenses of $0.1 million.
Corporate Services
During the 13 weeks ended October 28, 2023, Corporate Services' selling and administrative expenses increased by $0.2 million, or 4.2%, to $5.3 million from $5.1 million during the 13 weeks ended October 29, 2022. The increase in costs was primarily due to higher incentive plan compensation expense of $0.9 million due to the reversal of the incentive accrual in the prior year, partially offset by lower operating costs of $0.4 million and lower payroll expense of $0.3 million.
During the 26 weeks ended October 28, 2023, Corporate Services' selling and administrative expenses decreased by $2.1 million, or 17.0%, to $10.2 million from $12.3 million during the 26 weeks ended October 29, 2022. The decrease in costs was primarily due to cost savings initiatives comprised of lower incentive plan compensation expense of $0.6 million, lower payroll expense of $0.8 million, and lower operating costs of $0.7 million.
Depreciation and Amortization Expense
13 weeks ended26 weeks ended
Dollars in thousandsOctober 28, 2023% of
Sales		October 29, 2022% of
Sales		October 28, 2023% of
Sales		October 29, 2022% of
Sales
Total Depreciation and Amortization Expense
$10,175 1.7%$10,256 1.7%$20,428 2.3%$21,152 2.5%
Depreciation and amortization expense decreased by $0.1 million, or 0.8%, to $10.2 million during the 13 weeks ended October 28, 2023 from $10.3 million during the 13 weeks ended October 29, 2022. Depreciation and amortization expense decreased by $0.7 million, or 3.4%, to $20.4 million during the 26 weeks ended October 28, 2023 from $21.1 million during the 26 weeks ended October 29, 2022. The decrease was primarily attributable to lower depreciable assets and intangibles due to the store impairment loss recognized during Fiscal 2023.
Restructuring and other charges
During the 13 and 26 weeks ended October 28, 2023, we recognized restructuring and other charges totaling $4.3 million and $8.9 million, respectively, comprised primarily of $4.3 million and $7.8 million, respectively, for costs primarily associated with professional service costs for restructuring as discussed below and process improvements and $0 and $1.1 million, respectively, for severance and other employee termination and benefit costs associated with elimination of various positions as part of cost savings initiatives.
Pursuant to the July 28, 2023 Credit Agreement amendment, the Board established a committee consisting of three independent directors to explore, consider, solicit expressions of interest or proposals for, respond to any communications, inquiries or proposals regarding, and advise as to all strategic alternatives to effect a “Specified Liquidity Transaction” (as defined in the Credit Agreement). Restructuring and other expenses associated with the costs of this committee, as well as other related professional service costs, are expected to decrease when the Company concludes on a strategic alternative.
During the 13 and 26 weeks ended October 29, 2022, we recognized restructuring and other charges totaling $0.3 million and $0.6 million, respectively, comprised primarily of professional service costs for restructuring and process improvements.
Operating Income (Loss)
13 weeks ended26 weeks ended
Dollars in thousandsOctober 28, 2023% of
Sales		October 29, 2022% of
Sales		October 28, 2023% of
Sales		October 29, 2022% of
Sales
Total Operating Income (Loss)$35,832 5.8%$28,671 4.7%$(5,896)(0.6)%$(16,936)(2.0)%
Our operating income was $35.8 million during the 13 weeks ended October 28, 2023, compared to $28.7 million during the 13 weeks ended October 29, 2022. The increase in operating income is due to the matters discussed above. For the 13 weeks ended October 28, 2023, excluding the $4.3 million of restructuring and other charges, discussed above, operating income was
43
$40.1 million (or 6.6% of sales). For the 13 weeks ended October 29, 2022, excluding the $0.3 million of restructuring and other charges, discussed above, operating income was $29.0 million (or 4.8% of sales).
Our operating loss was $(5.9) million during the 26 weeks ended October 28, 2023, compared to $(16.9) million during the 26 weeks ended October 29, 2022. The decrease in operating loss is due to the matters discussed above. For the 26 weeks ended October 28, 2023, excluding the $8.9 million of restructuring and other charges, discussed above, operating income was $3.0 million (or 0.3% of sales). For the 26 weeks ended October 29, 2022, excluding the $0.6 million of restructuring and other charges, discussed above, operating loss was $(16.3) million (or (1.9)% of sales).
Interest Expense, Net
 13 weeks ended26 weeks ended
Dollars in thousandsOctober 28, 2023October 29, 2022October 28, 2023October 29, 2022
Interest Expense, Net$10,664 $4,886 $18,918 $8,754 
Net interest expense increased by $5.8 million to $10.7 million during the 13 weeks ended October 28, 2023 from $4.9 million during the 13 weeks ended October 29, 2022. Net interest expense increased by $10.2 million to $18.9 million during the 26 weeks ended October 28, 2023 from $8.8 million during the 26 weeks ended October 29, 2022. The increase was primarily due to higher borrowings and higher interest rates compared to the prior year period.
Income Tax (Benefit) Expense
 13 weeks ended26 weeks ended
Dollars in thousandsOctober 28, 2023Effective RateOctober 29, 2022Effective RateOctober 28, 2023Effective RateOctober 29, 2022Effective Rate
Income Tax (Benefit) Expense
$314 1.2%$(383)(1.6)%$303 (1.2)%$464 (1.8)%
We recorded an income tax expense of $0.3 million on pre-tax income of $25.2 million during the 13 weeks ended October 28, 2023, which represented an effective income tax rate of 1.2% and we recorded an income tax benefit of $(0.4) million on a pre-tax income of $23.8 million during the 13 weeks ended October 29, 2022, which represented an effective income tax rate of (1.6)%.
We recorded an income tax expense of $0.3 million on pre-tax loss of $(24.8) million during the 26 weeks ended October 28, 2023, which represented an effective income tax rate of (1.2)% and we recorded an income tax expense of $0.5 million on a pre-tax loss of $(25.7) million during the 26 weeks ended October 29, 2022, which represented an effective income tax rate of (1.8)%.
The effective tax rate for the 13 and 26 weeks ended October 28, 2023 is higher than the prior year comparable period due to the utilization of the discrete tax provision methodology in the current year. For additional information, see Item 1. Financial Statements - Note 12. Income Taxes.
Net Income (Loss) from Continuing Operations
 13 weeks ended26 weeks ended
Dollars in thousandsOctober 28, 2023October 29, 2022October 28, 2023October 29, 2022
Net Income (Loss) from Continuing Operations$24,854 $24,168 $(25,117)$(26,154)
As a result of the factors discussed above, net income from continuing operations was $24.9 million during the 13 weeks ended October 28, 2023, compared with $24.2 million during the 13 weeks ended October 29, 2022 and net loss from continuing operations was $(25.1) million during the 26 weeks ended October 28, 2023, compared with $(26.2) million during the 26 weeks ended October 29, 2022.
Adjusted Earnings (non-GAAP) is $29.1 million during the 13 weeks ended October 28, 2023, compared with $24.4 million during the 13 weeks ended October 29, 2022. Adjusted Earnings (non-GAAP) is $(16.2) million during the 26 weeks ended October 28, 2023, compared with $(25.5) million during the 26 weeks ended October 29, 2022. See Adjusted Earnings (non-GAAP) discussion below.
44
Use of Non-GAAP Measures - Adjusted Earnings, Adjusted EBITDA, Adjusted EBITDA by Segment, and Free Cash Flow
To supplement our results prepared in accordance with generally accepted accounting principles (“GAAP”), we use the measure 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 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 less capital expenditures, cash interest and cash taxes.
To properly and prudently evaluate our business, we encourage you to review our condensed consolidated financial statements included elsewhere in this Form 10-Q, 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, the most directly comparable financial measure presented in accordance with GAAP, set forth in the tables below. All of the items included in the reconciliations below 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, our 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 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 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.
Consolidated Adjusted Earnings (non-GAAP) - Continuing Operations
 13 weeks ended26 weeks ended
Dollars in thousandsOctober 28, 2023October 29, 2022October 28, 2023October 29, 2022
Net income (loss) from continuing operations (a)
$24,854 $24,168 $(25,117)$(26,154)
Reconciling items (below)
4,274 260 8,907 661 
Adjusted Earnings (non-GAAP) $29,128 $24,428 $(16,210)$(25,493)
Reconciling items
Content amortization (non-cash)
$— $— $— $26 
Restructuring and other charges (b)
4,274 260 8,907 635 
Reconciling items (c)
$4,274 $260 $8,907 $661 
(a)     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. Net Loss from Continuing Operations excludes the results of operations related to the DSS Segment for all years reported above.
(b)    See Management Discussion and Analysis and Results of Operations discussion above.
(c)    There is no pro forma income effect of the non-GAAP items.
45
Consolidated Adjusted EBITDA (non-GAAP) - Continuing Operations
13 weeks ended26 weeks ended
Dollars in thousandsOctober 28, 2023October 29, 2022October 28, 2023October 29, 2022
Net income (loss) from continuing operations (a)
$24,854 $24,168 $(25,117)$(26,154)
Add:
Depreciation and amortization expense10,175 10,256 20,428 21,152 
Interest expense, net (b)
10,664 4,886 18,918 8,754 
Income tax expense (benefit) 314 (383)303 464 
Content amortization (non-cash)
— — — 26 
Restructuring and other charges (c)
4,274 260 8,907 635 
Adjusted EBITDA (Non-GAAP) - Continuing Operations$50,281 $39,187 $23,439 $4,877 
Adjusted EBITDA (Non-GAAP) - Discontinued Operations$(643)$180 $(216)$1,069 
Adjusted EBITDA (Non-GAAP) - Total$49,638 $39,367 $23,223 $5,946 
(a)     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. Net Loss from Continuing Operations excludes the results of operations related to the DSS Segment for all years reported above.
(b)    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.
(c)    See Management Discussion and Analysis and Results of Operations discussion above.

The following is Adjusted EBITDA - Continuing Operations by Segment for the 13 and 26 weeks ended October 28, 2023 and October 29, 2022.
Adjusted EBITDA - by Segment13 weeks ended October 28, 2023
Dollars in thousandsRetailWholesale
Corporate Services(b)
EliminationsTotal
Net income (loss) from continuing operations (a)
$39,407 $1,344 $(20,520)$4,623 $24,854 
Add:
Depreciation and amortization expense8,911 1,254 10 — 10,175 
Interest expense, net— — 10,664 — 10,664 
Income tax expense— — 314 — 314 
Restructuring and other charges (c)
29 — 4,245 — 4,274 
Adjusted EBITDA (non-GAAP)$48,347 $2,598 $(5,287)$4,623 $50,281 
Adjusted EBITDA - by Segment13 weeks ended October 29, 2022
Dollars in thousandsRetailWholesale
Corporate Services(b)
EliminationsTotal
Net income (loss) from continuing operations (a)
$30,547 $218 $(9,855)$3,258 $24,168 
Add:
Depreciation and amortization expense8,869 1,370 17 — 10,256 
Interest expense, net— — 4,886 — 4,886 
Income tax benefit— — (383)— (383)
Content amortization (non-cash)— — — — — 
Restructuring and other charges (c)
— — 260 — 260 
Adjusted EBITDA (non-GAAP)$39,416 $1,588 $(5,075)$3,258 $39,187 
46
Adjusted EBITDA - by Segment26 weeks ended October 28, 2023
Dollars in thousandsRetailWholesale
Corporate Services(b)
EliminationsTotal
Net income (loss) from continuing operations (a)
$11,033 $1,947 $(37,272)$(825)$(25,117)
Add:
Depreciation and amortization expense17,877 2,531 20 — 20,428 
Interest expense, net— — 18,918 — 18,918 
Income tax expense— — 303 — 303 
Restructuring and other charges (c)
555 526 7,826 — 8,907 
Adjusted EBITDA (non-GAAP)$29,465 $5,004 $(10,205)$(825)$23,439 
Adjusted EBITDA - by Segment26 weeks ended October 29, 2022
Dollars in thousandsRetailWholesale
Corporate Services(b)
EliminationsTotal
Net (loss) income from continuing operations (a)
$(3,993)$1,637 $(22,177)$(1,621)$(26,154)
Add:
Depreciation and amortization expense18,398 2,719 35 — 21,152 
Interest expense, net— — 8,754 — 8,754 
Income tax expense— — 464 — 464 
Content amortization (non-cash)26 — — — 26 
Restructuring and other charges (c)
— — 635 — 635 
Adjusted EBITDA (non-GAAP)$14,431 $4,356 $(12,289)$(1,621)$4,877 
(a)     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. Net Loss from Continuing Operations excludes the results of operations related to the DSS Segment for all years reported above.
(b)    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.
(c)    See Management Discussion and Analysis and Results of Operations discussion above.
Adjusted EBITDA (non-GAAP) - Discontinued Operations13 weeks ended26 weeks ended
October 28, 2023October 29, 2022October 28, 2023October 29, 2022
Loss from discontinued operations (a)
$(674)$(2,024)$(1,091)$(4,409)
Add:
Depreciation and amortization expense3 503 3 2,140 
Income tax expense— 83 20 169 
Content amortization (non-cash) — 1,618 — 3,169 
Gain on sale of business— — (3,068)— 
Impairment loss (non-cash) — — 610 — 
Restructuring and other charges 10 — 3,297 — 
Transaction costs18 — 13 — 
Adjusted EBITDA (Non-GAAP) - Discontinued Operations$(643)$180 $(216)$1,069 
(a)     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. Net Loss from Continuing Operations excludes the results of operations related to the DSS Segment for all years reported above. For additional information, see Note 2. Summary of Significant Accounting Policies.
47
Free Cash Flow (non-GAAP)
13 weeks ended26 weeks ended
Dollars in thousandsOctober 28, 2023October 29, 2022October 28, 2023October 29, 2022
Net cash flows provided by (used in) operating activities from continuing operations$72,698 $38,680 $(47,160)$10,073 
Less:
Capital expenditures (a)
3,977 9,293 8,196 16,823 
Cash interest7,576 4,368 13,972 7,301 
Cash taxes43 (15,705)388 (15,583)
Free Cash Flow (non-GAAP)$61,102 $40,724 $(69,716)$1,532 
(a) 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 Expenditures13 weeks ended26 weeks ended
Dollars in thousandsOctober 28, 2023October 29, 2022October 28, 2023October 29, 2022
Physical store capital expenditures$1,743 $6,052 $3,948 $10,548 
Product and system development1,697 2,689 3,460 5,175 
Other537 552 788 1,100 
Total Capital Expenditures$3,977 $9,293 $8,196 $16,823 

Liquidity and Capital Resources
The accompanying condensed consolidated financial statements are prepared in accordance with U.S. GAAP applicable to a going concern. This presentation contemplates the realization of assets and the satisfaction of liabilities in the normal course of business and does not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described below.
Pursuant to ASC 205-40, Presentation of Financial Statements — Going Concern (“ASC 205-40”), management must evaluate whether there are conditions and events, considered in aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that these condensed consolidated financial statements are issued. In accordance with ASC 205-40, management’s analysis can only include the potential mitigating impact of management’s plans that have not been fully implemented as of the issuance date of these condensed consolidated financial statements if (a) it is probable that management’s plans will be effectively implemented on a timely basis, and (b) it is probable that the plans, when implemented, will alleviate the relevant conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern.
Our primary sources of cash are net cash flows from operating activities, funds available under our Credit Agreement, Term Loan Agreement, and short-term vendor financing. Our liquidity is highly dependent on the seasonal nature of our business, particularly with respect to course material sales, as sales are generally highest in the second and third fiscal quarters, when college students generally purchase textbooks for the upcoming Fall and Spring semesters, respectively. As of October 28, 2023, we had $35.3 million of cash on hand, including $20.3 million of restricted cash related to segregated funds for commission due to Lids for logo merchandise sales as per the F/L Relationship-related agreements.
Our business was significantly negatively impacted by the COVID-19 pandemic during the years ended April 30, 2022 and May 1, 2021, as many schools adjusted their learning models and on-campus activities. Although most academic institutions have since reopened after the COVID-19 pandemic, the lingering impacts of the pandemic have resulted in changes in customer behaviors, lower enrollments, and an evolving educational landscape which continued to impact our financial results during the year ended April 29, 2023. Some institutions are still providing alternatives to traditional in-person instruction, including online and hybrid learning options and significantly reduced classroom sizes. The impact of COVID-19 store closings, as well as lower earnings during the year ended April 29, 2023, resulted in the loss of cash flows and increased borrowings that we would not otherwise have expected to incur.
48
We recognized Net Income from Continuing Operations of $24.9 million and $24.2 million for the 13 weeks ended October 28, 2023 and October 29, 2022, respectively, and a Net Loss from Continuing Operations of $(25.1) million and $(26.2) million for the 26 weeks ended October 28, 2023 and October 29, 2022, respectively, and we incurred a Net Loss from Continuing Operations of $(90.1) million, $(61.6) million, and $(133.6) million for the years ended April 29, 2023, April 30, 2022, and May 1, 2021, respectively. Our Cash Flow (Used In) Provided by Operating Activities from Continuing Operations were $(47.2) million and $10.1 million for the 26 weeks ended October 28, 2023 and October 29, 2022, respectively, and were $90.5 million, $(16.2) million, and $27.0 million, for the years ended April 29, 2023, April 30, 2022, and May 1, 2021, respectively. The tightening of our available credit commitments, including the elimination and repayment of our FILO Facility in fiscal year 2023 of $40.0 million, had a significant impact on our liquidity during fiscal year 2023 and fiscal year 2024, including our ability to make timely vendor payments and school commission payments.
Our losses and projected cash needs, combined with our current liquidity level, raised substantial doubt about our ability to continue as a going concern as of the year ended April 29, 2023, which Management subsequently remediated by implementing a plan to improve the Company’s liquidity and successfully alleviate substantial doubt including (1) raising additional liquidity and (2) taking additional operational restructuring actions.
Debt amendments
On July 28, 2023, we amended our existing Credit Agreement to (i) extend the maturity date of the Credit Agreement to December 28, 2024, (ii) reduce advance rates with respect to the borrowing base by 1000 basis points on September 2, 2024 (in lieu of the reductions previously contemplated for September 2023), (iii) subject to the conditions set forth in such amendment, add a CARES Act tax refund claim to the borrowing base, from April 1, 2024 through July 31, 2024, (iv) amend the financial maintenance covenant to require Availability (as defined in the Credit Agreement) at all times greater than the greater of (x) 10% of the Aggregate Loan Cap (as defined in the Credit Agreement) and (y) (A) $32.5 million minus, subject to the conditions set forth in such amendment, (B) (a) $7.5 million for the period of April 1, 2024 through and including April 30, 2024, (b) $2.5 million for the period of May 1, 2024 through and including May 31, 2024 and (c) $0 at all other times, (v) add a minimum Consolidated EBITDA (as defined in the Credit Agreement) financial maintenance covenant, and (vi) amend certain negative and affirmative covenants and add certain additional covenants, all as more particularly set forth in such amendment. The amendment also requires that we appoint a Chief Restructuring Officer and that, by August 11, 2023, we (i) appoint two independent members to the board of directors of the Company from prospective candidates that have been previously disclosed to the Administrative Agent and the Lenders and (ii) appoint a committee of the board of directors of the Company to consist of three board members (two of whom will be the new independent directors), and as of the date of this filing, we have satisfied such requirements. The committee’s responsibilities will include, among other things, to explore, consider, solicit expressions of interest or proposals for, respond to any communications, inquiries or proposals regarding, and advise as to all strategic alternatives to effect a “Specified Liquidity Transaction” (as defined in the Credit Agreement). There can be no guarantee or assurances that any such transaction or transactions be consummated. We must pay (i) a fee of 0.50% of the outstanding principal amount of the commitments under the Credit Agreement March 2023 amendment (as defined in the Credit Agreement) on the closing date (in lieu of the deferred fee previously contemplated in connection with the March 2023 amendment (as defined in the Credit Agreement)) and (ii) a fee of 1.00% of the outstanding principal amount of the commitments under the Credit Agreement as of the closing date on the earlier to occur of September 2, 2024 and an Event of Default (as defined in the Credit Agreement).
On July 28, 2023, we amended our Term Loan to (i) extend the maturity date of the Term Loan Agreement to April 7, 2025, (ii) allow for interest to be paid in kind until September 2, 2024, (iii) amend the 1.50% anniversary fee to recur on June 7 of each year that the Term Loan Agreement remains outstanding, with 2024 fee deferred to the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement) and (iv) amend certain negative covenants and affirmative and add certain additional covenants. We must pay a fee of $0.05 million to the lenders under the Term Loan Agreement on the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement).
On October 10, 2023, we amended our existing Credit Agreement to revise certain reporting requirements to the administrative agent and lenders under the Credit Agreement. The amendment introduced a Specified Liquidity Transaction Fee of $3.8 million that would become due and payable at the earlier to occur of (1) January 31, 2024, to the extent a Specified Liquidity Transaction (as defined in the Credit Agreement) has not been consummated prior to such date (or such later date that is up to thirty days thereafter to the extent agreed to in writing by the Administrative Agent in its sole discretion) or (b) an Event of Default under the Credit Agreement.
Operational restructuring plans
During Fiscal 2023, we implemented a significant cost reduction program designed to streamline our operations, maximize productivity and drive profitability. We reduced our workforce, eliminated duplicate administrative headcounts at all levels, implemented improved system development processes to reduce maintenance costs, reduced capital expenditures, and evaluated operating contractual obligations for cost savings. Over the last year, we have achieved annualized savings of $30 million to
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$35 million from these cost savings initiatives. Additionally, during Fiscal 2024, Management's planned to implement further cost savings measures, including reduction of gross capital expenditures, amounting to approximately $25 million, of which approximately $14 million has been achieved during the 26 weeks ended October 28, 2023. Management believes that these plans are within its control and will be focused on implementing as outlined.
During the 13 weeks ended October 28, 2023, Net Income from Continuing Operations increased by $0.7 million compared to the prior year period. Excluding interest expense and restructuring and other charges Net Income from Continuing Operations improved by $10.5 million during the 13 weeks ended October 28, 2023 compared to the prior year period. During the 26 weeks ended October 28, 2023, Net Loss from Continuing Operations decreased by $1.1 million compared to the prior year period. Excluding interest expense and restructuring and other charges Net Loss from Continuing Operations decreased by $19.5 million during the 26 weeks ended October 28, 2023 compared to the prior year period. The improvements in Net Income from Continuing Operations during the 13 and 26 weeks are primarily due to operational improvements and cost savings initiatives.
Management believes that the expected impact on our liquidity and cash flows resulting from the debt amendments and the operational initiatives outlined above are sufficient to enable the Company to meet its obligations for at least twelve months from the issuance date of these condensed consolidated financial statements and to continue to alleviate the conditions that initially raised substantial doubt about the Company's ability to continue as a going concern.
See Part I - Risk Factors - We are dependent upon access to the capital markets, bank credit facilities, and short-term vendor financing for liquidity needs in our Annual Report on Form 10-K for the fiscal year ended April 29, 2023.
Sources and Uses of Cash Flow - Continuing Operations
 26 weeks ended
Dollars in thousandsOctober 28, 2023October 29, 2022
Net cash flows (used in) provided by operating activities from continuing operations
$(47,160)$10,073 
Net cash flows used in investing activities from continuing operations(8,118)(16,568)
Net cash flows provided by financing activities from continuing operations41,175 23,727 
Net change in cash, cash equivalents, and restricted cash from continuing operations$(14,103)$17,232 
As of October 28, 2023 and October 29, 2022, we had restricted cash of $20.3 million and $15.6 million, respectively, comprised of $19.4 million and $14.7 million, respectively, in prepaid and other current assets in the condensed consolidated balance sheet related to segregated funds for commission due to Lids for logo merchandise sales as per the Lids service provider merchandising agreement and $0.9 million for both periods in other noncurrent assets in the condensed consolidated balance sheet related to amounts held in trust for future distributions related to employee benefit plans.
Cash Flow from Operating Activities from Continuing Operations
Our business is highly seasonal. For our retail operations, cash flows from operating activities are typically a source of cash in the second and third fiscal quarters, when students generally purchase and rent textbooks and other course materials for the upcoming semesters based on the typical academic semester. Given the growth of our BNC First Day programs, the timing of cash collection from our school partners may shift to periods subsequent to when the revenue is recognized. When a school adopts our BNC First Day equitable and inclusive access offerings, cash collection from the school generally occurs after the institution's drop/add dates, which is later in the working capital cycle, particularly in our third quarter given the timing of the Spring Term and our quarterly reporting period, as compared to direct-to-student point-of-sale transactions where cash is generally collected during the point-of-sale transaction or within a few days from the credit card processor. As a higher percentage of our sales shift to BNC First Day equitable and inclusive access offerings, we are focused on efforts to better align the timing of our cash outflows to course material vendors with cash inflows collected from schools, including modifying payment terms in existing and future school contracts. For our wholesale operations, cash flows from operating activities are typically a source of cash in the second and third fiscal quarters, as payments are received from the summer and winter selling season when our wholesale business sell textbooks and other course materials for retail distribution. For both retail and wholesale, cash flows from operating activities are typically a use of cash in the fourth fiscal quarter, when sales volumes are materially lower than the other quarters. Our quarterly cash flows also may fluctuate depending on the timing of the start of the various school’s semesters, as well as shifts in our fiscal calendar dates. These shifts in timing may affect the comparability of our results across periods.
Cash flows used in operating activities from continuing operations during the 26 weeks ended October 28, 2023 were $(47.2) million compared to cash flows provided by operating activities of $10.1 million during the 26 weeks ended October 29, 2022. This decrease in cash flows used in operating activities from continuing operations of $57.3 million was
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primarily due to changes in working capital, including higher accounts receivables of $56.0 million and higher inventory levels of $34.6 million primarily related to our increased adoption of our BNC First Day equitable and inclusive access sales for Fall term; higher payments for interest expense of $6.7 million; offset by higher payables of $28.2 million due to delayed payments to vendors for inventory purchases and expenses, which were delayed resulting from lower borrowing base availability.
Cash Flow from Investing Activities from Continuing Operations
Cash flows used in investing activities from continuing operations during the 26 weeks ended October 28, 2023 were $(8.1) million compared to $(16.6) million during the 26 weeks ended October 29, 2022. The decrease in cash used in investing activities is primarily due to lower capital expenditures and contractual capital investments, enhancements to internal systems and websites, and new store construction. Capital expenditures totaled $8.2 million and $16.8 million during the 26 weeks ended October 28, 2023 and October 29, 2022, respectively.
Cash Flow from Financing Activities from Continuing Operations
Cash flows provided by financing activities from continuing operations during the 26 weeks ended October 28, 2023 were $41.2 million compared to $23.7 million during the 26 weeks ended October 29, 2022. This net change of $17.4 million is primarily due to higher net borrowings of $24.4 million, partially offset by higher payments for deferred financing costs of $7.7 million.
Financing Arrangements
As of
Maturity Date
October 28, 2023October 29, 2022
Credit FacilityDecember 28, 2024$204,881 $222,000 
Term LoanApril 7, 202530,863 30,000 
sub-total235,744 252,000 
Less: Deferred financing costs(1,871)(1,555)
Total debt$233,873 $250,445 
Balance Sheet classification:
Short-term borrowings$— $— 
Long-term borrowings233,873 250,445 
Total debt$233,873 $250,445 
Credit Facility
We have a credit agreement (the “Credit Agreement”), amended from time to time including on October 10, 2023, July 28, 2023, May 24, 2023, March 8, 2023, March 31, 2021 and March 1, 2019, under which the lenders originally committed to provide us with a 5 year asset-backed revolving credit facility in an aggregate committed principal amount of $400.0 million (the “Credit Facility”) effective from the March 1, 2019 amendment. We had the option to request an increase in commitments under the Credit Facility of up to $100.0 million, subject to certain restrictions. Proceeds from the Credit Facility are used for general corporate purposes, including seasonal working capital needs. The agreement included an incremental first in, last out seasonal loan facility (the “FILO Facility”) for a $100.0 million maintaining the maximum availability under the Credit Agreement at $500.0 million. As of July 31, 2022, the FILO Facility was repaid and eliminated according to its terms and future commitments under the FILO Facility were reduced to $0.
March 2023 Credit Agreement Amendment
On March 8, 2023, we amended our existing Credit Agreement to (i) extend the maturity date of the Credit Agreement by six months to August 29, 2024, (ii) reduce the commitments under the Credit Agreement by $20.0 million to $380.0 million, (iii) increase the applicable margin with respect to the interest rate under the Credit Agreement to 3.375% per annum, in the case of interest accruing based on a Secured Overnight Financing Rate, and 2.375%, in the case of interest accruing based on an alternative base rate, in each case, without regard to a pricing grid, (iv) reduce advance rates with respect to the borrowing base (x) by 500 basis points upon the achievement of certain liquidity events, which may include a sale of equity interests or of assets (a “Specified Event”), or, if such a Specified Event shall not have occurred, on May 31, 2023 (see discussion below) and (y) by an additional 500 basis points on September 29, 2023, (v) amend certain negative covenants and add certain additional covenants, (vi) amend the financial maintenance covenant to require Availability (as defined in the Credit Agreement) to be at all times greater than the greater of 10% of the Aggregate Loan Cap (as defined in the Credit Agreement) and $32.5 million and (vii) require repayment of the loans under the Credit Agreement upon a Specified Event. For additional information related to
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the Credit Agreement amendment, see the Company’s Report on Form 8-K dated March 8, 2023 and filed with the SEC on March 9, 2023.
As noted above, the amendment requires the achievement of a Special Event by no later than May 31, 2023 (as such date may be extended pursuant to the terms of the Credit Agreement). See Note 2. Summary of Significant Accounting Policies for information related to the sale of our DSS segment on May 31, 2023.
We paid a fee of 0.25% of the outstanding principal amount of the commitments under the Credit Agreement on the amendment closing date and we will pay an additional fee of 1.00% of the outstanding principal amount of the commitments under the Credit Agreement on September 29, 2023.
During the 52 weeks ended April 29, 2023, we incurred debt issuance costs totaling $4.1 million related to the March 2023 Credit Agreement amendment. The debt issuance costs have been deferred and are presented as prepaid and other current assets and other noncurrent assets in the condensed consolidated balance sheets, and subsequently amortized ratably over the term of the credit agreement.
May 2023 Credit Agreement Amendment
On May 24, 2023, we amended our existing Credit Agreement to (i) increase the applicable margin with respect to the interest rate under the Credit Agreement to 3.75% per annum, in the case of interest accruing based on SOFR, and 2.75%, in the case of interest accruing based on an alternative base rate, in each case, without regard to a pricing grid, (ii) defer the reduction of advance rates used to calculate our borrowing capacity by an amount equal to 500 basis points previously required on May 31, 2023 to September 1, 2023, (iii) require cash flow reporting and variance testing commencing June 3, 2023 and (iv) defer partial prepayment of the term loan from the DSS segment sale proceeds to September 1, 2023. We did not incur debt issuance costs related to the May 2023 Credit Agreement amendment. For additional information related to the Credit Agreement amendment, see the Company’s Report on Form 8-K dated May 24, 2023 and filed with the SEC on May 31, 2023.
July 2023 Credit Agreement Amendment
On July 28, 2023, we amended our existing Credit Agreement to (i) extend the maturity date of the Credit Agreement to December 28, 2024, (ii) reduce advance rates with respect to the borrowing base by 1000 basis points on September 2, 2024 (in lieu of the reductions previously contemplated for September 2023), (iii) subject to the conditions set forth in such amendment, add a CARES Act tax refund claim to the borrowing base, from April 1, 2024 through July 31, 2024, (iv) amend the financial maintenance covenant to require Availability (as defined in the Credit Agreement) at all times greater than the greater of (x) 10% of the Aggregate Loan Cap (as defined in the Credit Agreement) and (y) (A) $32.5 million minus, subject to the conditions set forth in such amendment, (B) (a) $7,500 for the period of April 1, 2024 through and including April 30, 2024, (b) $2,500 for the period of May 1, 2024 through and including May 31, 2024 and (c) $0 at all other times, (v) add a minimum Consolidated EBITDA (as defined in the Credit Agreement) financial maintenance covenant, and (vi) amend certain negative and affirmative covenants and add certain additional covenants, all as more particularly set forth in such amendment. The amendment also requires that we appoint a Chief Restructuring Officer and that, by August 11, 2023, we (i) appoint two independent members to the board of directors of the Company from prospective candidates that have been previously disclosed to the Administrative Agent and the Lenders and (ii) appoint a committee of the board of directors of the Company to consist of three board members (two of whom will be the new independent directors). The committee’s responsibilities will include, among other things, to explore, consider, solicit expressions of interest or proposals for, respond to any communications, inquiries or proposals regarding, and advise as to all strategic alternatives to effect a “Specified Liquidity Transaction” (as defined in the Credit Agreement). There can be no guarantee or assurances that any such transaction or transactions be consummated. We must pay (i) a fee of 0.50% of the outstanding principal amount of the commitments under the Credit Agreement March 2023 amendment (as defined in the Credit Agreement) on the closing date (in lieu of the deferred fee previously contemplated in connection with the March 2023 amendment (as defined in the Credit Agreement)) and (ii) a fee of 1.00% of the outstanding principal amount of the commitments under the Credit Agreement as of the closing date on the earlier to occur of September 2, 2024 and an Event of Default (as defined in the Credit Agreement). For additional information related to the Credit Agreement amendment, see the Company's Report on Form 8-K filed with the SEC on July 28, 2023.
During the 26 weeks ended October 28, 2023, we incurred debt issuance costs totaling $11.5 million related to the July 2023 Credit Agreement amendment. The debt issuance costs have been deferred and are presented as prepaid and other current assets and other noncurrent assets in the condensed consolidated balance sheets, and subsequently amortized ratably over the term of the credit agreement.
October 2023 Credit Agreement Amendment
On October 10, 2023, we amended our existing Credit Agreement to amend certain reporting requirements to the administrative agent and lenders under the Credit Agreement. The amendment introduced a Specified Liquidity Transaction Fee of $3.8 million that would become due and payable at the earlier to occur of (1) January 31, 2024, to the extent a Specified Liquidity Transaction (as defined in the Credit Agreement) has not been consummated prior to such date (or such later date that
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is up to thirty days thereafter to the extent agreed to in writing by the Administrative Agent in its sole discretion) or (b) an Event of Default under the Credit Agreement. During the 26 weeks ended October 28, 2023, we incurred debt issuance costs totaling $1.4 million related to the October 2023 Credit Agreement amendment.
As of October 28, 2023, and through the date of this filing, we were in compliance with all debt covenants under the Credit Agreement.
The Credit Facility is secured by substantially all of the inventory, accounts receivable and related assets of the borrowers under the Credit Facility. This is considered an all asset lien (inclusive of proceeds from tax refunds payable to the Company and a pledge of equity from subsidiaries, exclusive of real estate).
During the 26 weeks ended October 28, 2023, we borrowed $284.7 million and repaid $234.0 million under the Credit Agreement, and had outstanding borrowings of $204.9 million as of October 28, 2023, comprised entirely of borrowings under the Credit Facility. During the 26 weeks ended October 29, 2022, we borrowed $318.2 million and repaid $321.9 million under the Credit Agreement, and had outstanding borrowings of $222.0 million as of October 29, 2022, comprised entirely of borrowings under the Credit Facility. As of October 28, 2023 and October 29, 2022, we have issued $0.5 million and $4.8 million, respectively, in letters of credit under the Credit Facility.
Term Loan
On June 7, 2022, we entered into a Term Loan Credit Agreement (the “Term Loan Credit Agreement”) with TopLids LendCo, LLC and Vital Fundco, LLC and we entered into an amendment to our existing Credit Agreement, which permitted us to incur the Term Loan Facility (as defined below). For additional information, see the Company’s Report on Form 8-K dated June 7, 2022 and filed with the SEC on June 10, 2022.
The Term Loan Credit Agreement provides for term loans in an amount equal to $30.0 million (the “Term Loan Facility” and, the loans thereunder, the “Term Loans”) and matures on April 7, 2025. The proceeds of the Term Loans are being used to finance working capital, and to pay fees and expenses related to the Term Loan Facility. During the 26 weeks ended October 28, 2023, we incurred $0.9 million for interest in kind on the Term Loan and repaid $0 under the Term Loan Credit Agreement, with $30.9 million of outstanding borrowings as of October 28, 2023. During the 26 weeks ended October 29, 2022, we borrowed $30.0 million and repaid $0 under the Term Loan Credit Agreement, with $30.0 million of outstanding borrowings as of October 29, 2022.
March 2023 Term Loan Credit Agreement Amendment
On March 8, 2023, we amended the Term Loan Credit Agreement to (i) extend the maturity date of the Term Loan Credit Agreement by six months to December 7, 2024, (ii) permit the application of certain proceeds to the repayment of the loans under Credit Agreement and (iii) amend certain negative covenants and add certain additional covenants to conform to the Credit Agreement. In addition, the amendment requires the achievement of a Specified Event (as described above) by no later than May 31, 2023 (as such date may be extended under the Credit Agreement, but no later than August 31, 2023 without consent from lenders under the Term Loan Credit Agreement). For additional information, see the Company's Report on Form 8-K dated March 8, 2023 and filed with the SEC on March 9, 2023.
During the 52 weeks ended April 29, 2023, we incurred debt issuance costs totaling $0.4 million related to the March 2023 Term Loan Credit Agreement amendment. We paid a fee of $0.05 million on the amendment closing date to the lenders under the Term Loan Credit Agreement. The debt issuance costs have been deferred and are presented as prepaid and other current assets and other noncurrent assets in the condensed consolidated balance sheets, and subsequently amortized ratably over the term of the credit agreement.
July 2023 Term Loan Credit Agreement Amendment
On July 28, 2023, we amended our Term Loan to (i) extend the maturity date of the Term Loan Agreement to April 7, 2025, (ii) allow for interest to be paid in kind until September 2, 2024, (iii) amend the 1.50% anniversary fee to recur on June 7 of each year that the Term Loan Agreement remains outstanding, with 2024 fee deferred to the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement) and (iv) amend certain negative covenants and affirmative and add certain additional covenants. We must pay a fee of $0.05 million to the lenders under the Term Loan Agreement on the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement). For additional information, see the Company's Report on Form 8-K filed with the SEC on July 28, 2023.
During the 26 weeks ended October 28, 2023, we incurred debt issuance costs totaling $0.4 million related to the July 2023 Term Loan Credit Agreement amendment. The debt issuance costs have been deferred and are presented as a reduction to long-term borrowings in the consolidated balance sheets, and subsequently amortized ratably over the term of the Term Loan Facility.
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The Term Loans accrue interest at a rate equal to 11.25%, payable quarterly. All interest on the Term Loan prior to the July 29, 2023 was paid in cash. During the 13 weeks ended October 28, 2023, all interest on the Term Loan was incurred in kind as permitted under the July 2023 Term Loan Amendment. The Term Loans do not amortize prior to maturity.
The Term Loan Credit Agreement does not contain a financial covenant, but otherwise contains representations and warranties, covenants and events of default that are substantially the same as those in the Credit Agreement, including restrictions on the ability of the Company and its subsidiaries to incur additional debt, incur or permit liens on assets, make investments and acquisitions, consolidate or merge with any other company, engage in asset sales and make dividends and distributions. The Term Loan Facility is secured by second-priority liens on all assets securing the obligations under the Credit Agreement, which is all of the assets of the Company and the Guarantors, subject to customary exclusions and limitations set forth in the Term Loan Credit Agreement and the other loan documents executed in connection therewith.
The Credit Agreement amendment permitted us to incur the Term Loan Facility and also provides that, upon repayment of the Term Loan Credit Agreement (and, if applicable, any replacement credit facility thereof), we may incur second lien secured debt in an aggregate principal amount not to exceed $75.0 million.
Interest Expense
During the 13 weeks ended October 28, 2023 and October 29, 2022, we recognized interest expense of $10.7 million and $4.9 million, respectively, and during the 26 weeks ended October 28, 2023 and October 29, 2022, we recognized interest expense of $18.9 million and $8.8 million, respectively. Cash interest paid during the 26 weeks ended October 28, 2023 and October 29, 2022 was $14.0 million and $7.3 million, respectively.
Income Tax Implications on Liquidity
For the fiscal year ended April 30, 2022, we filed an application to change our tax year from January to April under the automatic consent provisions. As a result of the tax year-end change, there is no longer a long-term tax payable associated with the LIFO reserve in other long-term liabilities.
As of October 28, 2023, we recognized a current income tax receivable for net operating loss carrybacks in prepaid and other current assets on the condensed consolidated balance sheet. We received refunds of $7.8 million in Fiscal 2022 and a $15.8 million refund in Fiscal 2023. We expect to receive additional refunds of approximately $10.0 million.
Share Repurchases
During the 13 and 26 weeks ended October 28, 2023, we did not repurchase any of our Common Stock under the stock repurchase program. As of October 28, 2023, approximately $26.7 million remains available under the stock repurchase program.
During the 13 and 26 weeks ended October 28, 2023, we repurchased 66,852 and 144,750 of our Common Stock, respectively, outside of the stock repurchase program in connection with employee tax withholding obligations for vested stock awards.
Contractual Obligations
Our projected contractual obligations are consistent with amounts disclosed in Part II - Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources in our Annual Report on Form 10-K for the fiscal year ended April 29, 2023.
Off-Balance Sheet Arrangements
As of October 28, 2023, we have no off-balance sheet arrangements as defined in Item 303 of Regulation S-K.
Critical Accounting Policies
Our policies regarding the use of estimates and other critical accounting policies are consistent with the disclosures in Part II - Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates in our Annual Report on Form 10-K for the fiscal year ended April 29, 2023.
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Disclosure Regarding Forward-Looking Statements
This quarterly report on Form 10-Q 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 Form 10-Q 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 service provider relationships, 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 Relationship”), and the potential for adverse operational and financial changes to these strategic service provider relationships, may adversely impact our business;
•non-renewal of managed bookstore, physical and/or online store contracts and higher-than-anticipated store closings;
•decisions by 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;
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•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, service providers, and campus partners, and the effectiveness of our response to these risks;
•lingering impacts that public health crises may have on the ability of our suppliers to manufacture or source products, particularly from outside of the United States;
•changes in applicable domestic and international laws, rules or regulations, including, without limitation, U.S. tax reform, changes in tax rates, laws and regulations, as well as related guidance;
•changes in and enactment of applicable laws, rules or regulations or changes in enforcement practices including, without limitation, with regard to consumer data privacy rights, which may restrict or prohibit our use of consumer personal information for texts, emails, interest based online advertising, or similar marketing and sales activities;
•adverse results from litigation, governmental investigations, tax-related proceedings, or audits;
•changes in accounting standards; and
•the other risks and uncertainties detailed in the section titled “Risk Factors” in Part I - Item 1A in our Annual Report on Form 10-K for the fiscal year ended April 29, 2023.
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 Form 10-Q. 
Item 3:    Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes to the items discussed in Part II - Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our Annual Report on Form 10-K for the fiscal year ended April 29, 2023.
Item 4:    Controls and Procedures
Evaluation of Disclosure Controls and Procedures
An evaluation (as required under Rules 13a-15(b) and 15d-15(b) under the Exchange Act) was performed under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth in the Company’s periodic reports. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective at the reasonable assurance level as of October 28, 2023.
Management has not identified any changes in the Company’s internal control over financial reporting that occurred during the second quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
56
PART II - OTHER INFORMATION
 
Item 1.    Legal Proceedings
We are involved in a variety of claims, suits, investigations and proceedings that arise from time to time in the ordinary course of our business, including actions with respect to contracts, intellectual property, taxation, employment, benefits, personal injuries and other matters. We record a liability when we believe that it is both probable that a loss has been incurred and the amount of loss can be reasonably estimated. Based on our current knowledge, we do not believe that there is a reasonable possibility that the final outcome of any pending or threatened legal proceedings to which we or any of our subsidiaries are a party, either individually or in the aggregate, will have a material adverse effect on our future financial results. However, legal matters are inherently unpredictable and subject to significant uncertainties, some of which are beyond our control. As such, there can be no assurance that the final outcome of these matters will not materially and adversely affect our business, financial condition, results of operations or cash flows.
Item 1A. Risk Factors
There have been no material changes during the 26 weeks ended October 28, 2023 to the risk factors discussed in Part I - Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended April 29, 2023.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
The following table provides information as of October 28, 2023 with respect to shares of Common Stock we purchased during the second quarter of Fiscal 2024:
PeriodTotal Number of Shares PurchasedAverage Price Paid per Share (a)Total Number of Shares Purchased as Part of Publicly Announced Plans or ProgramsApproximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
August 30, 2023 - August 26, 2023— $— — $26,669,324 
August 27, 2023 - September 30, 2023— $— — $26,669,324 
October 1, 2023 - October 28, 2023— $— — $26,669,324 
— $— — 
(a)     This amount represents the average price paid per common share. This price includes a per share commission paid for all repurchases.
During the 13 and 26 weeks ended October 28, 2023, we did not repurchase any shares of our Common Stock under the stock repurchase program.
During the 13 and 26 weeks ended October 28, 2023, we repurchased 66,852 and 144,750 shares of our Common Stock, respectively, outside of the stock repurchase program in connection with employee tax withholding obligations for vested stock awards.
Item 5. Other Information

Securities Trading Plans of Directors and Executive Officers
During the period covered by this Quarterly Report on Form 10-Q, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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Item 6.    Exhibits
101.INSXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCHXBRL Taxonomy Extension Schema Document
101.CALXBRL Taxonomy Extension Calculation Linkbase Document
101.DEFXBRL Taxonomy Extension Definition Linkbase Document
101.LABXBRL Taxonomy Extension Label Linkbase Document
101.PREXBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
* Filed herewith.
** Furnished herewith.

58
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.
 
BARNES & NOBLE EDUCATION, INC.
(Registrant)
By: 
/S/ KEVIN WATSON
 Kevin Watson
 Chief Financial Officer
 (principal financial officer)
By: 
/S/ SEEMA C. PAUL
 Seema C. Paul
 Chief Accounting Officer
 (principal accounting officer)


December 7, 2023

59
Exhibit 10.1

Execution Version
NINTH AMENDMENT TO CREDIT AGREEMENT

This NINTH AMENDMENT TO CREDIT AGREEMENT, dated as of October 10, 2023 (this “Amendment”), is by and among Bank of America, N.A., in its capacity as administrative agent and collateral agent for the Lenders, pursuant to the Existing Credit Agreement defined below (in such capacity, the “Administrative Agent”), the Lenders party hereto (which Lenders comprise Super-Majority Required Lenders under the Existing Credit Agreement as of the date hereof), Barnes & Noble Education, Inc., a Delaware corporation (the “Lead Borrower”), the other borrowers party hereto (collectively with the Lead Borrower, the “Borrowers”) and the other parties party hereto as “Guarantors” (collectively with the Borrowers, the “Loan Parties”). References herein to a Lender shall be deemed to include each such Lender in its capacity as an LC Issuer and/or the Swing Line Lender.
W I T N E S E T H :
WHEREAS, the Administrative Agent, certain financial institutions from time to time party thereto as lenders (collectively, the “Lenders”) and/or as agents, the Borrowers and the Guarantors are parties to that certain Credit Agreement, dated August 3, 2015 (as amended by that certain First Amendment to Credit Agreement, dated as of February 27, 2017, that certain Second Amendment, Waiver and Consent to Credit Agreement, dated as of March 1, 2019, that certain Third Amendment and Waiver to Credit Agreement and First Amendment to Security Agreement, dated as of March 31, 2021, that certain Fourth Amendment to Credit Agreement, dated as of March 7, 2022, that certain Fifth Amendment to Credit Agreement, dated as of June 7, 2022, that certain Sixth Amendment to Credit Agreement, dated as of March 8, 2023, that certain Seventh Amendment to Credit Agreement, dated as of May 24, 2023, that certain Eighth Amendment to Credit Agreement, dated as of July 28, 2023, and as further amended, restated, amended and restated, supplemented or modified prior to the effectiveness of this Amendment, the “Existing Credit Agreement”; capitalized terms used but not defined herein shall have the meanings set forth in the Existing Credit Agreement, as modified by this Amendment (the “Amended Credit Agreement”).
WHEREAS, the Borrowers have requested that the Administrative Agent and the Super-Majority Required Lenders agree to make certain amendments to the Existing Credit Agreement, as more specifically set forth herein.
WHEREAS, the Administrative Agent and the Super-Majority Required Lenders are willing to make certain amendments to the Existing Credit Agreement, all subject to the terms and conditions set forth herein, as more specifically set forth herein.
NOW THEREFORE, in consideration of the foregoing and the mutual agreements and covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1.    Approved Budget. On and after the Ninth Amendment Effective Date, each reference in the Amended Credit Agreement to the “Approved Budget” shall initially mean and be a reference to the cash flow forecast attached hereto as Annex I and thereafter shall mean, as of any date of determination, the most recently delivered Approved Budget Update.
2.    Amendments to Existing Credit Agreement. Subject to the terms and conditions hereof, including satisfaction of the conditions set forth in Section 4 of this Amendment, the Existing Credit Agreement is hereby amended as follows:
(a)    Section 1.01 (Defined Terms) of the Existing Credit Agreement is hereby amended to add the following defined terms in the appropriate alphabetical order:


““Cumulative Eight-Week Period” means, as of any date of determination, the eight-week period up to and through the Saturday of the most recent week then ended.”
““Cumulative Five-Week Period” means, as of any date of determination, the five-week period up to and through the Saturday of the most recent week then ended.”
““Ninth Amendment” means that certain Ninth Amendment to Credit Agreement, dated as of October 10, 2023, among the Loan Parties, the Administrative Agent and the Lenders party thereto.”
““University Contract Summary” has the meaning given to such term in the Ninth Amendment.”
(b)    Section 1.01 (Defined Terms) of the Existing Credit Agreement is hereby amended to amend and restate the following defined terms in their entirety:
“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person (including, with respect to the Administrative Agent, the Administrative Agent Consultant) and of such Person’s Affiliates.

(c)    Clause (d) of Section 6.10 (Inspection Rights; Consultants) of the Existing Credit Agreement is hereby amended to delete the reference to “PKF Clear Thinking, LLC and/or its Affiliates” and replace with “B.Riley Securities and/or its Affiliates”.
(d)    Clause (b) of Section 7.16 (Variance Covenant) of the Existing Credit Agreement is hereby amended and restated to read in its entirety as follows: “[Reserved]; and”.
(e)    Clause (c) of Section 7.16 (Variance Covenant) of the Existing Credit Agreement is hereby amended and restated in its entirety as follows:
“(c)    (1) Commencing as of the first full Cumulative Five-Week Period ending on October 7, 2023 (it being understood that for any historical period not reflected in the Approved Budget delivered on the Ninth Amendment Effective Date, the variance results with respect to Budgeted Disbursement Amounts, Budgeted Inventory Receipts and Budgeted Net Cash Flow shall be determined by reference to the immediately preceding Approved Budget) and with respect to each Cumulative Five-Week Period occurring thereafter, permit (i) Actual Disbursement Amounts for any Cumulative Five-Week Period to exceed the Budgeted Disbursement Amounts for such Cumulative Five-Week Period, as reflected in the applicable Approved Budget, by an amount greater than ten percent (10.0%) (it being understood and agreed that for purposes of determining compliance with the foregoing, payments of amendment fees, consent fees or other similar fees payable pursuant to the Loan Documents shall be disregarded), (ii) [reserved], (iii) Actual Inventory Receipts for any Cumulative Five-Week Period to be less than an amount equal to ninety percent (90.0%) of the Budgeted Inventory Receipts for such Cumulative Five-Week Period, as reflected in the applicable Approved Budget, and (iv) Actual Net Cash Flow for any Cumulative Five-Week Period (1) if projected to be a positive amount, to be less than an amount equal to ninety percent (90.0%) of the Budgeted Net Cash Flow for such Cumulative Five-Week Period and (2) if projected to be a negative amount, to be greater than ten percent (10.0%) of the Budgeted Net Cash Flow for such Cumulative Five-Week Period, each, as reflected in the applicable Approved Budget, in each case of the foregoing clauses (i) and (iii) solely with respect to BNCB; and
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(2)    commencing as of the first full Cumulative Eight-Week Period ending on October 7, 2023 (it being understood that for any historical period not reflected in the Approved Budget delivered on the Ninth Amendment Effective Date, the variance results with respect to Budgeted Cash Receipts shall be determined by reference to the immediately preceding Approved Budget) and with respect to each Cumulative Eight-Week Period occurring thereafter, permit Actual Cash Receipts for any Cumulative Eight-Week Period to be less than an amount equal to ninety percent (90.0%) of the Budgeted Cash Receipts for such Cumulative Eight-Week Period, in each case as reflected in the applicable Approved Budget solely with respect to BNCB.”
(f)    Section 6.19(d) (Teleconferences) of the Existing Credit Agreement is hereby amended and restated in its entirety as follows:
“(d)    At the Administrative Agent’s request, not less than weekly, the Loan Parties shall be available to conduct a telephonic meeting with the CRO and the Loan Parties’ other advisors in which the respective representatives of the Lead Borrower, each other Loan Party, the Administrative Agent and their respective advisors and counsel shall be entitled to participate, whereupon the Lead Borrower shall present, among other things, an update on the Loan Parties’ cash flow, changes in management and/or organizational structure, business operations, and financial performance and updates regarding (i) the Contingency Transition Plan and their efforts to obtain a Specified Liquidity Transaction, including parties contacted, diligence information provided, proposals received and the status of negotiation and documentation of such transaction, and the Lead Borrower shall promptly provide copies of any such proposals, commitments or other documents to the Administrative Agent and (ii) the University Contract Summary; provided however, the Loan Parties agree that, on a bi-weekly basis, the Lenders and their respective advisors and counsel shall be entitled to participate in any such telephonic meeting.”
(g)    Section 6.21 (Independent Board Members and Alternative Transactions Committee) is hereby amended to add the following new clause (d):
“(d)    Any Contingency Transition Plan developed, analyzed or implemented by the Alternative Transactions Committee shall be in consultation with the Administrative Agent Consultant. At the Administrative Agent’s request, not less than monthly, the Loan Parties shall cause the Alternative Transactions Committee to be available to discuss the Contingency Plan with the Administrative Agent Consultant, whereupon the Alternative Transactions Committee shall present, among other things, updates on the Contingency Transition Plan and their efforts to obtain a Specified Liquidity Transaction.”
3.    Post-Closing Covenants. The Loan Parties shall deliver (or shall cause to be delivered) the following documents or shall complete (or shall cause to be completed) the following tasks, as applicable, in each case no later than the dates specified below:
(a)    On or before November 30, 2023 (or such later date as determined by the Administrative Agent in writing in its reasonable discretion), the Loan Parties shall (or shall cause Investment Bank to) provide the Administrative Agent with copies of all contracts (or such lesser contracts mutually agreed to in writing by the Administrative Agent and the Lead Borrower) with any university or college (each, a “University”) for the operation or provision of bookstore services then in effect to which any Loan Party is a party, including all amendments and supplements thereto (each, a “University Contract” and collectively, the “University Contracts”).
(b)    On or before December 31, 2023 (or, subject to the proviso appearing at the end of this clause (b), such later date as determined by the Administrative Agent in writing in
3


its reasonable discretion), the Loan Parties shall (or shall cause Investment Bank to) provide the Administrative Agent with a completed written summary (in scope, form and substance reasonably acceptable to the Administrative Agent) of the University Contracts, on a contract-by-contract basis, and, unless otherwise agreed to by the Administrative Agent in its reasonable discretion, such summary shall include each of the following terms in respect of each University Contract (such summary, the “University Contract Summary”):
1.    Effective and expiration date, including a summary of the renewal terms (if any).
2.    A summary of each party’s termination rights (with and without cause and related notice provisions in respect thereof) and, in the event of any termination, the rights and obligations of each party, including:
a.    Repurchase obligations of University (including purchase price and/or transfer pricing for applicable inventory (including all used, new and rental inventory)).
b.    Return to vendor requirements, if any, and other affirmative obligations of the Loan Parties to mitigate damages to any such University.
c.    Restrictions on access rights to bookstore premises and/or use of electronic media.
3.    A summary of any restrictions on sales (including in respect of types of sales).
4.    A summary of ongoing payment obligations of any University owing to any Loan Party under each University Contract.
5.    A summary of bankruptcy provisions contained in any University Contract.
6.    Any other material term requested by the Administrative Agent in its reasonable discretion.
; provided that, if on or prior to December 31, 2023 (or such later date as determined by the Administrative Agent in writing in its reasonable discretion) the Administrative Agent shall have received a partially completed University Contract Summary covering at least fifty percent (50%) of the total University Contracts, the deadline for a fully completed University Contract Summary shall automatically be extended to January 31, 2024.
Notwithstanding anything to the contrary contained in the Amended Credit Agreement, the Loan Parties acknowledge and agree that the failure to comply with this Section 3 within the times provided herein shall constitute an immediate Event of Default under Section 8.01(b) of the Amended Credit Agreement.
4.    Conditions Precedent. This Amendment shall be effective on the date that each of the following conditions precedent are satisfied or waived by the Administrative Agent and the Super-Majority Required Lenders (the date of such satisfaction or waiver, the “Ninth Amendment Effective Date”):
(a)    the Administrative Agent shall have received each of the following documents or instruments each of which shall be originals, facsimiles or other electronic transmission (in the case of facsimiles or other electronic transmission followed promptly by originals) unless otherwise specified, in form and substance reasonably acceptable to the Administrative Agent:
4


(i)    this Amendment, duly executed and delivered by the Loan Parties, the Administrative Agent and each Super-Majority Required Lender; and
(ii)    that certain Ninth Amendment Fee Letter (“Ninth Amendment Fee Letter”), dated as of the date hereof, duly executed by the Lead Borrower and the Administrative Agent;
(b)    the Administrative Agent shall have received the new Approved Budget referenced in Section 1 above, which shall be in form and substance acceptable to the Administrative Agent in its sole discretion;
(c)    the Administrative Agent shall have received the forecasts required to be delivered under Section 6.01(d) of the Amended Credit Agreement for the Fiscal Years ending April 27, 2024 and April 26, 2025;
(d)    the Lead Borrower shall have paid all invoiced and accrued fees and reasonable and documented expenses of the Administrative Agent in respect of this Amendment (including but not limited to (i) the reasonable and documented fees and expenses of counsel to the Administrative Agent in respect of this Amendment and (ii) the fees described in the Ninth Amendment Fee Letter;
(e)    no order, injunction or judgment has been entered into prohibiting the closing of the Amendment or any of the transactions contemplated to occur pursuant hereto;
(f)    no Default or Event of Default shall have occurred or be continuing; and
(g)    all representations and warranties contained in this Amendment (including those made in Section 5 hereof) are true and correct on and as of the Ninth Amendment Effective Date.
For purposes of determining compliance with the conditions specified in this Section 4, each Lender that has signed this Amendment shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required hereunder to be consented to or approved by or acceptable or satisfactory to such Lender unless the Administrative Agent shall have received written notice from such Lender prior to the proposed Ninth Amendment Effective Date specifying its objection thereto.

5.    Representations and Warranties. In order to induce the Administrative Agent and the Lenders to enter into this Amendment, each Borrower and each other Loan Party hereby represents to the Administrative Agent and the Lenders as of the date hereof as follows:
(a)    Such Loan Party is duly authorized to execute and deliver this Amendment and is duly authorized to perform its obligations under the Amended Credit Agreement and the other Loan Documents to which it is a party.
(b)    The execution and delivery of this Amendment by such Loan Party does not and will not (i) contravene the terms of the Organization Documents of such Loan Party; (ii) conflict with or result in any breach or contravention of, or the creation of any Lien under (x) any Contractual Obligation to which such Loan Party is a party (other than Liens created under the Loan Documents in favor of the Administrative Agent for the ratable benefit of the Secured Parties (as defined in the Security Agreement) or (y) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Loan Party or its property is subject; or (iii) violate any applicable Law.
5


(c)    This Amendment is a legal, valid, and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar Laws relating to or affecting the rights and remedies of creditors or by general equitable principles.
(d)    As of the Ninth Amendment Effective Date and after giving effect to this Amendment, the representations and warranties of the Lead Borrower and each other Loan Party contained in Article V of the Amended Credit Agreement or any other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, (i) which are qualified by materiality shall be true and correct, and (ii) which are not qualified by materiality shall be true and correct in all material respects, in each case, on and as of the Ninth Amendment Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct, or true and correct in all material respects, as the case may be, as of such earlier date, and except that the representations and warranties contained in subsections (a) and (b) of Section 5.05 of the Amended Credit Agreement shall be deemed to refer to the most recent consolidated statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01 of the Amended Credit Agreement.
(e)    As of the Ninth Amendment Effective Date and after giving effect to this Amendment, each Loan Party has complied with and is in compliance with all of the covenants set forth in the Amended Credit Agreement, including those set forth in Article VI and Article VII of the Amended Credit Agreement.
(f)    As of the Ninth Amendment Effective Date, both immediately before and after giving effect to this Amendment, no Default or Event of Default has occurred and is continuing or would result herefrom.
6.    GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (EXCEPT FOR THE CONFLICT OF LAWS RULES THEREOF, BUT INCLUDING GENERAL OBLIGATIONS LAW SECTIONS 5-1401 AND 5-1402).
7.    Binding Effect. This Amendment shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns.
8.    Ratification and Reaffirmation.
(a)    Each Loan Party hereby consents to the amendments and modifications to the Existing Credit Agreement effected hereby, and confirms and agrees that, notwithstanding the effectiveness of this Amendment, each Loan Document to which such Loan Party is a party is, and the obligations of such Loan Party contained in the Existing Credit Agreement, as amended and modified hereby, or in any other Loan Documents to which it is a party are, and shall continue to be, in full force and effect and are hereby ratified and confirmed in all respects, in each case as amended and modified by this Amendment. Without limiting the generality of the foregoing, the execution of this Amendment shall not constitute a novation.
(b)    Each Loan Party hereby agrees and confirms that the Secured Obligations continue to be secured and guaranteed under and in accordance with the existing Loan Documents to which such Loan Party is a party, together with all other instruments and documents executed and delivered by such Loan Party as security for the Secured Obligations, and each such Loan Party hereby grants and re-grants to the Administrative Agent, for the ratable benefit of the Credit Parties, a security interest in all of such Loan Party’s right, title and interest in and to the Collateral (as defined in the Security Agreement), whether now owned or hereafter
6


acquired by such Loan Party, wherever located, and whether now or hereafter existing or arising, as security for the payment or performance, as the case may be, in full of the Secured Obligations.
(c)    Each Guarantor agrees that the Facility Guaranty (as defined in the Existing Credit Agreement) remains in full force and effect, and each Guarantor reaffirms the continued validity of, and ratifies, such Facility Guaranty, and agrees and confirms that its guarantee of the “Guaranteed Obligations” (as defined in the Existing Credit Agreement, and as amended by this Amendment) remains in full force and effect.
(d)    To the extent such Loan Party is named as a debtor in any UCC financing statement in favor of the Administrative Agent (collectively, the “Existing UCC Financing Statements”), such Loan Party hereby ratifies its prior authorization for the Administrative Agent to have filed such Existing UCC Financing Statement naming such Loan Party as debtor. 
9.    Acknowledgement.
(a)    The Loan Parties hereby reaffirm, acknowledge and agree that the Administrative Agent is entitled to engage and retain (directly or indirectly) one or more consultants or advisors from time to time in connection with the performance of its duties and obligations under the Loan Documents (including, at any time on or following the Ninth Amendment Effective Date), and the Loan Parties shall and shall cause its Subsidiaries to cooperate with such advisors and consultants in performing the scope of their respectful engagements.
(b)    Without limiting the Administrative Agent’s rights to implement other Reserves in accordance with the Credit Agreement, the Loan Parties specifically acknowledge and agree that the Administrative Agent may from time to time, in its Permitted Discretion, implement Availability Reserves to reflect claims and liabilities (including costs and expenses) that may need to be satisfied in connection with the realization upon the Collateral (including all such claims and liabilities (including costs and expenses) that may be incurred in connection with any insolvency or restructuring proceeding).
(c)    Each of the Administrative Agent and Lenders hereby acknowledges receipt of the 2L Amendment, and hereby consents and agrees to the amendments and modifications of the Subordinated Term Loan Agreement made pursuant thereto.
10.    Reference to and Effect on the Credit Agreement and the Loan Documents.
(a)    On and after the Ninth Amendment Effective Date, each reference in the Existing Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the Notes and each of the other Loan Documents to “the Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Amended Credit Agreement.
(b)    The Existing Credit Agreement and each of the other Loan Documents, as specifically amended and modified by this Amendment, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed.
(c)    The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver or novation of any right, power or remedy of any Lender, any L/C Issuer, any Swing Line Lender, the Collateral Agent or the Administrative Agent under any of the Loan Documents, nor constitute a waiver or novation of any provision of any of the Loan Documents.
7


(d)    The Administrative Agent, the Lenders and the Loan Parties agree that this Amendment shall be a Loan Document.
11.    Waiver, Modification, Etc. No provision or term of this Amendment may be modified, altered, waived, discharged or terminated orally, but only by an instrument in writing executed by the party against whom such modification, alteration, waiver, discharge or termination is sought to be enforced.
12.    Headings. The headings listed herein are for convenience only and do not constitute matters to be construed in interpreting this Amendment.
13.    Counterparts. This Amendment may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract, and shall become effective as to each party hereto. Delivery of an executed counterpart of a signature page of this Amendment by facsimile or other electronic imaging means (e.g., via electronic mail in .pdf form) shall be effective as delivery of a manually executed counterpart of this Amendment. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Amendment and/or any document to be signed in connection with this Amendment and the transactions contemplated hereby shall be deemed to include Electronic Signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity and enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be.
14.    Further Assurances. Each of the parties to this Amendment agrees that at any time and from time to time upon the written request of any other party, it will execute and deliver such further documents and do such further acts and things as such other party may reasonably request in order to effect the purposes of this Amendment.
15.    Release. In consideration of the agreements of the Administrative Agent and the Lenders contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Loan Party, on behalf of itself and its successors, assigns, and other legal representatives (each Loan Party and all such other Persons being hereinafter referred to collectively as the “Releasors” and individually as a “Releasor”), hereby absolutely, unconditionally and irrevocably releases, remises and forever discharges the Administrative Agent and the Lenders, and their successors and assigns, and their present and former shareholders, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, consultants, advisors, employees, agents and other representatives (the Administrative Agent and each other Lender and all such other Persons being hereinafter referred to collectively as the “Releasees” and individually as a “Releasee”), of and from all demands, actions, causes of action, suits, controversies, reckonings, damages and any and all other claims, counterclaims, defenses, rights of set-off, demands and liabilities whatsoever (individually, a “Claim” and collectively, “Claims”) of every name and nature, known or unknown, suspected or unsuspected, both at law and in equity, which any Releasor may now own, hold, have or claim to have against the Releasees or any of them for, upon, or by reason of any circumstance, action, cause or thing whatsoever which arises at any time on or prior to the day and date of this Amendment, in any way related to or in connection with the Existing Credit Agreement, Amended Credit Agreement or any of the other Loan Documents or transactions thereunder or related thereto. Each Loan Party understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release. Each Loan Party agrees that no fact, event, circumstance, evidence or transaction which could now be asserted or which may hereafter be discovered shall affect in any manner the final, absolute and unconditional nature of the release set forth above.
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[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
9


IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their authorized officers as of the day and year first above written.
BANK OF AMERICA, N.A., as Administrative Agent


By:    /s/ L. Daniel Menendez
    Name: L. Daniel Menendez
    Title: Vice President


Barnes & Noble Education, Inc.
Ninth Amendment to Credit Agreement
Signature Page



BANK OF AMERICA, N.A., as a Revolving Lender and as the Swing Line Lender


By:    /s/ L. Daniel Menendez
    Name: L. Daniel Menendez
    Title: Vice President

Barnes & Noble Education, Inc.
Ninth Amendment to Credit Agreement
Signature Page



JPMORGAN CHASE BANK, N.A., as a Revolving Lender


By:    /s/ Hai Nguyen
    Name: Hai Nguyen
    Title: Authorized Officer


Barnes & Noble Education, Inc.
Ninth Amendment to Credit Agreement
Signature Page



WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Revolving Lender

By:    /s/ Katelyn Murray
    Name: Katelyn Murray
    Title: Authorized Signatory


Barnes & Noble Education, Inc.
Ninth Amendment to Credit Agreement
Signature Page



TRUIST BANK, as successor by merger to SUNTRUST BANK, as a Revolving Lender


By:    /s/ Mark Bohntinsky
    Name: Mark Bohntinsky
    Title: Managing Director


Barnes & Noble Education, Inc.
Ninth Amendment to Credit Agreement
Signature Page



CITIZENS BANK, N.A., as a Revolving Lender


By:    /s/ Monirah J. Masud
    Name: Monirah J. Masud
    Title: Senior Vice President


Barnes & Noble Education, Inc.
Ninth Amendment to Credit Agreement
Signature Page



REGIONS BANK, as a Revolving Lender


By:    /s/ Bruce Kasper
    Name: Bruce Kasper
    Title: Managing Director


Barnes & Noble Education, Inc.
Ninth Amendment to Credit Agreement
Signature Page



CAPITAL ONE, NATIONAL ASSOCIATION,
as successor to CAPITAL ONE BUSINESS CREDIT CORP.,
as a Revolving Lender
By:    /s/Robert Johnson
Name: Robert Johnson
Title: Duly Authorized Signatory


Barnes & Noble Education, Inc.
Ninth Amendment to Credit Agreement
Signature Page



PNC BANK, NATIONAL ASSOCIATION,
as a Revolving Lender


By:    /s/ Paul L. Starman
Name: Paul L. Starman
Title: Vice President


Barnes & Noble Education, Inc.
Ninth Amendment to Credit Agreement
Signature Page



HSBC BANK USA, NATIONAL ASSOCIATION,
as a Revolving Lender

By:    /s/ Stephen Santini
Name: Stephen Santini
Title: Vice President
Barnes & Noble Education, Inc.
Ninth Amendment to Credit Agreement
Signature Page





LEAD BORROWER:

BARNES & NOBLE EDUCATION, INC., a Delaware corporation
By: /s/ Michael P. Huseby
Name:     Michael P. Huseby
Title:     Chief Executive Officer    


Barnes & Noble Education, Inc.
Ninth Amendment to Credit Agreement
Signature Page



BORROWERS:

B&N EDUCATION, LLC, a Delaware limited liability company
BARNES & NOBLE COLLEGE BOOKSELLERS, LLC, a Delaware limited liability company
BNED DIGITAL HOLDINGS, LLC, a Delaware limited liability company
BNED LOUDCLOUD, LLC, a Delaware limited liability company
BNED MBS HOLDINGS, LLC, a Delaware limited liability company (f/k/a Morocco Holdings, LLC)
MBS AUTOMATION LLC, a Delaware limited liability company
MBS DIRECT, LLC, a Delaware limited liability company
MBS INTERNET, LLC, a Delaware limited liability company
MBS SERVICE COMPANY LLC, a Delaware limited liability company
MBS TEXTBOOK EXCHANGE, LLC, a Delaware limited liability company
TEXTBOOKCENTER LLC, a Delaware limited liability company
TXTB.COM, LLC, a Delaware limited liability company

By: /s/ Michael P. Huseby
Name:     Michael P. Huseby
Title:     Chief Executive Officer    
    
    

    



Barnes & Noble Education, Inc.
Ninth Amendment to Credit Agreement
Signature Page




ANNEX I

Approved Budget

[On file with the Administrative Agent]







Exhibit 31.1
CERTIFICATION BY THE
CHIEF EXECUTIVE OFFICER PURSUANT TO
17 CFR 240.13a-14(a)/15(d)-14(a),
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Michael P. Huseby, certify that:
1.I have reviewed this report on Form 10-Q for the quarterly period ended October 28, 2023 of Barnes & Noble Education, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. 
Date: December 7, 2023
By: /s/ Michael P. Huseby
 Michael P. Huseby
 Chief Executive Officer
 Barnes & Noble Education, Inc.



Exhibit 31.2
CERTIFICATION BY THE
CHIEF FINANCIAL OFFICER PURSUANT TO
17 CFR 240.13a-14(a)/15(d)-14(a),
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Kevin Watson, certify that:
1.I have reviewed this report on Form 10-Q for the quarterly period ended October 28, 2023 of Barnes & Noble Education, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. 
Date: December 7, 2023
By: /s/ Kevin Watson
 Kevin Watson
 Chief Financial Officer
 Barnes & Noble Education, Inc.



Exhibit 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO
RULE 13a-14(b) UNDER THE SECURITIES EXCHANGE ACT OF 1934
AND 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of Barnes & Noble Education, Inc. (the “Company”) on Form 10-Q for the period ended October 28, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael P. Huseby, Chief Executive Officer of the Company, certify, to the best of my knowledge, pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
 
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Michael P. Huseby
Michael P. Huseby
Chief Executive Officer
Barnes & Noble Education, Inc.
December 7, 2023
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.



Exhibit 32.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO
RULE 13a-14(b) UNDER THE SECURITIES EXCHANGE ACT OF 1934
AND 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of Barnes & Noble Education, Inc. (the “Company”) on Form 10-Q for the period ended October 28, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kevin Watson, Chief Financial Officer of the Company, certify, to the best of my knowledge, pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
 
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Kevin Watson
Kevin Watson
Chief Financial Officer
Barnes & Noble Education, Inc.
December 7, 2023
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.


v3.23.3
Document and Entity Information - shares
 6 Months Ended
Oct. 28, 2023
Dec. 01, 2023
Document Information [Line Items]    
Document Type 10-Q  
Amendment Flag false  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q2  
Entity Shell Company false  
Entity Registrant Name BARNES & NOBLE EDUCATION, INC.  
Entity Central Index Key 0001634117  
Current Fiscal Year End Date --04-27  
Entity Filer Category Accelerated Filer  
Entity Emerging Growth Company false  
Entity Small Business false  
Entity Common Stock, Shares Outstanding   53,149,504
Document Quarterly Report true  
Trading Symbol BNED  
Security Exchange Name NYSE  
Title of 12(b) Security Common Stock, $0.01 par value per share  
Document Transition Report false  
Entity File Number 1-37499  
Local Phone Number 991-2665  
City Area Code (908)  
Entity Address, Postal Zip Code 07920  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 46-0599018  
Entity Address, State or Province NJ  
Entity Address, City or Town Basking Ridge,  
Entity Address, Address Line One 120 Mountain View Blvd.,  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Document Period End Date Oct. 28, 2023  
v3.23.3
Consolidated Statements of Operations and Comprehensive Loss - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended 6 Months Ended
Oct. 28, 2023
Oct. 29, 2022
Oct. 28, 2023
Oct. 29, 2022
Sales:        
Product sales and other $ 569,698 $ 567,299 $ 822,348 $ 811,061
Rental income 40,681   52,192 52,246
Total sales 610,379 608,633 874,540 863,307
bned_Cost of Product and Other Cost of Sales 451,953 447,551 658,967 639,955
Rental cost of sales 22,184 22,941 28,697 29,206
Cost of Goods and Services Sold 474,137 470,492 687,664 669,161
Gross profit 136,242 138,141 186,876 194,146
Selling and administrative expenses 85,961 98,954 163,437 189,295
Depreciation and amortization expense 10,175 10,256 20,428 21,152
Restructuring and other charges 4,274 260 8,907 635
Operating Income (Loss) 35,832 28,671 (5,896) (16,936)
Interest expense, net 10,664 4,886 18,918 8,754
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest, Total 25,168 23,785 (24,814) (25,690)
Income tax expense (benefit) 314 (383) 303 464
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent 24,854 24,168 (25,117) (26,154)
Net (loss) income $ 24,180 $ 22,144 $ (26,208) $ (30,563)
Income (Loss) from Continuing Operations, Per Diluted Share $ 0.47 $ 0.46 $ (0.48) $ (0.50)
Income (Loss) from Continuing Operations, Per Basic Share 0.47 0.46 (0.48) (0.50)
Discontinued Operation, Income (Loss) from Discontinued Operation, Net of Tax, Per Basic Share (0.01) (0.04) (0.02) (0.08)
(Loss) Earnings per share of common stock        
Basic 0.46 0.42 (0.50) (0.58)
Diluted $ 0.46 $ 0.42 $ (0.50) $ (0.58)
Weighted average common shares outstanding        
Diluted 52,870 53,195 52,716 52,305
Basic 52,791 52,438 52,716 52,305
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent $ (674) $ (2,024) $ (1,091) $ (4,409)
Discontinued Operation, Tax Effect of Discontinued Operation $ 0 $ 83 $ 20 $ 169
Income (Loss) from Discontinued Operations and Disposal of Discontinued Operations, Net of Tax, Per Diluted Share $ (0.01) $ (0.04) $ (0.02) $ (0.08)
Retail Segment [Member]        
Sales:        
Total sales $ 599,336 $ 598,610 $ 844,796 $ 835,117
Gross profit 125,529 129,502 175,820 183,495
Selling and administrative expenses 77,182 90,086 146,355 169,090
Depreciation and amortization expense 8,911 8,869 17,877 18,398
Restructuring and other charges 29 0 555 0
Operating Income (Loss) $ 39,407 30,547 $ 11,033 $ (3,993)
Retail Segment [Member] | Transferred over Time        
Sales:        
Rental income   $ 41,334    
v3.23.3
Consolidated Balance Sheets - USD ($)
shares in Thousands, $ in Thousands
Oct. 28, 2023
Apr. 29, 2023
Oct. 29, 2022
Current assets:      
Cash and cash equivalents $ 15,008 $ 14,219 $ 17,296
Receivables, net 221,805 92,512 209,288
Merchandise inventories, net 364,292 322,979 371,570
Textbook rental inventories 51,840 30,349 49,355
Prepaid expenses and other current assets 63,410 49,512 51,520
Disposal Group, Including Discontinued Operation, Assets 0 27,430 30,558
Total current assets 716,355 537,001 729,587
Net property and equipment 61,403 68,153 75,475
Operating Lease, Right-of-Use Asset 246,531 246,972 291,704
Intangible assets, net 104,026 110,632 120,533
Deferred Tax Assets, Tax Deferred Expense 0 132 0
Other noncurrent assets 16,664 17,889 21,100
Total assets 1,144,979 980,779 1,238,399
Current liabilities:      
Accounts payable 385,895 267,923 326,007
Accrued liabilities 112,075 85,759 113,628
Operating Lease, Liability, Current 126,426 99,980 130,802
Short-term Debt 0 40,000 0
Disposal Group, Including Discontinued Operation, Liabilities 0 8,423 5,243
Total current liabilities 624,396 462,085 575,680
Deferred Income Tax Liabilities, Net 1,936 1,970 1,430
Operating Lease, Liability, Noncurrent 160,185 184,754 190,758
Other long-term liabilities 18,625 19,068 19,622
Long-Term Debt 233,873 182,151 250,445
Liabilities 1,039,015 850,028 1,037,935
Commitments and contingencies 0 0 0
Preferred Stock, Value, Issued 0 0 0
Common Stock, Value, Outstanding 558 551 551
Additional Paid in Capital 747,518 745,932 744,339
Retained Earnings (Accumulated Deficit) (619,564) (593,356) (522,057)
Treasury Stock, Value (22,548) (22,376) (22,369)
Total Equity 105,964 130,751 200,464
Total liabilities and Parent Company equity $ 1,144,979 $ 980,779 $ 1,238,399
Preferred Stock, Par or Stated Value Per Share $ 0.01 $ 0.01 $ 0.01
Preferred Stock, Shares Authorized 5,000 5,000 5,000
Preferred Stock, Shares Issued 0 0 0
Preferred Stock, Shares Outstanding 0 0 0
Common Stock, Par or Stated Value Per Share $ 0.01 $ 0.01 $ 0.01
Common Stock, Shares Authorized 200,000 200,000 200,000
Common Stock, Shares, Issued 55,818 55,140 55,132
Common Stock, Shares, Outstanding 53,137 52,604 52,599
v3.23.3
Statement of Cash Flows (Statement) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended 12 Months Ended
Oct. 28, 2023
Oct. 29, 2022
Oct. 28, 2023
Oct. 29, 2022
Apr. 29, 2023
Apr. 30, 2022
Statement of Cash Flows [Abstract]            
Net Income (Loss) Attributable to Parent $ 24,180 $ 22,144 $ (26,208) $ (30,563)    
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent (674) (2,024) (1,091) (4,409)    
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent 24,854 24,168 (25,117) (26,154) $ (90,140) $ (61,559)
Depreciation and amortization expense 10,175 10,256 20,428 21,152    
Content Amortization     0 26    
Amortization of Debt Issuance Costs     4,406 1,200    
Increase (Decrease) in Deferred Income Taxes     97 0    
Share-based Compensation     1,756 3,066    
Paid-in-Kind Interest     863 0    
Increase (Decrease) in Operating Liabilities     1,826 (298)    
Increase (Decrease) in Other Noncurrent Assets and Liabilities, Net     (2,311) 265    
Increase (Decrease) in Receivables     (129,293) (73,287)    
Increase (Decrease) in Inventories     (41,313) (77,716)    
Increase (Decrease) in Rental Inventories     (21,491) (19,743)    
Increase (Decrease) in Prepaid Expense and Other Assets     2,756 13,149    
Accounts payable and accrued liabilities     140,233 168,413    
Increase (Decrease) in Other Current Assets and Liabilities, Net     (49,108) 10,816    
Net Cash Provided by (Used in) Operating Activities, Continuing Operations     (47,160) 10,073    
Cash Provided by (Used in) Operating Activities, Discontinued Operations     (3,939) (703)    
Net Cash Provided by (Used in) Operating Activities     (51,099) 9,370    
Payments to Acquire Property, Plant, and Equipment     (8,196) (16,823)    
Increase (Decrease) in Other Noncurrent Assets     78 255    
Net Cash Provided by (Used in) Investing Activities, Continuing Operations     (8,118) (16,568)    
Cash Provided by (Used in) Investing Activities, Discontinued Operations     21,395 (3,750)    
Net Cash Provided by (Used in) Investing Activities     13,277 (20,318)    
Proceeds from Issuance of Secured Debt     284,698 348,200    
Proceeds from (Repayments of) Secured Debt     (233,970) (321,900)    
Payments of Debt Issuance Costs     (9,381) (1,716)    
Payments for Repurchase of Common Stock     (172) (857)    
Net Cash Provided by (Used in) Financing Activities, Continuing Operations     41,175 23,727    
Cash Provided by (Used in) Financing Activities, Discontinued Operations     0 0    
Net Cash Provided by (Used in) Financing Activities     41,175 23,727    
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect     3,353 12,779    
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents 35,341 33,815 35,341 33,815 $ 31,988 $ 21,036
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Disposal Group, Including Discontinued Operations 0 929 0 929    
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Including Disposal Group and Discontinued Operations $ 35,341 $ 32,886 $ 35,341 $ 32,886    
v3.23.3
Consolidated Statement of Equity Statement - USD ($)
shares in Thousands, $ in Thousands
Total
Additional Paid-in Capital [Member]
Common Stock [Member]
Retained Earnings
Treasury Stock, Common
Common Stock, Shares, Issued     54,234    
Total Equity $ 228,374 $ 740,838 $ 542 $ (491,494)  
Treasury Stock, Common, Shares         2,188
Treasury Stock, Value (21,512)        
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures     540    
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures 0 (5) $ 5    
Stock-based compensation expense 1,791 1,791      
CostOfRepurchasedSharesForTaxWittholdingForShareBasedCompensation (612)        
Net Income (Loss) Attributable to Parent (52,707)        
Stock Issued During Period, Value, Treasury Stock Reissued (612)        
Stock Issued During Period, Shares, Treasury Stock Reissued         238
Net Income (Loss) Attributable to Parent (30,563)        
Common Stock, Shares, Issued     54,774    
Total Equity 176,846 742,624 $ 547 (544,201)  
Treasury Stock, Common, Shares         2,426
Treasury Stock, Value (22,124)        
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures     357    
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures 0 (4) $ 4    
Stock-based compensation expense 1,719 1,719      
CostOfRepurchasedSharesForTaxWittholdingForShareBasedCompensation (245)        
Net Income (Loss) Attributable to Parent 22,144        
Stock Issued During Period, Value, Treasury Stock Reissued $ (245)        
Stock Issued During Period, Shares, Treasury Stock Reissued         107
Common Stock, Shares, Issued 55,132   55,131    
Total Equity $ 200,464 744,339 $ 551 (522,057)  
Treasury Stock, Common, Shares         2,533
Treasury Stock, Value $ (22,369)        
Common Stock, Shares, Issued 55,140   55,140    
Total Equity $ 130,751 745,932 $ 551 (593,356)  
Treasury Stock, Common, Shares         2,536
Treasury Stock, Value (22,376)        
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures     179    
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures 0 (2) $ 2    
Stock-based compensation expense 794 794      
CostOfRepurchasedSharesForTaxWittholdingForShareBasedCompensation (98)        
Net Income (Loss) Attributable to Parent (50,388)        
Stock Issued During Period, Value, Treasury Stock Reissued (98)        
Stock Issued During Period, Shares, Treasury Stock Reissued         78
Net Income (Loss) Attributable to Parent (26,208)        
Common Stock, Shares, Issued     55,319    
Total Equity 81,059 746,724 $ 553 (643,744)  
Treasury Stock, Common, Shares         2,614
Treasury Stock, Value (22,474)        
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures     499    
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures 0 (5) $ 5    
Stock-based compensation expense 799 799      
CostOfRepurchasedSharesForTaxWittholdingForShareBasedCompensation (74)        
Net Income (Loss) Attributable to Parent 24,180        
Stock Issued During Period, Value, Treasury Stock Reissued $ (74)        
Stock Issued During Period, Shares, Treasury Stock Reissued         67
Common Stock, Shares, Issued 55,818   55,818    
Total Equity $ 105,964 $ 747,518 $ 558 $ (619,564)  
Treasury Stock, Common, Shares         2,681
Treasury Stock, Value $ (22,548)        
v3.23.3
Organization
 6 Months Ended
Oct. 28, 2023
Organization
Note 1. Organization
Description of Business
Barnes & Noble Education, Inc. (“BNED”) is one of the largest contract operators of physical and virtual bookstores for college and university campuses and K-12 institutions across the United States. We are also one of the largest textbook wholesalers, inventory management hardware and software providers. We operate 1,271 physical, virtual, and custom bookstores and serve more than 5.8 million students, delivering essential educational content, tools and general merchandise within a dynamic omnichannel retail environment.
The strengths of our business include our ability to compete by developing new products and solutions to meet market needs, our large operating footprint with direct access to students and faculty, our well-established, deep relationships with academic partners and stable, long-term contracts and our well-recognized brands. We provide product and service offerings designed to address the most pressing issues in higher education, including equitable access, enhanced convenience and improved affordability through innovative course material delivery models designed to drive improved student experiences and outcomes. We offer 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. During the 26 weeks ended October 28, 2023, BNC First Day total revenue increased by $72,684, or 39%, to $261,021 compared to $188,337 during the prior year period.
We expect to continue to introduce scalable and advanced solutions focused largely on the student and customer experience, expand our e-commerce capabilities and accelerate such capabilities through our merchandising and e-commerce service provider agreement with 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 Relationship”), win new accounts, and expand our revenue opportunities through strategic relationships. We expect gross general merchandise sales to increase over the long term, as our product assortments continue to emphasize and reflect changing consumer trends, and we evolve our presentation concepts and merchandising of products in stores and online, which we expect to be further enhanced and accelerated through the F/L Relationship. Through this relationship, Fanatics and Lids provide unparalleled product assortment, e-commerce capabilities and powerful digital marketing tools on our behalf to drive increased value for customers and accelerate growth of our logo general merchandise business.
The Barnes & Noble brand (licensed from our former parent) along with our subsidiary brands, BNC and MBS, are synonymous with innovation in bookselling and campus retailing, and are widely recognized and respected brands in the United States. Our large college footprint, reputation, and credibility in the marketplace not only support our marketing efforts to universities, students, and faculty, but are also important to our relationship with leading publishers who rely on us as one of their primary distribution channels.
During the fourth quarter of Fiscal 2023, assets related to our DSS Segment met the criteria for classification as Assets Held for Sale and Discontinued Operations and is no longer a reportable segment. We have two reportable segments: Retail and Wholesale. For additional information related to our strategies, operations and segments, see Part I - Item 1. Business in our Annual Report on Form 10-K for the fiscal year ended April 29, 2023.
BNC First Day Equitable and Inclusive Access Programs
We provide product and service offerings designed to address the most pressing issues in higher education, including equitable access, enhanced convenience and improved affordability through innovative course material delivery models designed to drive improved student experiences and outcomes. We offer 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.
•First Day Complete is adopted by an institution and includes the majority of undergraduate classes (and on occasion graduate classes), providing students both physical and digital materials. The First Day Complete model drives substantially greater unit sales and sell-through for the bookstore.
•First Day is adopted by a faculty member for a single course, and students receive primarily digital course materials through their school's learning management system ("LMS").
Offering course materials through our equitable and inclusive access First Day Complete and First Day models is a key, and increasingly important strategic initiative of ours to meet the market demands of substantially reduced pricing to students, as well as the opportunity to improve student outcomes, while, at the same time, increasing our market share, revenue and relative gross profits of course material sales given the higher volumes of units sold in such models as compared to historical sales models that rely on individual student marketing and sales. These programs have allowed us to reverse historical long-term trends in course materials revenue declines, which have been observed at those schools where such programs have been adopted, and improve predictability of our future results. We are moving quickly and decisively to accelerate our First Day Complete strategy. We plan to move many institutions to First Day Complete in Fiscal 2024 and the majority of our schools by Fiscal 2025, with continued relative adoption of this model thereafter.
In the Fall of 2023, 157 campus stores are utilizing First Day® Complete representing enrollment of nearly 800,000 undergraduate and post graduate students (as reported by National Center for Education Statistics), an increase of approximately 47% compared to Fall of 2022. During the 26 weeks ended October 28, 2023, First Day Complete sales increased by $55,455, or 52%, to $161,934 as compared to $106,479 in the prior year period. During the 26 weeks ended October 28, 2023, First Day sales increased by $17,229, or 21%, to $99,087 as compared to $81,858 in the prior year period.
Relationship with Fanatics and Lids
In December 2020, we entered into the F/L Relationship. Under the related service provider agreements, we receive unparalleled product assortment, e-commerce capabilities and powerful digital marketing tools to drive increased value for customers and accelerate growth of our general merchandise business. Fanatics and Lids process consumer personal information on our behalf, subject to certain contractual obligations as our service providers, offering our campus stores expanded product selection, a world-class online and mobile experience, and a progressive direct-to-consumer platform. Coupled with Lids, the leading standalone brick and mortar retailer focused exclusively on licensed fan and alumni products, our campus stores have improved access to trend and sales performance data on licensees, product styles, and design treatments.
We maintain our relationships with campus partners and remain responsible for staffing and managing the day-to-day operations of our campus bookstores. We also work closely with our campus partners to ensure that each campus store maintains unique aspects of in-store merchandising, including localized product assortments and specific styles and designs that reflect each campus’s brand. As our service provider, we leverage Fanatics’ e-commerce technology and expertise on our behalf for the operational management of the emblematic merchandise and gift sections of our campus store websites. Lids manages in-store assortment planning and merchandising of emblematic apparel, headwear, and gift products for our partner campus stores, and Lids owns the inventory it manages, relieving us of the obligation to finance inventory purchases from working capital.
v3.23.3
Employees Benefit Plan
 6 Months Ended
Oct. 28, 2023
Employees' Defined Contribution Plan
Note 11. Employee Benefit Plans
We sponsor defined contribution plans for the benefit of substantially all of the employees of BNC. MBS maintains a profit sharing plan covering substantially all full-time employees of MBS. For all plans, we are responsible to fund the employer contributions directly. Total employee benefit expense for these plans was $590 and $1,026 during the 13 weeks ended October 28, 2023 and October 29, 2022, respectively. Total employee benefit expense for these plans was $1,687 and $2,285 during the 26 weeks ended October 28, 2023 and October 29, 2022, respectively.
Commencing in September 2023, we revised the 401(k)-retirement savings plan to an annual end of plan year discretionary match, in lieu of the current pay period match.
v3.23.3
Statement of Financial Position, Classified (Policies)
 6 Months Ended
Oct. 28, 2023
Statement of Financial Position [Abstract]  
New Accounting Pronouncements, Policy
Recent Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This guidance will be effective for the Company for the annual report for the fiscal year ending April 26, 2025 and subsequent interim periods. Early adoption is permitted and retrospective adoption is required for all prior periods presented. We are currently assessing this guidance and determining the impact on our condensed consolidated financial statements.
v3.23.3
Organization - Additional Information
Person in Thousands, $ in Thousands
 6 Months Ended
Oct. 28, 2023
USD ($)
segment
Store
Person
Oct. 29, 2022
USD ($)
Organization Consolidation And Presentation Of Financial Statements [Line Items]    
Number of Stores | Store 1,271  
Number of students covered to build relationships and derive sales | Person 5,800  
Number of Reportable Segments | segment 2  
First Day Complete Revenue description [Abstract]    
Revenues $ 874,540 $ 863,307
Revenue Change [Abstract]    
Net Cash Provided by (Used in) Operating Activities, Continuing Operations (47,160) 10,073
First Day Complete    
First Day Complete Revenue description [Abstract]    
Revenues 161,934 106,479
Revenue Change [Abstract]    
Revenue Variance $ 55,455  
Revenue Change Percent 52.00%  
BNC First Day    
First Day Complete Revenue description [Abstract]    
Revenues $ 261,021 188,337
Revenue Change [Abstract]    
Revenue Variance $ 72,684  
Revenue Change Percent 39.00%  
First Day    
First Day Complete Revenue description [Abstract]    
Revenues $ 99,087 $ 81,858
Revenue Change [Abstract]    
Revenue Variance $ 17,229  
Revenue Change Percent 21.00%  
v3.23.3
Employees Benefit Plans - Additional Information - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Oct. 28, 2023
Oct. 29, 2022
Oct. 28, 2023
Oct. 29, 2022
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]        
Company contributions, employee benefit expenses $ 590 $ 1,026 $ 1,687 $ 2,285
v3.23.3
Summary of Significant Accounting Policies (Notes)
 6 Months Ended
Oct. 28, 2023
Summary of Significant Accounting Policies
Note 2. Summary of Significant Accounting Policies
Basis of Presentation and Consolidation
Our condensed consolidated financial statements reflect our condensed consolidated financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States (“GAAP”). Net income (loss) is equal to comprehensive income (loss) on our condensed consolidated statement of operations. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements of the Company contain all
adjustments (consisting of only normal recurring adjustments) necessary to present fairly its consolidated financial position and the results of its operations and cash flows for the periods reported. These consolidated financial statements are condensed and therefore do not include all of the information and footnotes required by GAAP. All material intercompany accounts and transactions have been eliminated in consolidation.
Our fiscal year is comprised of 52 or 53 weeks, ending on the Saturday closest to the last day of April. Due to the seasonal nature of the business, the results of operations for the 13 and 26 weeks ended October 28, 2023 are not indicative of the results expected for the 52 weeks ending April 27, 2024 ("Fiscal 2024").
Liquidity and Going Concern
The accompanying condensed consolidated financial statements are prepared in accordance with U.S. GAAP applicable to a going concern. This presentation contemplates the realization of assets and the satisfaction of liabilities in the normal course of business and does not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described below.
Pursuant to ASC 205-40, Presentation of Financial Statements — Going Concern (“ASC 205-40”), management must evaluate whether there are conditions and events, considered in aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that these condensed consolidated financial statements are issued. In accordance with ASC 205-40, management’s analysis can only include the potential mitigating impact of management’s plans that have not been fully implemented as of the issuance date of these condensed consolidated financial statements if (a) it is probable that management’s plans will be effectively implemented on a timely basis, and (b) it is probable that the plans, when implemented, will alleviate the relevant conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern.
Our primary sources of cash are net cash flows from operating activities, funds available under our Credit Agreement, Term Loan Agreement, and short-term vendor financing. Our liquidity is highly dependent on the seasonal nature of our business, particularly with respect to course material sales, as sales are generally highest in the second and third fiscal quarters, when college students generally purchase textbooks for the upcoming Fall and Spring semesters, respectively. As of October 28, 2023, we had $35,341 of cash on hand, including $20,333 of restricted cash primarily related to segregated funds for commission due to Lids for logo merchandise sales as per the merchandising service provider agreement.
Our business was significantly negatively impacted by the COVID-19 pandemic during the years ended April 30, 2022 and May 1, 2021, as many schools adjusted their learning models and on-campus activities. Although most academic institutions have since reopened after the COVID-19 pandemic, the lingering impacts of the pandemic have resulted in changes in customer behaviors, lower enrollments, and an evolving educational landscape which continued to impact our financial results during the year ended April 29, 2023. Some institutions are still providing alternatives to traditional in-person instruction, including online and hybrid learning options and significantly reduced classroom sizes. The impact of COVID-19 store closings, as well as lower earnings during the year ended April 29, 2023, resulted in the loss of cash flows and increased borrowings that we would not otherwise have expected to incur.
We recognized Net Income from Continuing Operations of $24,854 and $24,168 for the 13 weeks ended October 28, 2023 and October 29, 2022, respectively, and a Net Loss from Continuing Operations of $(25,117) and $(26,154) for the 26 weeks ended October 28, 2023 and October 29, 2022, respectively, and we incurred a Net Loss from Continuing Operations of $(90,140), $(61,559), and $(133,569) for the years ended April 29, 2023, April 30, 2022, and May 1, 2021, respectively. Our Cash Flow (Used In) Provided by Operating Activities from Continuing Operations were $(47,160) and $10,073 for the 26 weeks ended October 28, 2023 and October 29, 2022, respectively, and were $90,513, $(16,195), and $27,049, for the years ended April 29, 2023, April 30, 2022, and May 1, 2021, respectively. The tightening of our available credit commitments, including the elimination and repayment of our FILO Facility in fiscal year 2023 of $40,000, had a significant impact on our liquidity during fiscal year 2023 and fiscal year 2024, including our ability to make timely vendor payments and school commission payments.
Our losses and projected cash needs, combined with our current liquidity level, raised substantial doubt about our ability to continue as a going concern as of the year ended April 29, 2023, which Management subsequently remediated by implementing a plan to improve the Company’s liquidity and successfully alleviate substantial doubt including (1) raising additional liquidity and (2) taking additional operational restructuring actions.
Debt amendments
On October 10, 2023, we amended our existing Credit Agreement to revise certain reporting requirements to the administrative agent and lenders under the Credit Agreement. The amendment introduced a Specified Liquidity Transaction Fee of $3,800 that would become due and payable at the earlier to occur of (1) January 31, 2024, to the extent a Specified Liquidity Transaction (as defined in the Credit Agreement) has not been consummated prior to such date (or such later date that is up to thirty days thereafter to the extent agreed to in writing by the Administrative Agent in its sole discretion) or (b) an Event of Default under the Credit Agreement.
On July 28, 2023, we amended our existing Credit Agreement to (i) extend the maturity date of the Credit Agreement to December 28, 2024, (ii) reduce advance rates with respect to the borrowing base by 1000 basis points on September 2, 2024 (in lieu of the reductions previously contemplated for September 2023), (iii) subject to the conditions set forth in such amendment, add a CARES Act tax refund claim to the borrowing base, from April 1, 2024 through July 31, 2024, (iv) amend the financial maintenance covenant to require Availability (as defined in the Credit Agreement) at all times greater than the greater of (x) 10% of the Aggregate Loan Cap (as defined in the Credit Agreement) and (y) (A) $32,500 minus, subject to the conditions set forth in such amendment, (B) (a) $7,500 for the period of April 1, 2024 through and including April 30, 2024, (b) $2,500 for the period of May 1, 2024 through and including May 31, 2024 and (c) $0 at all other times, (v) add a minimum Consolidated EBITDA (as defined in the Credit Agreement) financial maintenance covenant, and (vi) amend certain negative and affirmative covenants and add certain additional covenants, all as more particularly set forth in such amendment. The amendment also requires that we appoint a Chief Restructuring Officer and that, by August 11, 2023, we (i) appoint two independent members to the board of directors of the Company from prospective candidates that have been previously disclosed to the Administrative Agent and the Lenders and (ii) appoint a committee of the board of directors of the Company to consist of three board members (two of whom will be the new independent directors), and as of the date of this filing, we have satisfied such requirements. The committee’s responsibilities will include, among other things, to explore, consider, solicit expressions of interest or proposals for, respond to any communications, inquiries or proposals regarding, and advise as to all strategic alternatives to effect a “Specified Liquidity Transaction” (as defined in the Credit Agreement). There can be no guarantee or assurances that any such transaction or transactions be consummated. We must pay (i) a fee of 0.50% of the outstanding principal amount of the commitments under the Credit Agreement March 2023 amendment (as defined in the Credit Agreement) on the closing date (in lieu of the deferred fee previously contemplated in connection with the March 2023 amendment (as defined in the Credit Agreement)) and (ii) a fee of 1.00% of the outstanding principal amount of the commitments under the Credit Agreement as of the closing date on the earlier to occur of September 2, 2024 and an Event of Default (as defined in the Credit Agreement).
On July 28, 2023, we amended our Term Loan Agreement to (i) extend the maturity date of the Term Loan Agreement to April 7, 2025, (ii) allow for interest to be paid in kind until September 2, 2024, (iii) amend the 1.50% anniversary fee to recur on June 7 of each year that the Term Loan Agreement remains outstanding, with 2024 fee deferred to the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement) and (iv) amend certain negative covenants and affirmative and add certain additional covenants. We must pay a fee of $50,000 to the lenders under the Term Loan Agreement on the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement).
Operational restructuring plans
During Fiscal 2023, we implemented a significant cost reduction program designed to streamline our operations, maximize productivity and drive profitability. We reduced our workforce, eliminated duplicate administrative headcounts at all levels, implemented improved system development processes to reduce maintenance costs, reduced capital expenditures, and evaluated operating contractual obligations for cost savings. Over the last year, we have achieved annualized savings of $30,000 to $35,000 from these cost savings initiatives. Additionally, during Fiscal 2024, Management's planned to implement further cost savings measures, including reduction of gross capital expenditures, amounting to approximately $25,000, of which approximately $14,000 has been achieved during the 26 weeks ended October 28, 2023. Management believes that these plans are within its control and will be focused on implementing as outlined.
During the 13 weeks ended October 28, 2023, Net Income from Continuing Operations increased by $686 compared to the prior year period. Excluding interest expense and restructuring and other charges Net Income from Continuing Operations improved by $10,478 during the 13 weeks ended October 28, 2023 compared to the prior year period. During the 26 weeks ended October 28, 2023, Net Loss from Continuing Operations decreased by $1,037 compared to the prior year period. Excluding interest expense and restructuring and other charges Net Loss from Continuing Operations decreased by $19,473 during the 26 weeks ended October 28, 2023 compared to the prior year period. The improvements in Net Income from Continuing Operations during the 13 and 26 weeks are primarily due to operational improvements and cost savings initiatives.
Management believes that the expected impact on our liquidity and cash flows resulting from the debt amendments and the operational initiatives outlined above are sufficient to enable the Company to meet its obligations for at least twelve months from the issuance date of these condensed consolidated financial statements and to continue to alleviate the conditions that initially raised substantial doubt about the Company's ability to continue as a going concern.
Seasonality
Our business is highly seasonal. Our quarterly results also may fluctuate depending on the timing of the start of the various schools' semesters, as well as shifts in our fiscal calendar dates. These shifts in timing may affect the comparability of our results across periods. Our retail business is highly seasonal, with the major portion of sales and operating profit realized during the second and third fiscal quarters, when college students generally purchase and rent textbooks for the upcoming semesters. Sales attributable to our wholesale business are generally highest in our first, second and third quarters, as it sells textbooks and other course materials for retail distribution. See Revenue Recognition and Deferred Revenue discussion below.
Use of Estimates
In preparing financial statements in conformity with GAAP, we are required to make estimates and assumptions that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
Discontinued Operations
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. All corresponding prior year periods presented in our financial statements and related information in the accompanying notes have been reclassified to reflect the Asset Held for Sale and Discontinued Operations presentation.
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 26 weeks ended October 28, 2023, we recorded a Gain on Sale of Business of $3,068 in Loss from Discontinued Operations, Net, related to the sale. Net cash proceeds from the sale were used for debt repayment and provided additional funds for working capital needs under our Credit Facility. The following table summarizes the operating results of the discontinued operations for the periods indicated:
13 weeks ended26 weeks ended
Dollars in thousandsOctober 28, 2023October 29, 2022October 28, 2023October 29, 2022
Total sales$— $8,465 $2,784 $17,649 
Cost of sales (a)
— 1,772 76 3,472 
Gross profit (a)
— 6,693 2,708 14,177 
Selling and administrative expenses643 8,131 2,924 16,277 
Depreciation and amortization3 503 3 2,140 
Gain on sale of business— — (3,068)— 
Impairment loss (non-cash) (b)
— — 610 — 
Restructuring costs (c)
10 — 3,297 — 
Transaction costs18 — 13 — 
Operating loss(674)(1,941)(1,071)(4,240)
Income tax expense— 83 20 169 
Loss from discontinued operations, net of tax$(674)$(2,024)$(1,091)$(4,409)
(a) Cost of sales and Gross margin for the DSS Segment includes amortization expense (non-cash) related to content development costs of $1,618 and $3,169 for the 13 and 26 weeks ended October 29, 2022, respectively.
(b)    During the 26 weeks ended October 28, 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 26 weeks ended October 28, 2023, we recognized restructuring and other charges of $3,297 comprised of severance and other employee termination costs.

The following table summarizes the assets and liabilities of the Assets Held for Sale included in the condensed consolidated balance sheets:
As of
April 29, 2023October 29, 2022
Cash and cash equivalents$1,057 $929 
Receivables, net480 721 
Prepaid expenses and other current assets901 2,421 
Property and equipment, net19,523 20,621 
Intangible assets, net402 954 
Goodwill4,700 4,700 
Deferred tax assets, net130 — 
Other noncurrent assets237 212 
Assets held for sale$27,430 $30,558 
Accounts payable$211 $161 
Accrued liabilities8,212 5,061 
Other long-term liabilities— 20 
Liabilities held for sale$8,423 $5,242 
Restricted Cash
As of October 28, 2023 and October 29, 2022, we had restricted cash of $20,333 and $15,590, respectively, comprised of $19,388 and $14,686, respectively, in prepaid and other current assets in the condensed consolidated balance sheet related to segregated funds for commission due to Lids for logo merchandise sales as per the Lids service provider merchandising agreement, and $945 and $904, respectively, in other noncurrent assets in the condensed consolidated balance sheet related to amounts held in trust for future distributions related to employee benefit plans.
Merchandise Inventories
Merchandise inventories, which consist of finished goods, are stated at the lower of cost or market. Market value of our inventory, which is all purchased finished goods, is determined based on its estimated net realizable value, which is generally the selling price less normally predictable costs of disposal and transportation. Reserves for non-returnable inventory are based on our history of liquidating non-returnable inventory, which includes certain significant assumptions, including markdowns, sales below cost, inventory aging and expected demand.
Cost is determined primarily by the retail inventory method for our Retail segment. Our textbook and trade book inventories, for Retail and Wholesale, are valued using the LIFO method and the related reserve was not material to the recorded amount of our inventories. There were no LIFO adjustments in Fiscal 2023, Fiscal 2022 and Fiscal 2021.
For our physical bookstores, we also estimate and accrue shortage for the period between the last physical count of inventory and the balance sheet date. Shortage rates are estimated and accrued based on historical rates and can be affected by changes in merchandise mix and changes in actual shortage trends.
The Retail Segment fulfillment order is directed first to our wholesale business before other sources of inventory are utilized. The products that we sell originate from a wide variety of domestic and international vendors. After internal sourcing, the bookstore purchases textbooks from outside suppliers and publishers.
Textbook Rental Inventories
Physical textbooks out on rent are categorized as textbook rental inventories. At the time a rental transaction is consummated, the book is removed from merchandise inventories and moved to textbook rental inventories at cost. The cost of the book is amortized down to its estimated residual value over the rental period. The related amortization expense is included in cost of goods sold. At the end of the rental period, upon return, the book is removed from textbook rental inventories and recorded in merchandise inventories at its amortized cost.
Leases
We recognize lease assets and lease liabilities on the condensed consolidated balance sheet for all operating lease arrangements based on the present value of future lease payments as required by Accounting Standards Codification ("ASC") Topic 842, Leases. We do not recognize lease assets or lease liabilities for short-term leases (i.e., those with a term of twelve months or less). We recognize lease expense on a straight-line basis over the lease term for contracts with fixed lease payments, including those with fixed annual minimums, or over a rolling twelve-month period for leases where the annual guarantee resets at the start of each contract year, in order to best reflect the pattern of usage of the underlying leased asset. For additional information, see Note 8. Leases.
Revenue Recognition and Deferred Revenue
Product sales and rentals
The majority of our revenue is derived from the sale of products through our bookstore locations, including virtual bookstores, and our bookstore affiliated e-commerce websites, and contains a single performance obligation. Revenue from sales of our products is recognized at the point in time when control of the products is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for the products. For additional information, see Note 3. Revenue.
Retail product revenue is recognized when the customer takes physical possession of our products, which occurs either at the point of sale for products purchased at physical locations or upon receipt of our products by our customers for products ordered through our websites and virtual bookstores. Wholesale product revenue is recognized upon shipment of physical textbooks at which point title passes and risk of loss is transferred to the customer. Additional revenue is recognized for shipping charges billed to customers and shipping costs are accounted for as fulfillment costs within cost of goods sold.
Revenue from the sale of digital textbooks, which contains a single performance obligation, is recognized at the point of sale as product revenue in our condensed consolidated financial statements. A software feature is embedded within the content of our digital textbooks, such that upon expiration of the term the customer is no longer able to access the content. While the sale of the digital textbook allows the customer to access digital content for a fixed period of time, once the digital content is delivered to the customer, our performance obligation is complete.
Revenue from the rental of physical textbooks is deferred and recognized over the rental period based on the passage of time commencing at the point of sale, when control of the product transfers to the customer and is recognized as rental income in our condensed consolidated financial statements. Rental periods are typically for a single semester and are always less than one year in duration. We offer a buyout option to allow the purchase of a rented physical textbook at the end of the rental period if the customer desires to do so. We record the buyout purchase when the customer exercises and pays the buyout option price which is determined at the time of the buyout. In these instances, we accelerate any remaining deferred rental revenue at the point of sale.
Revenue recognized for our BNC First Day offerings is consistent with our policies outlined above for product, digital and rental sales, net of an anticipated opt-out or return provision. Given the growth of BNC First Day programs, the timing of cash collection from our school partners may shift to periods subsequent to when the revenue is recognized. When a school adopts our BNC First Day equitable and inclusive access offerings, cash collection from the school generally occurs after the institution's drop/add dates, which is later in the working capital cycle, particularly in our third quarter given the timing of the Spring Term and our quarterly reporting period, as compared to direct-to-student point-of-sale transactions where cash is generally collected during the point-of-sale transaction or within a few days from the credit card processor.
We estimate returns based on an analysis of historical experience. A provision for anticipated merchandise returns is provided through a reduction of sales and cost of goods sold in the period that the related sales are recorded.
For sales and rentals involving third-party products, we evaluate whether we are acting as a principal or an agent. Our determination is based on our evaluation of whether we control the specified goods or services prior to transferring them to the
customer. There are significant judgments involved in determining whether we control the specified goods or services prior to transferring them to the customer including whether we have the ability to direct the use of the good or service and obtain substantially all of the remaining benefits from the good or service. For those transactions where we are the principal, we record revenue on a gross basis, and for those transactions where we are an agent to a third-party, we record revenue on a net basis.
As contemplated by the F/L Relationship related merchandising agreement and e-commerce agreement, logo general merchandise sales are fulfilled by Lids and Fanatics on our behalf and we recognize commission revenue earned for these sales on a net basis in our condensed consolidated financial statements.
We do not have gift card or customer loyalty programs. We do not treat any promotional offers as expenses. Sales tax collected from our customers is excluded from reported revenues. Our payment terms are generally 30 days and do not extend beyond one year.
Service and other revenue
Service and other revenue is primarily derived from brand partnership marketing services which includes promotional activities and advertisements within our physical bookstores and web properties performed on behalf of third-party customers, shipping and handling, and revenue from other programs.
Brand partnership marketing agreements often include multiple performance obligations which are individually negotiated with our customers. For these arrangements that contain distinct performance obligations, we allocate the transaction price based on the relative standalone selling price method by comparing the standalone selling price (“SSP”) of each distinct performance obligation to the total value of the contract. The revenue is recognized as each performance obligation is satisfied, typically at a point in time for brand partnership marketing service and overtime for advertising efforts as measured based upon the passage of time for contracts that are based on a stated period of time or the number of impressions delivered for contracts with a fixed number of impressions.
Cost of Sales
Our cost of sales primarily includes costs such as merchandise costs, textbook rental amortization, content development cost amortization, warehouse costs related to inventory management and order fulfillment, insurance, certain payroll costs, and management service agreement costs, including rent expense, related to our college and university contracts and other facility related expenses.
Selling and Administrative Expenses
Our selling and administrative expenses consist primarily of store payroll and store operating expenses. Selling and administrative expenses also include long-term incentive plan compensation expense and general office expenses, such as merchandising, procurement, field support, finance and accounting. Shared-service costs such as human resources, legal, treasury, information technology, and various other corporate level expenses and other governance functions, are not allocated to a specific reporting segment and are recorded in Corporate Services.
Income Taxes
The provision for income taxes includes federal, state and local income taxes currently payable and those deferred because of temporary differences between the financial statement and tax basis of assets and liabilities. The deferred tax assets and liabilities are measured using the enacted tax rates and laws that are expected to be in effect when the differences reverse. We regularly review deferred tax assets for recoverability and establish a valuation allowance, if determined to be necessary.
Recent Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This guidance will be effective for the Company for the annual report for the fiscal year ending April 26, 2025 and subsequent interim periods. Early adoption is permitted and retrospective adoption is required for all prior periods presented. We are currently assessing this guidance and determining the impact on our condensed consolidated financial statements.
v3.23.3
Revenue (Notes)
 6 Months Ended
Oct. 28, 2023
Revenue from Contract with Customer [Abstract]  
Revenue from Contract with Customer [Text Block]
Note 3. Revenue
Revenue from sales of our products and services is recognized either at the point in time when control of the products is transferred to our customers or over time as services are provided in an amount that reflects the consideration we expect to be entitled to in exchange for the products or services. See Note 2. Summary of Significant Accounting Policies for additional information related to our revenue recognition policies and Note 4. Segment Reporting for a description of each segment's product and service offerings.
Disaggregation of Revenue
The following table disaggregates the revenue associated with our major product and service offerings:
13 weeks ended26 weeks ended
October 28, 2023October 29, 2022October 28, 2023October 29, 2022
Retail
Course Materials Product Sales $435,370 $416,410 $573,906 $547,262 
General Merchandise Product Sales (a)
105,022 122,648 193,702 211,472 
Service and Other Revenue (b)
18,263 18,218 24,996 24,137 
Retail Product and Other Sales sub-total558,655 557,276 792,604 782,871 
Course Materials Rental Income40,681 41,334 52,192 52,246 
Retail Total Sales$599,336 $598,610 $844,796 $835,117 
Wholesale Sales$20,973 $21,120 $59,764 $58,203 
Eliminations (c)
$(9,930)$(11,097)$(30,020)$(30,013)
Total Sales$610,379 $608,633 $874,540 $863,307 
(a)Logo general merchandise sales for the Retail Segment are recognized on a net basis as commission revenue in the condensed consolidated financial statements.
(b)Service and other revenue primarily relates to brand partnership marketing and other service revenues.
(c)The sales eliminations represent the elimination of Wholesale sales and fulfillment service fees to Retail and the elimination of Retail commissions earned from Wholesale.
Contract Liabilities
Contract liabilities represent an obligation to transfer goods or services to a customer for which we have received consideration and consists of our deferred revenue liability (deferred revenue). Deferred revenue consists of the following:
•advanced payments from customers related to textbook rental performance obligations, which are recognized ratably over the terms of the related rental period;
•unsatisfied performance obligations associated with brand partnership marketing services, which are recognized when the contracted services are provided to our brand partnership marketing customers; and
•unsatisfied performance obligations associated with the premium paid for the sale of treasury shares, which are expected to be recognized over the term of the e-commerce and merchandising contracts for Fanatics and Lids, respectively.
The following table presents changes in deferred revenue associated with our contract liabilities:
26 weeks ended
October 28, 2023October 29, 2022
Deferred revenue at the beginning of period$15,356 $16,475 
Additions to deferred revenue during the period97,773 96,121 
Reductions to deferred revenue for revenue recognized during the period(71,164)(68,676)
Deferred revenue balance at the end of period:$41,965 $43,920 
Balance Sheet classification:
Accrued liabilities$38,105 $39,504 
Other long-term liabilities3,860 4,416 
Deferred revenue balance at the end of period:$41,965 $43,920 
As of October 28, 2023, we expect to recognize $38,105 of the deferred revenue balance within the next 12 months.
v3.23.3
Segment Reporting (Notes)
 6 Months Ended
Oct. 28, 2023
Segment Reporting
Note 4. Segment Reporting
During the fourth quarter of Fiscal 2023, assets related to our DSS Segment met the criteria for classification as Assets Held for Sale and Discontinued Operations and is no longer a reportable segment. For additional information, see Note 2. Summary of Significant Accounting Policies.
We have 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 a specific reporting segment and continue to be presented as “Corporate Services”.
We identify our segments in accordance with the way our business is managed (focusing on the financial information distributed) and the manner in which our chief operating decision maker allocates resources and assesses financial performance. The following summarizes the two segments. For additional information about each segment's operations, see Part I - Item 1. Business in our Annual Report on Form 10-K for the fiscal year ended April 29, 2023.
Retail Segment
The Retail Segment operates 1,271 college, university, and K-12 school bookstores, comprised of 717 physical bookstores and 554 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 service providers, 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.
Wholesale Segment
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 717 physical bookstores) and sources and distributes new and used textbooks to our 554 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.
Intercompany Eliminations
The eliminations are primarily related to the following intercompany activities:
•The sales eliminations represent the elimination of Wholesale sales and fulfillment service fees to Retail and the elimination of Retail commissions earned from Wholesale, and
•These cost of sales eliminations represent (i) the recognition of intercompany profit for Retail inventory that was purchased from Wholesale in a prior period that was subsequently sold to external customers during the current period and the elimination of Wholesale service fees charged for fulfillment of inventory for virtual store sales, net of (ii) the elimination of intercompany profit for Wholesale inventory purchases by Retail that remain in ending inventory at the end of the current period.
Our international operations are not material, and the majority of the revenue and total assets are within the United States.
Summarized financial information for our reportable segments is reported below:
13 weeks ended26 weeks ended
October 28, 2023October 29, 2022October 28, 2023October 29, 2022
Sales
Retail$599,336 $598,610 $844,796 $835,117 
Wholesale20,973 21,120 59,764 58,203 
Eliminations(9,930)(11,097)(30,020)(30,013)
Total Sales$610,379 $608,633 $874,540 $863,307 
Gross Profit
Retail$125,529 $129,502 $175,820 $183,495 
Wholesale6,090 5,455 11,884 12,354 
Eliminations4,623 3,184 (828)(1,703)
Total Gross Profit$136,242 $138,141 $186,876 $194,146 
Selling and Administrative Expenses
Retail$77,182 $90,086 $146,355 $169,090 
Wholesale3,492 3,867 6,880 7,998 
Corporate Services5,287 5,075 10,205 12,289 
Eliminations— (74)(3)(82)
Total Selling and Administrative Expenses$85,961 $98,954 $163,437 $189,295 
Depreciation and Amortization
Retail$8,911 $8,869 $17,877 $18,398 
Wholesale1,254 1,370 2,531 2,719 
Corporate Services10 17 20 35 
Total Depreciation and Amortization$10,175 $10,256 $20,428 $21,152 
Restructuring and Other Charges
Retail$29 $— $555 $— 
Wholesale— — 526 — 
Corporate Services4,245 260 7,826 635 
Total Restructuring and Other Charges$4,274 $260 $8,907 $635 
Operating Income (Loss)
Retail$39,407 $30,547 $11,033 $(3,993)
Wholesale1,344 218 1,947 1,637 
Corporate Services(9,542)(5,352)(18,051)(12,959)
Elimination 4,623 3,258 (825)(1,621)
Total Operating Income (Loss)$35,832 $28,671 $(5,896)$(16,936)
Interest Expense, net$10,664 $4,886 $18,918 $8,754 
Total Income (Loss) from Continuing Operations Before Income Taxes$25,168 $23,785 $(24,814)$(25,690)
v3.23.3
Equity and Earnings Per Share (Notes)
 6 Months Ended
Oct. 28, 2023
Net Earnings (Loss) Per Share
Note 5. Equity and Earnings Per Share
Equity
Share Repurchases
During the 13 and 26 weeks ended October 28, 2023, we did not repurchase shares of our Common Stock under the stock repurchase program and as of October 28, 2023, approximately $26,669 remains available under the stock repurchase program.
During the 13 and 26 weeks ended October 28, 2023, we repurchased 66,852 and 144,750 shares of our Common Stock, respectively, outside of the stock repurchase program in connection with employee tax withholding obligations for vested stock awards.
Earnings Per Share
Basic EPS is computed based upon the weighted average number of common shares outstanding for the year. Diluted EPS is computed based upon the weighted average number of common shares outstanding for the year plus the dilutive effect of common stock equivalents using the treasury stock method and the average market price of our common stock for the year. We include participating securities (unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents) in the computation of EPS pursuant to the two-class method. Our participating securities consist solely of unvested restricted stock awards, which have contractual participation rights equivalent to those of stockholders of unrestricted common stock. The two-class method of computing earnings per share is an allocation method that calculates earnings per share for common stock and participating securities. During periods of net loss, no effect is given to the participating securities because they do not share in the losses of the Company. During the 13 weeks ended October 28, 2023 and October 29, 2022, average shares of 3,149,756 and 3,153,516 were excluded from the diluted earnings per share calculation as their inclusion would have been antidilutive, respectively. During the 26 weeks ended October 28, 2023 and October 29, 2022, average shares of 3,453,892 and 4,898,303 were excluded from the diluted earnings per share calculation as their inclusion would have been antidilutive, respectively. The following is a reconciliation of the basic and diluted earnings per share calculation:
13 weeks ended26 weeks ended
(shares in thousands)October 28, 2023October 29, 2022October 28, 2023October 29, 2022
Numerator for basic earnings per share:
Net income (loss) from continuing operations$24,854 $24,168 $(25,117)$(26,154)
Less allocation of earnings to participating securities(3)(11)— — 
Net income (loss) from continuing operations available to common shareholders$24,851 $24,157 $(25,117)$(26,154)
Loss from discontinued operations, net of tax
(674)(2,024)(1,091)(4,409)
Net income (loss) available to common shareholders$24,177 $22,133 $(26,208)$(30,563)
Numerator for diluted earnings per share:
Net income (loss) from continuing operations$24,851 $24,157 $(25,117)$(26,154)
Allocation of earnings to participating securities3 11 — — 
Less diluted allocation of earnings to participating securities(3)(11)— — 
Net income (loss) from continuing operations available to common shareholders$24,851 $24,157 $(25,117)$(26,154)
Loss from discontinued operations, net of tax
(674)(2,024)(1,091)(4,409)
Net income (loss) available to common shareholders$24,177 $22,133 $(26,208)$(30,563)
Denominator for basic earnings per share:
Basic weighted average shares of Common Stock52,791 52,438 52,716 52,305 
Denominator for diluted earnings per share:
Basic weighted average shares of Common Stock52,791 52,438 52,716 52,305 
Average dilutive restricted stock units74 141 — — 
Average dilutive restricted shares5 10 — — 
Average dilutive stock options— 606 — — 
Diluted weighted average shares of Common Stock 52,870 53,195 52,716 52,305 
Earnings (Loss) per share of Common Stock:
Basic
Continuing operations$0.47 $0.46 $(0.48)$(0.50)
Discontinuing operations(0.01)(0.04)(0.02)(0.08)
Total Basic Earnings per share$0.46 $0.42 $(0.50)$(0.58)
Diluted
Continuing operations$0.47 $0.46 $(0.48)$(0.50)
Discontinuing operations(0.01)(0.04)(0.02)(0.08)
Total Diluted Earnings per share$0.46 $0.42 $(0.50)$(0.58)
v3.23.3
Fair Values of Financial Instruments (Notes)
 6 Months Ended
Oct. 28, 2023
Fair Value Disclosures
Note 6. Fair Value Measurements
In accordance with ASC No. 820, Fair Value Measurements and Disclosures, the fair value of an asset is considered to be the price at which the asset could be sold in an orderly transaction between unrelated knowledgeable and willing parties. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. Assets and liabilities recorded at fair value are measured using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:
Level 1—Observable inputs that reflect quoted prices in active markets
Level 2—Inputs other than quoted prices in active markets that are either directly or indirectly observable
Level 3—Unobservable inputs in which little or no market data exists, therefore requiring us to develop our own assumptions
Our financial instruments include cash and cash equivalents, receivables, accrued liabilities and accounts payable. The fair value of cash and cash equivalents, receivables, accrued liabilities and accounts payable approximates their carrying values because of the short-term nature of these instruments, which are all considered Level 1. The fair value of short-term and long-term debt approximates its carrying value.
Non-Financial Assets and Liabilities
Our non-financial assets include property and equipment, operating lease right-of-use assets, and intangible assets. Such assets are reported at their carrying values and are not subject to recurring fair value measurements. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with ASC 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets.
Other Non-Financial Liabilities
We granted phantom share units as long-term incentive awards which are settled in cash based on the fair market value of a share of common stock of the Company at each vesting date. The fair value of the liability for the cash-settled phantom share unit awards will be remeasured at the end of each reporting period through settlement to reflect current risk-free rate and volatility assumptions. As of October 28, 2023, we recorded a liability of $32 (Level 2 input) which is reflected in accrued liabilities on the condensed consolidated balance sheet. As of October 29, 2022, we recorded a liability of $1,398 (Level 2 input) which is reflected in accrued liabilities ($1,318) and other long-term liabilities ($80) on the condensed consolidated balance sheet. For additional information, see Note 10. Long-Term Incentive Plan Compensation Expense.
v3.23.3
Debt (Notes)
 6 Months Ended
Oct. 28, 2023
Debt Disclosure
Note 7. Debt
As of
Maturity Date
October 28, 2023October 29, 2022
Credit FacilityDecember 28, 2024$204,881 $222,000 
Term LoanApril 7, 202530,863 30,000 
sub-total235,744 252,000 
Less: Deferred financing costs(1,871)(1,555)
Total debt$233,873 $250,445 
Balance Sheet classification:
Short-term borrowings$— $— 
Long-term borrowings233,873 250,445 
Total debt$233,873 $250,445 
Credit Facility
We have a credit agreement (the “Credit Agreement”), amended from time to time including on October 10, 2023, July 28, 2023, May 24, 2023, March 8, 2023, March 31, 2021 and March 1, 2019, under which the lenders originally committed to provide us with a 5 year asset-backed revolving credit facility in an aggregate committed principal amount of $400,000 (the “Credit Facility”) effective from the March 1, 2019 amendment. We had the option to request an increase in commitments under the Credit Facility of up to $100,000, subject to certain restrictions. Proceeds from the Credit Facility are used for general corporate purposes, including seasonal working capital needs. The agreement included an incremental first in, last out seasonal loan facility (the “FILO Facility”) for a $100,000 maintaining the maximum availability under the Credit Agreement at $500,000. As of July 31, 2022, the FILO Facility was repaid and eliminated according to its terms and future commitments under the FILO Facility were reduced to $0.
March 2023 Credit Agreement Amendment
On March 8, 2023, we amended our existing Credit Agreement to (i) extend the maturity date of the Credit Agreement by six months to August 29, 2024, (ii) reduce the commitments under the Credit Agreement by $20,000 to $380,000, (iii) increase the applicable margin with respect to the interest rate under the Credit Agreement to 3.375% per annum, in the case of interest accruing based on a Secured Overnight Financing Rate, and 2.375%, in the case of interest accruing based on an alternative base rate, in each case, without regard to a pricing grid, (iv) reduce advance rates with respect to the borrowing base (x) by 500 basis points upon the achievement of certain liquidity events, which may include a sale of equity interests or of assets (a “Specified Event”), or, if such a Specified Event shall not have occurred, on May 31, 2023 (see discussion below) and (y) by an additional 500 basis points on September 29, 2023, (v) amend certain negative covenants and add certain additional covenants, (vi) amend the financial maintenance covenant to require Availability (as defined in the Credit Agreement) to be at all times greater than the greater of 10% of the Aggregate Loan Cap (as defined in the Credit Agreement) and $32,500 and (vii) require repayment of the loans under the Credit Agreement upon a Specified Event. For additional information related to the Credit Agreement amendment, see the Company’s Report on Form 8-K dated March 8, 2023 and filed with the SEC on March 9, 2023.
As noted above, the amendment requires the achievement of a Special Event by no later than May 31, 2023 (as such date may be extended pursuant to the terms of the Credit Agreement). See Note 2. Summary of Significant Accounting Policies for information related to the sale of our DSS segment on May 31, 2023.
We paid a fee of 0.25% of the outstanding principal amount of the commitments under the Credit Agreement on the amendment closing date and we will pay an additional fee of 1.00% of the outstanding principal amount of the commitments under the Credit Agreement on September 29, 2023.
During the 52 weeks ended April 29, 2023, we incurred debt issuance costs totaling $4,081 related to the March 2023 Credit Agreement amendment. The debt issuance costs have been deferred and are presented as prepaid and other current assets and other noncurrent assets in the condensed consolidated balance sheets, and subsequently amortized ratably over the term of the credit agreement.
May 2023 Credit Agreement Amendment
On May 24, 2023, we amended our existing Credit Agreement to (i) increase the applicable margin with respect to the interest rate under the Credit Agreement to 3.75% per annum, in the case of interest accruing based on SOFR, and 2.75%, in the case of interest accruing based on an alternative base rate, in each case, without regard to a pricing grid, (ii) defer the reduction of advance rates used to calculate our borrowing capacity by an amount equal to 500 basis points previously required on May 31, 2023 to September 1, 2023, (iii) require cash flow reporting and variance testing commencing June 3, 2023 and (iv) defer partial prepayment of the term loan from the DSS segment sale proceeds to September 1, 2023. We did not incur debt issuance costs related to the May 2023 Credit Agreement amendment. For additional information related to the Credit Agreement amendment, see the Company’s Report on Form 8-K dated May 24, 2023 and filed with the SEC on May 31, 2023.
July 2023 Credit Agreement Amendment
On July 28, 2023, we amended our existing Credit Agreement to (i) extend the maturity date of the Credit Agreement to December 28, 2024, (ii) reduce advance rates with respect to the borrowing base by 1000 basis points on September 2, 2024 (in lieu of the reductions previously contemplated for September 2023), (iii) subject to the conditions set forth in such amendment, add a CARES Act tax refund claim to the borrowing base, from April 1, 2024 through July 31, 2024, (iv) amend the financial maintenance covenant to require Availability (as defined in the Credit Agreement) at all times greater than the greater of (x) 10% of the Aggregate Loan Cap (as defined in the Credit Agreement) and (y) (A) $32,500 minus, subject to the conditions set forth in such amendment, (B) (a) $7,500 for the period of April 1, 2024 through and including April 30, 2024, (b) $2,500 for the period of May 1, 2024 through and including May 31, 2024 and (c) $0 at all other times, (v) add a minimum Consolidated EBITDA (as defined in the Credit Agreement) financial maintenance covenant, and (vi) amend certain negative and affirmative covenants and add certain additional covenants, all as more particularly set forth in such amendment. The amendment also requires that we appoint a Chief Restructuring Officer and that, by August 11, 2023, we (i) appoint two independent members to the board of directors of the Company from prospective candidates that have been previously disclosed to the Administrative Agent and the Lenders and (ii) appoint a committee of the board of directors of the Company to consist of three board members (two of whom will be the new independent directors). The committee’s responsibilities will include, among other things, to explore, consider, solicit expressions of interest or proposals for, respond to any communications, inquiries or proposals regarding, and advise as to all strategic alternatives to effect a “Specified Liquidity Transaction” (as defined in the Credit
Agreement). There can be no guarantee or assurances that any such transaction or transactions be consummated. We must pay (i) a fee of 0.50% of the outstanding principal amount of the commitments under the Credit Agreement March 2023 amendment (as defined in the Credit Agreement) on the closing date (in lieu of the deferred fee previously contemplated in connection with the March 2023 amendment (as defined in the Credit Agreement)) and (ii) a fee of 1.00% of the outstanding principal amount of the commitments under the Credit Agreement as of the closing date on the earlier to occur of September 2, 2024 and an Event of Default (as defined in the Credit Agreement). For additional information related to the Credit Agreement amendment, see the Company's Report on Form 8-K filed with the SEC on July 28, 2023.
During the 26 weeks ended October 28, 2023, we incurred debt issuance costs totaling $11,516 related to the July 2023 Credit Agreement amendment. The debt issuance costs have been deferred and are presented as prepaid and other current assets and other noncurrent assets in the condensed consolidated balance sheets, and subsequently amortized ratably over the term of the credit agreement.
October 2023 Credit Agreement Amendment
On October 10, 2023, we amended our existing Credit Agreement to revise certain reporting requirements to the administrative agent and lenders under the Credit Agreement. The amendment introduced a Specified Liquidity Transaction Fee of $3,800 that would become due and payable at the earlier to occur of (1) January 31, 2024, to the extent a Specified Liquidity Transaction (as defined in the Credit Agreement) has not been consummated prior to such date (or such later date that is up to thirty days thereafter to the extent agreed to in writing by the Administrative Agent in its sole discretion) or (b) an Event of Default under the Credit Agreement. During the 26 weeks ended October 28, 2023, we incurred debt issuance costs totaling $1,428 related to the October 2023 Credit Agreement amendment.
As of October 28, 2023, and through the date of this filing, we were in compliance with all debt covenants under the Credit Agreement.
The Credit Facility is secured by substantially all of the inventory, accounts receivable and related assets of the borrowers under the Credit Facility. This is considered an all asset lien (inclusive of proceeds from tax refunds payable to the Company and a pledge of equity from subsidiaries, exclusive of real estate).
During the 26 weeks ended October 28, 2023, we borrowed $284,698 and repaid $233,970 under the Credit Agreement, and had outstanding borrowings of $204,881 as of October 28, 2023, comprised entirely of borrowings under the Credit Facility. During the 26 weeks ended October 29, 2022, we borrowed $348,200 and repaid $321,900 under the Credit Agreement, and had outstanding borrowings of $222,000 as of October 29, 2022, comprised entirely of borrowings under the Credit Facility. As of October 28, 2023 and October 29, 2022, we have issued $575 and $4,759, respectively, in letters of credit under the Credit Facility.
Term Loan
On June 7, 2022, we entered into a Term Loan Credit Agreement (the “Term Loan Credit Agreement”) with TopLids LendCo, LLC and Vital Fundco, LLC and we entered into an amendment to our existing Credit Agreement, which permitted us to incur the Term Loan Facility (as defined below). For additional information, see the Company’s Report on Form 8-K dated June 7, 2022 and filed with the SEC on June 10, 2022.
The Term Loan Credit Agreement provides for term loans in an amount equal to $30,000 (the “Term Loan Facility” and, the loans thereunder, the “Term Loans”) and matures on April 7, 2025. The proceeds of the Term Loans are being used to finance working capital, and to pay fees and expenses related to the Term Loan Facility. During the 26 weeks ended October 28, 2023, we incurred $863 for interest in kind on the Term Loans and repaid $0 under the Term Loan Credit Agreement, with $30,863 of outstanding borrowings as of October 28, 2023. During the 26 weeks ended October 29, 2022, we borrowed $30,000 and repaid $0 under the Term Loan Credit Agreement.
March 2023 Term Loan Credit Agreement Amendment
On March 8, 2023, we amended the Term Loan Credit Agreement to (i) extend the maturity date of the Term Loan Credit Agreement by six months to December 7, 2024, (ii) permit the application of certain proceeds to the repayment of the loans under Credit Agreement and (iii) amend certain negative covenants and add certain additional covenants to conform to the Credit Agreement. In addition, the amendment requires the achievement of a Specified Event (as described above) by no later than May 31, 2023 (as such date may be extended under the Credit Agreement, but no later than August 31, 2023 without
consent from lenders under the Term Loan Credit Agreement). For additional information, see the Company's Report on Form 8-K dated March 8, 2023 and filed with the SEC on March 9, 2023.
During the 52 weeks ended April 29, 2023, we incurred debt issuance costs totaling $431 related to the March 2023 Term Loan Credit Agreement amendment. We paid a fee of $50 on the amendment closing date to the lenders under the Term Loan Credit Agreement. The debt issuance costs have been deferred and are presented as prepaid and other current assets and other noncurrent assets in the condensed consolidated balance sheets, and subsequently amortized ratably over the term of the credit agreement.
July 2023 Term Loan Credit Agreement Amendment
On July 28, 2023, we amended our Term Loan to (i) extend the maturity date of the Term Loan Agreement to April 7, 2025, (ii) allow for interest to be paid in kind until September 2, 2024, (iii) amend the 1.50% anniversary fee to recur on June 7 of each year that the Term Loan Agreement remains outstanding, with 2024 fee deferred to the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement) and (iv) amend certain negative covenants and affirmative and add certain additional covenants. We must pay a fee of $50 to the lenders under the Term Loan Agreement on the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement). For additional information, see the Company's Report on Form 8-K filed with the SEC on July 28, 2023.
During the 26 weeks ended October 28, 2023, we incurred debt issuance costs totaling $480 related to the July 2023 Term Loan Credit Agreement amendment. The debt issuance costs have been deferred and are presented as a reduction to long-term borrowings in the condensed consolidated balance sheets, and subsequently amortized ratably over the term of the Term Loan Facility.
The Term Loans accrue interest at a rate equal to 11.25%, payable quarterly. All interest on the Term Loan prior to the July 29, 2023 was paid in cash. During the 13 weeks ended October 28, 2023, all interest on the Term Loan was incurred in kind as permitted under the July 2023 Term Loan Amendment. The Term Loans do not amortize prior to maturity.
The Term Loan Credit Agreement does not contain a financial covenant, but otherwise contains representations and warranties, covenants and events of default that are substantially the same as those in the Credit Agreement, including restrictions on the ability of the Company and its subsidiaries to incur additional debt, incur or permit liens on assets, make investments and acquisitions, consolidate or merge with any other company, engage in asset sales and make dividends and distributions. The Term Loan Facility is secured by second-priority liens on all assets securing the obligations under the Credit Agreement, which is all of the assets of the Company and the Guarantors, subject to customary exclusions and limitations set forth in the Term Loan Credit Agreement and the other loan documents executed in connection therewith.
The Credit Agreement amendment permitted us to incur the Term Loan Facility and also provides that, upon repayment of the Term Loan Credit Agreement (and, if applicable, any replacement credit facility thereof), we may incur second lien secured debt in an aggregate principal amount not to exceed $75,000.
v3.23.3
Leases (Notes)
 6 Months Ended
Oct. 28, 2023
Leases [Abstract]  
Lessee, Operating Leases
Note 8. Leases
We recognize lease assets and lease liabilities on the condensed consolidated balance sheets for substantially all lease arrangements as required by FASB ASC 842, Leases (Topic 842). Our portfolio of leases consists of operating leases comprised of operations agreements which grant us the right to operate on-campus bookstores at colleges and universities; real estate leases for office and warehouse operations; and vehicle leases. We do not have finance leases or short-term leases (i.e., those with a term of twelve months or less).
We recognize a right of use ("ROU") asset and lease liability in our condensed consolidated balance sheets for leases with a term greater than twelve months. Options to extend or terminate a lease are included in the determination of the ROU asset and lease liability when it is reasonably certain that such options will be exercised. Our lease terms generally range from one year to fifteen years and a number of agreements contain minimum annual guarantees, many of which are adjusted at the start of each contract year based on the actual sales activity of the leased premises for the most recently completed contract year.
Payment terms are based on the fixed rates explicit in the lease, including minimum annual guarantees, and/or variable rates based on: i) a percentage of revenues or sales arising at the relevant premises ("variable commissions"), and/or ii) operating expenses, such as common area charges, real estate taxes and insurance. For contracts with fixed lease payments, including those with minimum annual guarantees, we recognize lease expense on a straight-line basis over the lease term or over the contract year in order to best reflect the pattern of usage of the underlying leased asset and our minimum obligations arising from these types of leases. Our lease agreements do not contain any material residual value guarantees, material restrictions or covenants.
We used our incremental borrowing rates to determine the present value of fixed lease payments based on the information available at the lease commencement date, as the rate implicit in the lease is not readily determinable. We utilized an estimated collateralized incremental borrowing rate as of the effective date or the commencement date of the lease, whichever is later.
The following table summarizes lease expense:
13 weeks ended26 weeks ended
October 28, 2023October 29, 2022October 28, 2023October 29, 2022
Variable lease expense$25,436 $25,281 $37,665 $40,465 
Operating lease expense46,902 52,998 69,291 75,860 
Net lease expense$72,338 $78,279 $106,956 $116,325 
The decrease in lease expense during the 26 weeks ended October 28, 2023 is primarily due to lower commission rates related to the shift from physical to digital course materials, closed stores, and the impact of the timing due to contract renewals, partially offset by higher sales for contracts based on a percentage of sales.
The following table summarizes our minimum fixed lease obligations, excluding variable commissions:
As of October 28, 2023
Remainder of Fiscal 2024$106,034 
Fiscal 202557,282 
Fiscal 202639,180 
Fiscal 202731,414 
Fiscal 202824,944 
Thereafter59,293 
Total lease payments318,147 
Less: imputed interest(31,536)
Operating lease liabilities at period end$286,611 
Future lease payment obligations related to leases that were entered into, but did not commence as of October 28, 2023, were not material. The following summarizes additional information related to our operating leases:
As of
October 28, 2023October 29, 2022
Weighted average remaining lease term (in years)4.6 years5.3 years
Weighted average discount rate4.3 %4.4 %
Supplemental cash flow information:
Cash payments for lease liabilities within operating activities$68,580 $75,876 
Right-of-use assets obtained in exchange for lease liabilities from initial recognition$69,959 $86,045 
v3.23.3
Supplementary Information (Notes)
 6 Months Ended
Oct. 28, 2023
Supplementary info [Abstract]  
Supplementary Information [Text Block]
Note 9. Supplementary Information
Restructuring and other charges
During the 13 and 26 weeks ended October 28, 2023, we recognized restructuring and other charges totaling $4,274 and $8,907, respectively, comprised primarily of $4,245 and $7,827, respectively, for costs primarily associated with professional service costs for restructuring and $29 and $1,080, respectively, for severance and other employee termination and benefit costs associated with elimination of various positions as part of cost reduction objectives ($2,311 is included in accrued liabilities in the condensed consolidated balance sheet as of October 28, 2023).
Pursuant to the July 28, 2023 Credit Agreement amendment, the Board established a committee consisting of three independent directors to explore, consider, solicit expressions of interest or proposals for, respond to any communications, inquiries or proposals regarding, and advise as to all strategic alternatives to effect a “Specified Liquidity Transaction” (as defined in the Credit Agreement). Restructuring and other expenses associated with the costs of this committee, as well as other related professional service costs, are expected to decrease when the Company concludes on a strategic alternative.
During the 13 and 26 weeks ended October 29, 2022, we recognized restructuring and other charges totaling $260 and $635, respectively, comprised primarily of costs associated with professional service costs for restructuring, process improvements.
v3.23.3
Stock-Based Compensation Stock-Based Compensation (Notes)
 6 Months Ended
Oct. 28, 2023
Share-Based Payment Arrangement [Abstract]  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
Note 10. Long-Term Incentive Plan Compensation Expense
During the 13 and 26 weeks ended October 28, 2023, we did not grant any long-term incentive plan awards. We recognized compensation expense for previously granted long-term incentive plan awards in selling and administrative expenses as follows:
13 weeks ended26 weeks ended
October 28,
2023		October 29,
2022		October 28,
2023		October 29,
2022
Stock-based awards
Restricted stock expense$4 $64 $11 $158 
Restricted stock units expense 448 820 1,016 1,686 
Performance share units expense — — — 10 
Stock option expense346 606 729 1,212 
Sub-total stock-based awards:$798 $1,490 $1,756 $3,066 
Cash settled awards
Phantom share units expense$(40)$51 $(129)$239 
Total compensation expense for long-term incentive awards$758 $1,541 $1,627 $3,305 
Total unrecognized compensation cost related to unvested awards as of October 28, 2023 was $4,001 and is expected to be recognized over a weighted-average period of 1.5 years.
v3.23.3
Income Taxes Income Taxes (Notes)
 6 Months Ended
Oct. 28, 2023
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]
Note 12. Income Taxes
Our provision for income taxes during interim reporting periods has historically been calculated by applying an estimate of the annual effective tax rate for the full fiscal year to ordinary income (loss) (pre-tax income (loss) excluding unusual or infrequently occurring discrete items) for the reporting period. For the 26 weeks ended October 28, 2023, and in accordance with ASC 740-270-30-18 “Income Taxes - Interim Reporting - Initial Measurement,” and paragraph 82 of FASB interpretation No. 18, "Accounting for Income Taxes in Interim Periods" ("FIN 18"), we computed our provision for income taxes based on the actual effective tax rate for the year-to-date period by applying the discrete method. We determined that as small changes in estimated ordinary income would result in significant changes in the estimated annual effective tax rate, the historical method would not provide a reliable estimate for the 26 weeks ended October 28, 2023. We believe that, at this time, the use of this discrete method represents the best estimate of our annual effective tax rate.
We recorded an income tax expense of $314 on pre-tax income of $25,168 during the 13 weeks ended October 28, 2023, which represented an effective income tax rate of 1.2% and an income tax benefit of $(383) on pre-tax income of $23,785 during the 13 weeks ended October 29, 2022, which represented an effective income tax rate of (1.6)%. We recorded an income tax expense of $303 on pre-tax loss of $(24,814) during the 26 weeks ended October 28, 2023, which represented an effective income tax rate of (1.2)% and an income tax expense of $464 on pre-tax loss of $(25,690) during the 26 weeks ended October 29, 2022, which represented an effective income tax rate of (1.8)%. The effective tax rate for the 26 weeks ended October 28, 2023 is lower than the prior year comparable period due to utilization of the discrete tax provision methodology discussed above.
In assessing the realizability of the deferred tax assets, management considered whether it is more likely than not that some or all of the deferred tax assets would be realized. As of October 28, 2023, we determined that it was more likely than not that we would not realize all deferred tax assets and our tax rate for the current fiscal year reflects this determination. We will continue to evaluate this position.
v3.23.3
Legal Proceedings (Notes)
 6 Months Ended
Oct. 28, 2023
Legal Proceedings
Note 13. Legal Proceedings
We are involved in a variety of claims, suits, investigations and proceedings that arise from time to time in the ordinary course of our business, including actions with respect to contracts, intellectual property, taxation, employment, benefits, personal injuries and other matters. The results of these proceedings in the ordinary course of business are not expected to have a material adverse effect on our condensed consolidated financial position, results of operations, or cash flows.
v3.23.3
Summary of Significant Accounting Policies (Policies)
 6 Months Ended
Oct. 28, 2023
Basis of Presentation
Basis of Presentation and Consolidation
Our condensed consolidated financial statements reflect our condensed consolidated financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States (“GAAP”). Net income (loss) is equal to comprehensive income (loss) on our condensed consolidated statement of operations. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements of the Company contain all
adjustments (consisting of only normal recurring adjustments) necessary to present fairly its consolidated financial position and the results of its operations and cash flows for the periods reported. These consolidated financial statements are condensed and therefore do not include all of the information and footnotes required by GAAP. All material intercompany accounts and transactions have been eliminated in consolidation.
Our fiscal year is comprised of 52 or 53 weeks, ending on the Saturday closest to the last day of April. Due to the seasonal nature of the business, the results of operations for the 13 and 26 weeks ended October 28, 2023 are not indicative of the results expected for the 52 weeks ending April 27, 2024 ("Fiscal 2024").
Liquidity and Going Concern
The accompanying condensed consolidated financial statements are prepared in accordance with U.S. GAAP applicable to a going concern. This presentation contemplates the realization of assets and the satisfaction of liabilities in the normal course of business and does not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described below.
Pursuant to ASC 205-40, Presentation of Financial Statements — Going Concern (“ASC 205-40”), management must evaluate whether there are conditions and events, considered in aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that these condensed consolidated financial statements are issued. In accordance with ASC 205-40, management’s analysis can only include the potential mitigating impact of management’s plans that have not been fully implemented as of the issuance date of these condensed consolidated financial statements if (a) it is probable that management’s plans will be effectively implemented on a timely basis, and (b) it is probable that the plans, when implemented, will alleviate the relevant conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern.
Our primary sources of cash are net cash flows from operating activities, funds available under our Credit Agreement, Term Loan Agreement, and short-term vendor financing. Our liquidity is highly dependent on the seasonal nature of our business, particularly with respect to course material sales, as sales are generally highest in the second and third fiscal quarters, when college students generally purchase textbooks for the upcoming Fall and Spring semesters, respectively. As of October 28, 2023, we had $35,341 of cash on hand, including $20,333 of restricted cash primarily related to segregated funds for commission due to Lids for logo merchandise sales as per the merchandising service provider agreement.
Our business was significantly negatively impacted by the COVID-19 pandemic during the years ended April 30, 2022 and May 1, 2021, as many schools adjusted their learning models and on-campus activities. Although most academic institutions have since reopened after the COVID-19 pandemic, the lingering impacts of the pandemic have resulted in changes in customer behaviors, lower enrollments, and an evolving educational landscape which continued to impact our financial results during the year ended April 29, 2023. Some institutions are still providing alternatives to traditional in-person instruction, including online and hybrid learning options and significantly reduced classroom sizes. The impact of COVID-19 store closings, as well as lower earnings during the year ended April 29, 2023, resulted in the loss of cash flows and increased borrowings that we would not otherwise have expected to incur.
We recognized Net Income from Continuing Operations of $24,854 and $24,168 for the 13 weeks ended October 28, 2023 and October 29, 2022, respectively, and a Net Loss from Continuing Operations of $(25,117) and $(26,154) for the 26 weeks ended October 28, 2023 and October 29, 2022, respectively, and we incurred a Net Loss from Continuing Operations of $(90,140), $(61,559), and $(133,569) for the years ended April 29, 2023, April 30, 2022, and May 1, 2021, respectively. Our Cash Flow (Used In) Provided by Operating Activities from Continuing Operations were $(47,160) and $10,073 for the 26 weeks ended October 28, 2023 and October 29, 2022, respectively, and were $90,513, $(16,195), and $27,049, for the years ended April 29, 2023, April 30, 2022, and May 1, 2021, respectively. The tightening of our available credit commitments, including the elimination and repayment of our FILO Facility in fiscal year 2023 of $40,000, had a significant impact on our liquidity during fiscal year 2023 and fiscal year 2024, including our ability to make timely vendor payments and school commission payments.
Our losses and projected cash needs, combined with our current liquidity level, raised substantial doubt about our ability to continue as a going concern as of the year ended April 29, 2023, which Management subsequently remediated by implementing a plan to improve the Company’s liquidity and successfully alleviate substantial doubt including (1) raising additional liquidity and (2) taking additional operational restructuring actions.
Debt amendments
On October 10, 2023, we amended our existing Credit Agreement to revise certain reporting requirements to the administrative agent and lenders under the Credit Agreement. The amendment introduced a Specified Liquidity Transaction Fee of $3,800 that would become due and payable at the earlier to occur of (1) January 31, 2024, to the extent a Specified Liquidity Transaction (as defined in the Credit Agreement) has not been consummated prior to such date (or such later date that is up to thirty days thereafter to the extent agreed to in writing by the Administrative Agent in its sole discretion) or (b) an Event of Default under the Credit Agreement.
On July 28, 2023, we amended our existing Credit Agreement to (i) extend the maturity date of the Credit Agreement to December 28, 2024, (ii) reduce advance rates with respect to the borrowing base by 1000 basis points on September 2, 2024 (in lieu of the reductions previously contemplated for September 2023), (iii) subject to the conditions set forth in such amendment, add a CARES Act tax refund claim to the borrowing base, from April 1, 2024 through July 31, 2024, (iv) amend the financial maintenance covenant to require Availability (as defined in the Credit Agreement) at all times greater than the greater of (x) 10% of the Aggregate Loan Cap (as defined in the Credit Agreement) and (y) (A) $32,500 minus, subject to the conditions set forth in such amendment, (B) (a) $7,500 for the period of April 1, 2024 through and including April 30, 2024, (b) $2,500 for the period of May 1, 2024 through and including May 31, 2024 and (c) $0 at all other times, (v) add a minimum Consolidated EBITDA (as defined in the Credit Agreement) financial maintenance covenant, and (vi) amend certain negative and affirmative covenants and add certain additional covenants, all as more particularly set forth in such amendment. The amendment also requires that we appoint a Chief Restructuring Officer and that, by August 11, 2023, we (i) appoint two independent members to the board of directors of the Company from prospective candidates that have been previously disclosed to the Administrative Agent and the Lenders and (ii) appoint a committee of the board of directors of the Company to consist of three board members (two of whom will be the new independent directors), and as of the date of this filing, we have satisfied such requirements. The committee’s responsibilities will include, among other things, to explore, consider, solicit expressions of interest or proposals for, respond to any communications, inquiries or proposals regarding, and advise as to all strategic alternatives to effect a “Specified Liquidity Transaction” (as defined in the Credit Agreement). There can be no guarantee or assurances that any such transaction or transactions be consummated. We must pay (i) a fee of 0.50% of the outstanding principal amount of the commitments under the Credit Agreement March 2023 amendment (as defined in the Credit Agreement) on the closing date (in lieu of the deferred fee previously contemplated in connection with the March 2023 amendment (as defined in the Credit Agreement)) and (ii) a fee of 1.00% of the outstanding principal amount of the commitments under the Credit Agreement as of the closing date on the earlier to occur of September 2, 2024 and an Event of Default (as defined in the Credit Agreement).
On July 28, 2023, we amended our Term Loan Agreement to (i) extend the maturity date of the Term Loan Agreement to April 7, 2025, (ii) allow for interest to be paid in kind until September 2, 2024, (iii) amend the 1.50% anniversary fee to recur on June 7 of each year that the Term Loan Agreement remains outstanding, with 2024 fee deferred to the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement) and (iv) amend certain negative covenants and affirmative and add certain additional covenants. We must pay a fee of $50,000 to the lenders under the Term Loan Agreement on the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement).
Operational restructuring plans
During Fiscal 2023, we implemented a significant cost reduction program designed to streamline our operations, maximize productivity and drive profitability. We reduced our workforce, eliminated duplicate administrative headcounts at all levels, implemented improved system development processes to reduce maintenance costs, reduced capital expenditures, and evaluated operating contractual obligations for cost savings. Over the last year, we have achieved annualized savings of $30,000 to $35,000 from these cost savings initiatives. Additionally, during Fiscal 2024, Management's planned to implement further cost savings measures, including reduction of gross capital expenditures, amounting to approximately $25,000, of which approximately $14,000 has been achieved during the 26 weeks ended October 28, 2023. Management believes that these plans are within its control and will be focused on implementing as outlined.
During the 13 weeks ended October 28, 2023, Net Income from Continuing Operations increased by $686 compared to the prior year period. Excluding interest expense and restructuring and other charges Net Income from Continuing Operations improved by $10,478 during the 13 weeks ended October 28, 2023 compared to the prior year period. During the 26 weeks ended October 28, 2023, Net Loss from Continuing Operations decreased by $1,037 compared to the prior year period. Excluding interest expense and restructuring and other charges Net Loss from Continuing Operations decreased by $19,473 during the 26 weeks ended October 28, 2023 compared to the prior year period. The improvements in Net Income from Continuing Operations during the 13 and 26 weeks are primarily due to operational improvements and cost savings initiatives.
Management believes that the expected impact on our liquidity and cash flows resulting from the debt amendments and the operational initiatives outlined above are sufficient to enable the Company to meet its obligations for at least twelve months from the issuance date of these condensed consolidated financial statements and to continue to alleviate the conditions that initially raised substantial doubt about the Company's ability to continue as a going concern.
Seasonality
Our business is highly seasonal. Our quarterly results also may fluctuate depending on the timing of the start of the various schools' semesters, as well as shifts in our fiscal calendar dates. These shifts in timing may affect the comparability of our results across periods. Our retail business is highly seasonal, with the major portion of sales and operating profit realized during the second and third fiscal quarters, when college students generally purchase and rent textbooks for the upcoming semesters. Sales attributable to our wholesale business are generally highest in our first, second and third quarters, as it sells textbooks and other course materials for retail distribution. See Revenue Recognition and Deferred Revenue discussion below.
Use of Estimates
Use of Estimates
In preparing financial statements in conformity with GAAP, we are required to make estimates and assumptions that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
Merchandise Inventories
Merchandise Inventories
Merchandise inventories, which consist of finished goods, are stated at the lower of cost or market. Market value of our inventory, which is all purchased finished goods, is determined based on its estimated net realizable value, which is generally the selling price less normally predictable costs of disposal and transportation. Reserves for non-returnable inventory are based on our history of liquidating non-returnable inventory, which includes certain significant assumptions, including markdowns, sales below cost, inventory aging and expected demand.
Cost is determined primarily by the retail inventory method for our Retail segment. Our textbook and trade book inventories, for Retail and Wholesale, are valued using the LIFO method and the related reserve was not material to the recorded amount of our inventories. There were no LIFO adjustments in Fiscal 2023, Fiscal 2022 and Fiscal 2021.
For our physical bookstores, we also estimate and accrue shortage for the period between the last physical count of inventory and the balance sheet date. Shortage rates are estimated and accrued based on historical rates and can be affected by changes in merchandise mix and changes in actual shortage trends.
The Retail Segment fulfillment order is directed first to our wholesale business before other sources of inventory are utilized. The products that we sell originate from a wide variety of domestic and international vendors. After internal sourcing, the bookstore purchases textbooks from outside suppliers and publishers.
Textbook Rentals Inventories
Textbook Rental Inventories
Physical textbooks out on rent are categorized as textbook rental inventories. At the time a rental transaction is consummated, the book is removed from merchandise inventories and moved to textbook rental inventories at cost. The cost of the book is amortized down to its estimated residual value over the rental period. The related amortization expense is included in cost of goods sold. At the end of the rental period, upon return, the book is removed from textbook rental inventories and recorded in merchandise inventories at its amortized cost.
Revenue Recognition
Revenue Recognition and Deferred Revenue
Product sales and rentals
The majority of our revenue is derived from the sale of products through our bookstore locations, including virtual bookstores, and our bookstore affiliated e-commerce websites, and contains a single performance obligation. Revenue from sales of our products is recognized at the point in time when control of the products is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for the products. For additional information, see Note 3. Revenue.
Retail product revenue is recognized when the customer takes physical possession of our products, which occurs either at the point of sale for products purchased at physical locations or upon receipt of our products by our customers for products ordered through our websites and virtual bookstores. Wholesale product revenue is recognized upon shipment of physical textbooks at which point title passes and risk of loss is transferred to the customer. Additional revenue is recognized for shipping charges billed to customers and shipping costs are accounted for as fulfillment costs within cost of goods sold.
Revenue from the sale of digital textbooks, which contains a single performance obligation, is recognized at the point of sale as product revenue in our condensed consolidated financial statements. A software feature is embedded within the content of our digital textbooks, such that upon expiration of the term the customer is no longer able to access the content. While the sale of the digital textbook allows the customer to access digital content for a fixed period of time, once the digital content is delivered to the customer, our performance obligation is complete.
Revenue from the rental of physical textbooks is deferred and recognized over the rental period based on the passage of time commencing at the point of sale, when control of the product transfers to the customer and is recognized as rental income in our condensed consolidated financial statements. Rental periods are typically for a single semester and are always less than one year in duration. We offer a buyout option to allow the purchase of a rented physical textbook at the end of the rental period if the customer desires to do so. We record the buyout purchase when the customer exercises and pays the buyout option price which is determined at the time of the buyout. In these instances, we accelerate any remaining deferred rental revenue at the point of sale.
Revenue recognized for our BNC First Day offerings is consistent with our policies outlined above for product, digital and rental sales, net of an anticipated opt-out or return provision. Given the growth of BNC First Day programs, the timing of cash collection from our school partners may shift to periods subsequent to when the revenue is recognized. When a school adopts our BNC First Day equitable and inclusive access offerings, cash collection from the school generally occurs after the institution's drop/add dates, which is later in the working capital cycle, particularly in our third quarter given the timing of the Spring Term and our quarterly reporting period, as compared to direct-to-student point-of-sale transactions where cash is generally collected during the point-of-sale transaction or within a few days from the credit card processor.
We estimate returns based on an analysis of historical experience. A provision for anticipated merchandise returns is provided through a reduction of sales and cost of goods sold in the period that the related sales are recorded.
For sales and rentals involving third-party products, we evaluate whether we are acting as a principal or an agent. Our determination is based on our evaluation of whether we control the specified goods or services prior to transferring them to the
customer. There are significant judgments involved in determining whether we control the specified goods or services prior to transferring them to the customer including whether we have the ability to direct the use of the good or service and obtain substantially all of the remaining benefits from the good or service. For those transactions where we are the principal, we record revenue on a gross basis, and for those transactions where we are an agent to a third-party, we record revenue on a net basis.
As contemplated by the F/L Relationship related merchandising agreement and e-commerce agreement, logo general merchandise sales are fulfilled by Lids and Fanatics on our behalf and we recognize commission revenue earned for these sales on a net basis in our condensed consolidated financial statements.
We do not have gift card or customer loyalty programs. We do not treat any promotional offers as expenses. Sales tax collected from our customers is excluded from reported revenues. Our payment terms are generally 30 days and do not extend beyond one year.
Service and other revenue
Service and other revenue is primarily derived from brand partnership marketing services which includes promotional activities and advertisements within our physical bookstores and web properties performed on behalf of third-party customers, shipping and handling, and revenue from other programs.
Brand partnership marketing agreements often include multiple performance obligations which are individually negotiated with our customers. For these arrangements that contain distinct performance obligations, we allocate the transaction price based on the relative standalone selling price method by comparing the standalone selling price (“SSP”) of each distinct performance obligation to the total value of the contract. The revenue is recognized as each performance obligation is satisfied, typically at a point in time for brand partnership marketing service and overtime for advertising efforts as measured based upon the passage of time for contracts that are based on a stated period of time or the number of impressions delivered for contracts with a fixed number of impressions.
Lessee, Leases [Policy Text Block]
We recognize lease assets and lease liabilities on the condensed consolidated balance sheets for substantially all lease arrangements as required by FASB ASC 842, Leases (Topic 842). Our portfolio of leases consists of operating leases comprised of operations agreements which grant us the right to operate on-campus bookstores at colleges and universities; real estate leases for office and warehouse operations; and vehicle leases. We do not have finance leases or short-term leases (i.e., those with a term of twelve months or less).
We recognize a right of use ("ROU") asset and lease liability in our condensed consolidated balance sheets for leases with a term greater than twelve months. Options to extend or terminate a lease are included in the determination of the ROU asset and lease liability when it is reasonably certain that such options will be exercised. Our lease terms generally range from one year to fifteen years and a number of agreements contain minimum annual guarantees, many of which are adjusted at the start of each contract year based on the actual sales activity of the leased premises for the most recently completed contract year.
Payment terms are based on the fixed rates explicit in the lease, including minimum annual guarantees, and/or variable rates based on: i) a percentage of revenues or sales arising at the relevant premises ("variable commissions"), and/or ii) operating expenses, such as common area charges, real estate taxes and insurance. For contracts with fixed lease payments, including those with minimum annual guarantees, we recognize lease expense on a straight-line basis over the lease term or over the contract year in order to best reflect the pattern of usage of the underlying leased asset and our minimum obligations arising from these types of leases. Our lease agreements do not contain any material residual value guarantees, material restrictions or covenants.
We used our incremental borrowing rates to determine the present value of fixed lease payments based on the information available at the lease commencement date, as the rate implicit in the lease is not readily determinable. We utilized an estimated collateralized incremental borrowing rate as of the effective date or the commencement date of the lease, whichever is later.
Cost of Sales, Policy [Policy Text Block]
Cost of Sales
Our cost of sales primarily includes costs such as merchandise costs, textbook rental amortization, content development cost amortization, warehouse costs related to inventory management and order fulfillment, insurance, certain payroll costs, and management service agreement costs, including rent expense, related to our college and university contracts and other facility related expenses.
Selling, General and Administrative Expenses, Policy [Policy Text Block]
Selling and Administrative Expenses
Our selling and administrative expenses consist primarily of store payroll and store operating expenses. Selling and administrative expenses also include long-term incentive plan compensation expense and general office expenses, such as merchandising, procurement, field support, finance and accounting. Shared-service costs such as human resources, legal, treasury, information technology, and various other corporate level expenses and other governance functions, are not allocated to a specific reporting segment and are recorded in Corporate Services.
Consolidation, Subsidiaries or Other Investments, Consolidated Entities, Policy [Policy Text Block]
Intercompany Eliminations
The eliminations are primarily related to the following intercompany activities:
•The sales eliminations represent the elimination of Wholesale sales and fulfillment service fees to Retail and the elimination of Retail commissions earned from Wholesale, and
•These cost of sales eliminations represent (i) the recognition of intercompany profit for Retail inventory that was purchased from Wholesale in a prior period that was subsequently sold to external customers during the current period and the elimination of Wholesale service fees charged for fulfillment of inventory for virtual store sales, net of (ii) the elimination of intercompany profit for Wholesale inventory purchases by Retail that remain in ending inventory at the end of the current period.
Our international operations are not material, and the majority of the revenue and total assets are within the United States.
Fair Values of Financial Instruments
In accordance with ASC No. 820, Fair Value Measurements and Disclosures, the fair value of an asset is considered to be the price at which the asset could be sold in an orderly transaction between unrelated knowledgeable and willing parties. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. Assets and liabilities recorded at fair value are measured using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:
Level 1—Observable inputs that reflect quoted prices in active markets
Level 2—Inputs other than quoted prices in active markets that are either directly or indirectly observable
Level 3—Unobservable inputs in which little or no market data exists, therefore requiring us to develop our own assumptions
Our financial instruments include cash and cash equivalents, receivables, accrued liabilities and accounts payable. The fair value of cash and cash equivalents, receivables, accrued liabilities and accounts payable approximates their carrying values because of the short-term nature of these instruments, which are all considered Level 1. The fair value of short-term and long-term debt approximates its carrying value.
Net Earnings (Loss) Per Share
Earnings Per Share
Basic EPS is computed based upon the weighted average number of common shares outstanding for the year. Diluted EPS is computed based upon the weighted average number of common shares outstanding for the year plus the dilutive effect of common stock equivalents using the treasury stock method and the average market price of our common stock for the year. We include participating securities (unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents) in the computation of EPS pursuant to the two-class method. Our participating securities consist solely of unvested restricted stock awards, which have contractual participation rights equivalent to those of stockholders of unrestricted common stock. The two-class method of computing earnings per share is an allocation method that calculates earnings per share for common stock and participating securities. During periods of net loss, no effect is given to the participating securities because they do not share in the losses of the Company.
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] During the 13 and 26 weeks ended October 28, 2023, we did not grant any long-term incentive plan awards.
Income Tax, Policy [Policy Text Block]
Income Taxes
The provision for income taxes includes federal, state and local income taxes currently payable and those deferred because of temporary differences between the financial statement and tax basis of assets and liabilities. The deferred tax assets and liabilities are measured using the enacted tax rates and laws that are expected to be in effect when the differences reverse. We regularly review deferred tax assets for recoverability and establish a valuation allowance, if determined to be necessary.
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy
Restricted Cash
As of October 28, 2023 and October 29, 2022, we had restricted cash of $20,333 and $15,590, respectively, comprised of $19,388 and $14,686, respectively, in prepaid and other current assets in the condensed consolidated balance sheet related to segregated funds for commission due to Lids for logo merchandise sales as per the Lids service provider merchandising agreement, and $945 and $904, respectively, in other noncurrent assets in the condensed consolidated balance sheet related to amounts held in trust for future distributions related to employee benefit plans.
New Accounting Pronouncements, Policy
Recent Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This guidance will be effective for the Company for the annual report for the fiscal year ending April 26, 2025 and subsequent interim periods. Early adoption is permitted and retrospective adoption is required for all prior periods presented. We are currently assessing this guidance and determining the impact on our condensed consolidated financial statements.
v3.23.3
Compensation Related Costs, Share Based Payments (Policies)
 6 Months Ended
Oct. 28, 2023
Share-Based Payment Arrangement [Abstract]  
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] During the 13 and 26 weeks ended October 28, 2023, we did not grant any long-term incentive plan awards.
v3.23.3
Debt (Tables)
 6 Months Ended
Oct. 28, 2023
Debt Disclosure [Abstract]  
Schedule of Discontinued Operations Balance Sheet
The following table summarizes the assets and liabilities of the Assets Held for Sale included in the condensed consolidated balance sheets:
As of
April 29, 2023October 29, 2022
Cash and cash equivalents$1,057 $929 
Receivables, net480 721 
Prepaid expenses and other current assets901 2,421 
Property and equipment, net19,523 20,621 
Intangible assets, net402 954 
Goodwill4,700 4,700 
Deferred tax assets, net130 — 
Other noncurrent assets237 212 
Assets held for sale$27,430 $30,558 
Accounts payable$211 $161 
Accrued liabilities8,212 5,061 
Other long-term liabilities— 20 
Liabilities held for sale$8,423 $5,242 
Schedule of Discontinued Operations Statement of Income The following table summarizes the operating results of the discontinued operations for the periods indicated:
13 weeks ended26 weeks ended
Dollars in thousandsOctober 28, 2023October 29, 2022October 28, 2023October 29, 2022
Total sales$— $8,465 $2,784 $17,649 
Cost of sales (a)
— 1,772 76 3,472 
Gross profit (a)
— 6,693 2,708 14,177 
Selling and administrative expenses643 8,131 2,924 16,277 
Depreciation and amortization3 503 3 2,140 
Gain on sale of business— — (3,068)— 
Impairment loss (non-cash) (b)
— — 610 — 
Restructuring costs (c)
10 — 3,297 — 
Transaction costs18 — 13 — 
Operating loss(674)(1,941)(1,071)(4,240)
Income tax expense— 83 20 169 
Loss from discontinued operations, net of tax$(674)$(2,024)$(1,091)$(4,409)
(a) Cost of sales and Gross margin for the DSS Segment includes amortization expense (non-cash) related to content development costs of $1,618 and $3,169 for the 13 and 26 weeks ended October 29, 2022, respectively.
(b)    During the 26 weeks ended October 28, 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 26 weeks ended October 28, 2023, we recognized restructuring and other charges of $3,297 comprised of severance and other employee termination costs.
v3.23.3
Revenue (Tables)
 6 Months Ended
Oct. 28, 2023
Disaggregation of Revenue [Line Items]  
Disaggregation of Revenue [Table Text Block]
Disaggregation of Revenue
The following table disaggregates the revenue associated with our major product and service offerings:
13 weeks ended26 weeks ended
October 28, 2023October 29, 2022October 28, 2023October 29, 2022
Retail
Course Materials Product Sales $435,370 $416,410 $573,906 $547,262 
General Merchandise Product Sales (a)
105,022 122,648 193,702 211,472 
Service and Other Revenue (b)
18,263 18,218 24,996 24,137 
Retail Product and Other Sales sub-total558,655 557,276 792,604 782,871 
Course Materials Rental Income40,681 41,334 52,192 52,246 
Retail Total Sales$599,336 $598,610 $844,796 $835,117 
Wholesale Sales$20,973 $21,120 $59,764 $58,203 
Eliminations (c)
$(9,930)$(11,097)$(30,020)$(30,013)
Total Sales$610,379 $608,633 $874,540 $863,307 
(a)Logo general merchandise sales for the Retail Segment are recognized on a net basis as commission revenue in the condensed consolidated financial statements.
(b)Service and other revenue primarily relates to brand partnership marketing and other service revenues.
(c)The sales eliminations represent the elimination of Wholesale sales and fulfillment service fees to Retail and the elimination of Retail commissions earned from Wholesale.
Contract with Customer, Asset and Liability [Table Text Block] The following table presents changes in deferred revenue associated with our contract liabilities:
26 weeks ended
October 28, 2023October 29, 2022
Deferred revenue at the beginning of period$15,356 $16,475 
Additions to deferred revenue during the period97,773 96,121 
Reductions to deferred revenue for revenue recognized during the period(71,164)(68,676)
Deferred revenue balance at the end of period:$41,965 $43,920 
Balance Sheet classification:
Accrued liabilities$38,105 $39,504 
Other long-term liabilities3,860 4,416 
Deferred revenue balance at the end of period:$41,965 $43,920 
v3.23.3
Segment Reporting Segment Reporting (Tables)
 6 Months Ended
Oct. 28, 2023
Segment Reporting Information [Line Items]  
Schedule of Segment Reporting Information, by Segment [Table Text Block]
Summarized financial information for our reportable segments is reported below:
13 weeks ended26 weeks ended
October 28, 2023October 29, 2022October 28, 2023October 29, 2022
Sales
Retail$599,336 $598,610 $844,796 $835,117 
Wholesale20,973 21,120 59,764 58,203 
Eliminations(9,930)(11,097)(30,020)(30,013)
Total Sales$610,379 $608,633 $874,540 $863,307 
Gross Profit
Retail$125,529 $129,502 $175,820 $183,495 
Wholesale6,090 5,455 11,884 12,354 
Eliminations4,623 3,184 (828)(1,703)
Total Gross Profit$136,242 $138,141 $186,876 $194,146 
Selling and Administrative Expenses
Retail$77,182 $90,086 $146,355 $169,090 
Wholesale3,492 3,867 6,880 7,998 
Corporate Services5,287 5,075 10,205 12,289 
Eliminations— (74)(3)(82)
Total Selling and Administrative Expenses$85,961 $98,954 $163,437 $189,295 
Depreciation and Amortization
Retail$8,911 $8,869 $17,877 $18,398 
Wholesale1,254 1,370 2,531 2,719 
Corporate Services10 17 20 35 
Total Depreciation and Amortization$10,175 $10,256 $20,428 $21,152 
Restructuring and Other Charges
Retail$29 $— $555 $— 
Wholesale— — 526 — 
Corporate Services4,245 260 7,826 635 
Total Restructuring and Other Charges$4,274 $260 $8,907 $635 
Operating Income (Loss)
Retail$39,407 $30,547 $11,033 $(3,993)
Wholesale1,344 218 1,947 1,637 
Corporate Services(9,542)(5,352)(18,051)(12,959)
Elimination 4,623 3,258 (825)(1,621)
Total Operating Income (Loss)$35,832 $28,671 $(5,896)$(16,936)
Interest Expense, net$10,664 $4,886 $18,918 $8,754 
Total Income (Loss) from Continuing Operations Before Income Taxes$25,168 $23,785 $(24,814)$(25,690)
v3.23.3
Net Earnings (Loss) Per Share (Tables)
 6 Months Ended
Oct. 28, 2023
Reconciliation of Basic and Diluted Loss Per Share The following is a reconciliation of the basic and diluted earnings per share calculation:
13 weeks ended26 weeks ended
(shares in thousands)October 28, 2023October 29, 2022October 28, 2023October 29, 2022
Numerator for basic earnings per share:
Net income (loss) from continuing operations$24,854 $24,168 $(25,117)$(26,154)
Less allocation of earnings to participating securities(3)(11)— — 
Net income (loss) from continuing operations available to common shareholders$24,851 $24,157 $(25,117)$(26,154)
Loss from discontinued operations, net of tax
(674)(2,024)(1,091)(4,409)
Net income (loss) available to common shareholders$24,177 $22,133 $(26,208)$(30,563)
Numerator for diluted earnings per share:
Net income (loss) from continuing operations$24,851 $24,157 $(25,117)$(26,154)
Allocation of earnings to participating securities3 11 — — 
Less diluted allocation of earnings to participating securities(3)(11)— — 
Net income (loss) from continuing operations available to common shareholders$24,851 $24,157 $(25,117)$(26,154)
Loss from discontinued operations, net of tax
(674)(2,024)(1,091)(4,409)
Net income (loss) available to common shareholders$24,177 $22,133 $(26,208)$(30,563)
Denominator for basic earnings per share:
Basic weighted average shares of Common Stock52,791 52,438 52,716 52,305 
Denominator for diluted earnings per share:
Basic weighted average shares of Common Stock52,791 52,438 52,716 52,305 
Average dilutive restricted stock units74 141 — — 
Average dilutive restricted shares5 10 — — 
Average dilutive stock options— 606 — — 
Diluted weighted average shares of Common Stock 52,870 53,195 52,716 52,305 
Earnings (Loss) per share of Common Stock:
Basic
Continuing operations$0.47 $0.46 $(0.48)$(0.50)
Discontinuing operations(0.01)(0.04)(0.02)(0.08)
Total Basic Earnings per share$0.46 $0.42 $(0.50)$(0.58)
Diluted
Continuing operations$0.47 $0.46 $(0.48)$(0.50)
Discontinuing operations(0.01)(0.04)(0.02)(0.08)
Total Diluted Earnings per share$0.46 $0.42 $(0.50)$(0.58)
v3.23.3
Debt (Tables)
 6 Months Ended
Oct. 28, 2023
Debt Disclosure [Abstract]  
Schedule of Debt
As of
Maturity Date
October 28, 2023October 29, 2022
Credit FacilityDecember 28, 2024$204,881 $222,000 
Term LoanApril 7, 202530,863 30,000 
sub-total235,744 252,000 
Less: Deferred financing costs(1,871)(1,555)
Total debt$233,873 $250,445 
Balance Sheet classification:
Short-term borrowings$— $— 
Long-term borrowings233,873 250,445 
Total debt$233,873 $250,445 
v3.23.3
Leases (Tables)
 6 Months Ended
Oct. 28, 2023
Leases [Abstract]  
Lessee, Operating Lease, Liability, Maturity [Table Text Block]
The following table summarizes our minimum fixed lease obligations, excluding variable commissions:
As of October 28, 2023
Remainder of Fiscal 2024$106,034 
Fiscal 202557,282 
Fiscal 202639,180 
Fiscal 202731,414 
Fiscal 202824,944 
Thereafter59,293 
Total lease payments318,147 
Less: imputed interest(31,536)
Operating lease liabilities at period end$286,611 
Supplemental Operating Lease Disclosures [Table Text Block] The following summarizes additional information related to our operating leases:
As of
October 28, 2023October 29, 2022
Weighted average remaining lease term (in years)4.6 years5.3 years
Weighted average discount rate4.3 %4.4 %
Supplemental cash flow information:
Cash payments for lease liabilities within operating activities$68,580 $75,876 
Right-of-use assets obtained in exchange for lease liabilities from initial recognition$69,959 $86,045 
Lease, Cost
The following table summarizes lease expense:
13 weeks ended26 weeks ended
October 28, 2023October 29, 2022October 28, 2023October 29, 2022
Variable lease expense$25,436 $25,281 $37,665 $40,465 
Operating lease expense46,902 52,998 69,291 75,860 
Net lease expense$72,338 $78,279 $106,956 $116,325 
v3.23.3
Stock-Based Compensation Stock-Based Compensation (Tables)
 6 Months Ended
Oct. 28, 2023
Share-Based Payment Arrangement [Abstract]  
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block] We recognized compensation expense for previously granted long-term incentive plan awards in selling and administrative expenses as follows:
13 weeks ended26 weeks ended
October 28,
2023		October 29,
2022		October 28,
2023		October 29,
2022
Stock-based awards
Restricted stock expense$4 $64 $11 $158 
Restricted stock units expense 448 820 1,016 1,686 
Performance share units expense — — — 10 
Stock option expense346 606 729 1,212 
Sub-total stock-based awards:$798 $1,490 $1,756 $3,066 
Cash settled awards
Phantom share units expense$(40)$51 $(129)$239 
Total compensation expense for long-term incentive awards$758 $1,541 $1,627 $3,305 
v3.23.3
Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended 12 Months Ended
Oct. 10, 2023
Jul. 28, 2023
May 24, 2023
Mar. 08, 2023
Oct. 28, 2023
Jul. 29, 2023
Oct. 29, 2022
Jul. 30, 2022
Jul. 31, 2021
Oct. 28, 2023
Oct. 29, 2022
Apr. 29, 2023
Apr. 30, 2022
May 01, 2021
Restricted Cash         $ 20,333   $ 15,590     $ 20,333 $ 15,590      
Restricted Cash, Current         19,388   14,686     19,388 14,686      
Restricted Cash, Noncurrent         945   904     945 904      
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Including Disposal Group and Discontinued Operations         35,341   32,886     35,341 32,886      
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent         24,854   24,168     (25,117) (26,154) $ (90,140) $ (61,559) $ (133,569)
Disposal Group, Including Discontinued Operation, Revenue         0   8,465     2,784 17,649      
Disposal Group, Including Discontinued Operations, Impairment Expense         0   0     610 0      
Disposal Group, Including Discontinued Operation, Costs of Goods Sold         0   1,772     76 3,472      
Disposal Group, Including Discontinued Operation, Gross Profit (Loss)         0   6,693     2,708 14,177      
Disposal Group, Including Discontinued Operation, General and Administrative Expense         643   8,131     2,924 16,277      
Disposal Group, Including Discontinued Operation, Depreciation and Amortization         3   503     3 2,140      
Disposal Group, Including Discontinued Operation, Other Income         0   0     (3,068) 0      
Disposal Group, Including Discontinued Operation, Other Expense         10   0     3,297 0      
Disposal Group, Including Discontinued Operation, Transaction Costs         18   0     13 0      
Net Cash Provided by (Used in) Operating Activities, Continuing Operations           $ 90,513   $ (16,195) $ 27,049 (47,160) 10,073      
Short-term Debt         0   0     $ 0 0 40,000    
Savings Initiatives                   During Fiscal 2023, we implemented a significant cost reduction program designed to streamline our operations, maximize productivity and drive profitability. We reduced our workforce, eliminated duplicate administrative headcounts at all levels, implemented improved system development processes to reduce maintenance costs, reduced capital expenditures, and evaluated operating contractual obligations for cost savings. Over the last year, we have achieved annualized savings of $30,000 to $35,000 from these cost savings initiatives. Additionally, during Fiscal 2024, Management's planned to implement further cost savings measures, including reduction of gross capital expenditures, amounting to approximately $25,000, of which approximately $14,000 has been achieved during the 26 weeks ended October 28, 2023. Management believes that these plans are within its control and will be focused on implementing as outlined.During the 13 weeks ended October 28, 2023, Net Income from Continuing Operations increased by $686 compared to the prior year period. Excluding interest expense and restructuring and other charges Net Income from Continuing Operations improved by $10,478 during the 13 weeks ended October 28, 2023 compared to the prior year period. During the 26 weeks ended October 28, 2023, Net Loss from Continuing Operations decreased by $1,037 compared to the prior year period. Excluding interest expense and restructuring and other charges Net Loss from Continuing Operations decreased by $19,473 during the 26 weeks ended October 28, 2023 compared to the prior year period. The improvements in Net Income from Continuing Operations during the 13 and 26 weeks are primarily due to operational improvements and cost savings initiatives.        
Disposal Group, Including Discontinued Operation, Operating Income (Loss)         (674)   (1,941)     $ (1,071) (4,240)      
Discontinued Operation, Tax Effect of Discontinued Operation         0   83     20 169      
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent         (674)   (2,024)     (1,091) (4,409)      
Disposal Group, Including Discontinued Operation, Cash and Cash Equivalents             929       929 1,057    
Disposal Group, Including Discontinued Operation, Accounts, Notes and Loans Receivable, Net             721       721 480    
Disposal Group, Including Discontinued Operation, Prepaid and Other Assets, Current             2,421       2,421 901    
Disposal Group, Including Discontinued Operation, Property, Plant and Equipment, Current             20,621       20,621 19,523    
Disposal Group, Including Discontinued Operation, Intangible Assets, Current             954       954 402    
Disposal Group, Including Discontinued Operation, Goodwill, Current             4,700       4,700 4,700    
Disposal Group, Including Discontinued Operation, Deferred Tax Assets             0       0 130    
Disposal Group, Including Discontinued Operation, Other Assets, Noncurrent             212       212 237    
Disposal Group, Including Discontinued Operation, Assets, Current             30,558       30,558 27,430    
Disposal Group, Including Discontinued Operation, Accounts Payable, Current             161       161 211    
Disposal Group, Including Discontinued Operation, Accrued Liabilities, Current             5,061       5,061 8,212    
Disposal Group, Including Discontinued Operation, Other Liabilities, Noncurrent             20       20 0    
Disposal Group, Including Discontinued Operation, Liabilities, Current             5,242       5,242 $ 8,423    
Gain (Loss) on Disposition of Business                   3,068        
Proceeds from Divestiture of Businesses         $ 20,000                  
Property, Plant and Equipment                            
Disposal Group, Including Discontinued Operations, Impairment Expense                   119        
Property Subject to Operating Lease                            
Disposal Group, Including Discontinued Operations, Impairment Expense                   $ 491        
Amendment July2023                            
Long-term Debt, Description   On July 28, 2023, we amended our Term Loan Agreement to (i) extend the maturity date of the Term Loan Agreement to April 7, 2025, (ii) allow for interest to be paid in kind until September 2, 2024, (iii) amend the 1.50% anniversary fee to recur on June 7 of each year that the Term Loan Agreement remains outstanding, with 2024 fee deferred to the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement) and (iv) amend certain negative covenants and affirmative and add certain additional covenants. We must pay a fee of $50,000 to the lenders under the Term Loan Agreement on the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement).                        
Amendment July2023                            
Long-term Debt, Description   On July 28, 2023, we amended our existing Credit Agreement to (i) extend the maturity date of the Credit Agreement to December 28, 2024, (ii) reduce advance rates with respect to the borrowing base by 1000 basis points on September 2, 2024 (in lieu of the reductions previously contemplated for September 2023), (iii) subject to the conditions set forth in such amendment, add a CARES Act tax refund claim to the borrowing base, from April 1, 2024 through July 31, 2024, (iv) amend the financial maintenance covenant to require Availability (as defined in the Credit Agreement) at all times greater than the greater of (x) 10% of the Aggregate Loan Cap (as defined in the Credit Agreement) and (y) (A) $32,500 minus, subject to the conditions set forth in such amendment, (B) (a) $7,500 for the period of April 1, 2024 through and including April 30, 2024, (b) $2,500 for the period of May 1, 2024 through and including May 31, 2024 and (c) $0 at all other times, (v) add a minimum Consolidated EBITDA (as defined in the Credit Agreement) financial maintenance covenant, and (vi) amend certain negative and affirmative covenants and add certain additional covenants, all as more particularly set forth in such amendment. The amendment also requires that we appoint a Chief Restructuring Officer and that, by August 11, 2023, we (i) appoint two independent members to the board of directors of the Company from prospective candidates that have been previously disclosed to the Administrative Agent and the Lenders and (ii) appoint a committee of the board of directors of the Company to consist of three board members (two of whom will be the new independent directors), and as of the date of this filing, we have satisfied such requirements. The committee’s responsibilities will include, among other things, to explore, consider, solicit expressions of interest or proposals for, respond to any communications, inquiries or proposals regarding, and advise as to all strategic alternatives to effect a “Specified Liquidity Transaction” (as defined in the Credit Agreement). There can be no guarantee or assurances that any such transaction or transactions be consummated. We must pay (i) a fee of 0.50% of the outstanding principal amount of the commitments under the Credit Agreement March 2023 amendment (as defined in the Credit Agreement) on the closing date (in lieu of the deferred fee previously contemplated in connection with the March 2023 amendment (as defined in the Credit Agreement)) and (ii) a fee of 1.00% of the outstanding principal amount of the commitments under the Credit Agreement as of the closing date on the earlier to occur of September 2, 2024 and an Event of Default (as defined in the Credit Agreement).                        
New Credit Facility [Member]                            
Long-term Debt, Description October 2023 Credit Agreement AmendmentOn October 10, 2023, we amended our existing Credit Agreement to revise certain reporting requirements to the administrative agent and lenders under the Credit Agreement. The amendment introduced a Specified Liquidity Transaction Fee of $3,800 that would become due and payable at the earlier to occur of (1) January 31, 2024, to the extent a Specified Liquidity Transaction (as defined in the Credit Agreement) has not been consummated prior to such date (or such later date that is up to thirty days thereafter to the extent agreed to in writing by the Administrative Agent in its sole discretion) or (b) an Event of Default under the Credit Agreement. During the 26 weeks ended October 28, 2023, we incurred debt issuance costs totaling $1,428 related to the October 2023 Credit Agreement amendment. July 2023 Credit Agreement AmendmentOn July 28, 2023, we amended our existing Credit Agreement to (i) extend the maturity date of the Credit Agreement to December 28, 2024, (ii) reduce advance rates with respect to the borrowing base by 1000 basis points on September 2, 2024 (in lieu of the reductions previously contemplated for September 2023), (iii) subject to the conditions set forth in such amendment, add a CARES Act tax refund claim to the borrowing base, from April 1, 2024 through July 31, 2024, (iv) amend the financial maintenance covenant to require Availability (as defined in the Credit Agreement) at all times greater than the greater of (x) 10% of the Aggregate Loan Cap (as defined in the Credit Agreement) and (y) (A) $32,500 minus, subject to the conditions set forth in such amendment, (B) (a) $7,500 for the period of April 1, 2024 through and including April 30, 2024, (b) $2,500 for the period of May 1, 2024 through and including May 31, 2024 and (c) $0 at all other times, (v) add a minimum Consolidated EBITDA (as defined in the Credit Agreement) financial maintenance covenant, and (vi) amend certain negative and affirmative covenants and add certain additional covenants, all as more particularly set forth in such amendment. The amendment also requires that we appoint a Chief Restructuring Officer and that, by August 11, 2023, we (i) appoint two independent members to the board of directors of the Company from prospective candidates that have been previously disclosed to the Administrative Agent and the Lenders and (ii) appoint a committee of the board of directors of the Company to consist of three board members (two of whom will be the new independent directors). The committee’s responsibilities will include, among other things, to explore, consider, solicit expressions of interest or proposals for, respond to any communications, inquiries or proposals regarding, and advise as to all strategic alternatives to effect a “Specified Liquidity Transaction” (as defined in the Credit Agreement). There can be no guarantee or assurances that any such transaction or transactions be consummated. We must pay (i) a fee of 0.50% of the outstanding principal amount of the commitments under the Credit Agreement March 2023 amendment (as defined in the Credit Agreement) on the closing date (in lieu of the deferred fee previously contemplated in connection with the March 2023 amendment (as defined in the Credit Agreement)) and (ii) a fee of 1.00% of the outstanding principal amount of the commitments under the Credit Agreement as of the closing date on the earlier to occur of September 2, 2024 and an Event of Default (as defined in the Credit Agreement). For additional information related to the Credit Agreement amendment, see the Company's Report on Form 8-K filed with the SEC on July 28, 2023.During the 26 weeks ended October 28, 2023, we incurred debt issuance costs totaling $11,516 related to the July 2023 Credit Agreement amendment. The debt issuance costs have been deferred and are presented as prepaid and other current assets and other noncurrent assets in the condensed consolidated balance sheets, and subsequently amortized ratably over the term of the credit agreement. May 2023 Credit Agreement AmendmentOn May 24, 2023, we amended our existing Credit Agreement to (i) increase the applicable margin with respect to the interest rate under the Credit Agreement to 3.75% per annum, in the case of interest accruing based on SOFR, and 2.75%, in the case of interest accruing based on an alternative base rate, in each case, without regard to a pricing grid, (ii) defer the reduction of advance rates used to calculate our borrowing capacity by an amount equal to 500 basis points previously required on May 31, 2023 to September 1, 2023, (iii) require cash flow reporting and variance testing commencing June 3, 2023 and (iv) defer partial prepayment of the term loan from the DSS segment sale proceeds to September 1, 2023. We did not incur debt issuance costs related to the May 2023 Credit Agreement amendment. For additional information related to the Credit Agreement amendment, see the Company’s Report on Form 8-K dated May 24, 2023 and filed with the SEC on May 31, 2023. March 2023 Credit Agreement AmendmentOn March 8, 2023, we amended our existing Credit Agreement to (i) extend the maturity date of the Credit Agreement by six months to August 29, 2024, (ii) reduce the commitments under the Credit Agreement by $20,000 to $380,000, (iii) increase the applicable margin with respect to the interest rate under the Credit Agreement to 3.375% per annum, in the case of interest accruing based on a Secured Overnight Financing Rate, and 2.375%, in the case of interest accruing based on an alternative base rate, in each case, without regard to a pricing grid, (iv) reduce advance rates with respect to the borrowing base (x) by 500 basis points upon the achievement of certain liquidity events, which may include a sale of equity interests or of assets (a “Specified Event”), or, if such a Specified Event shall not have occurred, on May 31, 2023 (see discussion below) and (y) by an additional 500 basis points on September 29, 2023, (v) amend certain negative covenants and add certain additional covenants, (vi) amend the financial maintenance covenant to require Availability (as defined in the Credit Agreement) to be at all times greater than the greater of 10% of the Aggregate Loan Cap (as defined in the Credit Agreement) and $32,500 and (vii) require repayment of the loans under the Credit Agreement upon a Specified Event. For additional information related to the Credit Agreement amendment, see the Company’s Report on Form 8-K dated March 8, 2023 and filed with the SEC on March 9, 2023. As noted above, the amendment requires the achievement of a Special Event by no later than May 31, 2023 (as such date may be extended pursuant to the terms of the Credit Agreement). See Note 2. Summary of Significant Accounting Policies for information related to the sale of our DSS segment on May 31, 2023. We paid a fee of 0.25% of the outstanding principal amount of the commitments under the Credit Agreement on the amendment closing date and we will pay an additional fee of 1.00% of the outstanding principal amount of the commitments under the Credit Agreement on September 29, 2023.During the 52 weeks ended April 29, 2023, we incurred debt issuance costs totaling $4,081 related to the March 2023 Credit Agreement amendment. The debt issuance costs have been deferred and are presented as prepaid and other current assets and other noncurrent assets in the condensed consolidated balance sheets, and subsequently amortized ratably over the term of the credit agreement.                    
DSS [Member]                            
content amortization costs             $ 1,618       $ 3,169      
v3.23.3
Revenue (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Oct. 28, 2023
Oct. 29, 2022
Oct. 28, 2023
Oct. 29, 2022
Apr. 29, 2023
Apr. 30, 2022
Disaggregation of Revenue [Line Items]            
Revenues $ 610,379 $ 608,633 $ 874,540 $ 863,307    
Rental income 40,681   52,192 52,246    
Product sales and other 569,698 567,299 822,348 811,061    
Deferred Revenue 41,965 43,920 41,965 43,920 $ 15,356 $ 16,475
Deferred Revenue, Current 38,105 39,504 38,105 39,504    
Deferred Revenue, Noncurrent 3,860 4,416 3,860 4,416    
Deferred Revenue, Additions     97,773 96,121    
Contract with Customer, Liability, Revenue Recognized     (71,164) (68,676)    
Deferred Revenue, Additions     97,773 96,121    
Contract with Customer, Liability, Revenue Recognized     (71,164) (68,676)    
Intersegment Eliminations [Member]            
Disaggregation of Revenue [Line Items]            
Revenues (9,930) (11,097) (30,020) (30,013)    
Retail Segment [Member]            
Disaggregation of Revenue [Line Items]            
Revenues 599,336 598,610 844,796 835,117    
Retail Segment [Member] | Transferred at Point in Time            
Disaggregation of Revenue [Line Items]            
Product sales and other 558,655 557,276 792,604 782,871    
Retail Segment [Member] | Transferred over Time            
Disaggregation of Revenue [Line Items]            
Rental income   41,334        
Retail Segment [Member] | Service and Other [Member]            
Disaggregation of Revenue [Line Items]            
Revenues 18,263 18,218 24,996 24,137    
Retail Segment [Member] | Course Materials Product            
Disaggregation of Revenue [Line Items]            
Revenues 435,370 416,410 573,906 547,262    
Retail Segment [Member] | General Merchandise Product            
Disaggregation of Revenue [Line Items]            
Revenues 105,022 122,648 193,702 211,472    
Wholesale [Member]            
Disaggregation of Revenue [Line Items]            
Revenues $ 20,973 $ 21,120 $ 59,764 $ 58,203    
v3.23.3
Segment Reporting Segment Reporting (Details)
$ in Thousands
 3 Months Ended 6 Months Ended
Oct. 28, 2023
USD ($)
Store
Oct. 29, 2022
USD ($)
Oct. 28, 2023
USD ($)
Store
segment
Oct. 29, 2022
USD ($)
Segment Reporting Information [Line Items]        
Number of Reportable Segments | segment     2  
Number of Stores | Store 1,271   1,271  
Revenues $ 610,379 $ 608,633 $ 874,540 $ 863,307
Gross Profit 136,242 138,141 186,876 194,146
Depreciation and amortization expense 10,175 10,256 20,428 21,152
Operating Income (Loss) 35,832 28,671 (5,896) (16,936)
Interest expense, net 10,664 4,886 18,918 8,754
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest 25,168 23,785 (24,814) (25,690)
Selling and administrative expenses 85,961 98,954 163,437 189,295
Restructuring and other charges 4,274 260 8,907 635
Corporate, Non-Segment [Member]        
Segment Reporting Information [Line Items]        
Depreciation and amortization expense 10 17 20 35
Operating Income (Loss) (9,542) (5,352) (18,051) (12,959)
Selling and administrative expenses 5,287 5,075 10,205 12,289
Restructuring and other charges 4,245 260 7,826 635
Intersegment Eliminations [Member]        
Segment Reporting Information [Line Items]        
Revenues (9,930) (11,097) (30,020) (30,013)
Gross Profit 4,623 3,184 (828) (1,703)
Operating Income (Loss) 4,623 3,258 (825) (1,621)
Selling and administrative expenses 0 (74) (3) (82)
Retail Segment [Member]        
Segment Reporting Information [Line Items]        
Revenues 599,336 598,610 844,796 835,117
Gross Profit 125,529 129,502 175,820 183,495
Depreciation and amortization expense 8,911 8,869 17,877 18,398
Operating Income (Loss) 39,407 30,547 11,033 (3,993)
Selling and administrative expenses 77,182 90,086 146,355 169,090
Restructuring and other charges $ 29 0 $ 555 0
Wholesale [Member]        
Segment Reporting Information [Line Items]        
Number of Wholesale Customers | Store     2,900  
Number of System Customers | Store 330   330  
Revenues $ 20,973 21,120 $ 59,764 58,203
Gross Profit 6,090 5,455 11,884 12,354
Depreciation and amortization expense 1,254 1,370 2,531 2,719
Operating Income (Loss) 1,344 218 1,947 1,637
Selling and administrative expenses 3,492 3,867 6,880 7,998
Restructuring and other charges $ 0 $ 0 $ 526 $ 0
Physical Stores [Member]        
Segment Reporting Information [Line Items]        
Number of Stores | Store 717   717  
Virtual Stores [Member]        
Segment Reporting Information [Line Items]        
Number of Stores | Store 554   554  
v3.23.3
Net Earnings (Loss) Per Share - Additional Information (Detail) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 6 Months Ended 12 Months Ended
Oct. 28, 2023
Oct. 29, 2022
Oct. 28, 2023
Oct. 29, 2022
Apr. 29, 2023
Apr. 30, 2022
May 01, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]              
Shares Paid for Tax Withholding for Share Based Compensation 66,852   144,750        
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount 3,149,756 3,153,516 3,453,892 4,898,303      
Earnings Per Share, Basic $ 0.46 $ 0.42 $ (0.50) $ (0.58)      
Earnings Per Share, Diluted $ 0.46 $ 0.42 $ (0.50) $ (0.58)      
Basic 52,791,000 52,438,000 52,716,000 52,305,000      
Average dilutive restricted stock units 74,000 141,000 0 0      
Weighted Average Number of Shares Outstanding, Diluted 52,870,000 53,195,000 52,716,000 52,305,000      
Stock Repurchase Program, Remaining Authorized Repurchase Amount $ 26,669   $ 26,669        
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent 24,854 $ 24,168 (25,117) $ (26,154) $ (90,140) $ (61,559) $ (133,569)
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent (674) (2,024) (1,091) (4,409)      
Net Income (Loss) Available to Common Stockholders, Diluted $ 24,177 $ 22,133 $ (26,208) $ (30,563)      
Income (Loss) from Continuing Operations, Per Diluted Share $ 0.47 $ 0.46 $ (0.48) $ (0.50)      
Income (Loss) from Discontinued Operations and Disposal of Discontinued Operations, Net of Tax, Per Diluted Share (0.01) (0.04) (0.02) (0.08)      
Income (Loss) from Continuing Operations, Per Basic Share 0.47 0.46 (0.48) (0.50)      
Discontinued Operation, Income (Loss) from Discontinued Operation, Net of Tax, Per Basic Share $ (0.01) $ (0.04) $ (0.02) $ (0.08)      
Net Income (Loss) Available to Common Stockholders, Basic $ 24,177 $ 22,133 $ (26,208) $ (30,563)      
Net Income (Loss) from Continuing Operations Available to Common Shareholders, Diluted 24,851 24,157 (25,117) (26,154)      
Net Income (Loss) from Continuing Operations Available to Common Shareholders, Diluted 24,851 24,157 (25,117) (26,154)      
Undistributed Earnings (Loss) Available to Common Shareholders, Basic (3) (11) 0 0      
Undistributed Earnings, Basic 3 11 0 0      
Undistributed Earnings (Loss) Allocated to Participating Securities, Diluted $ (3) $ (11) $ 0 $ 0      
Average dilutive restricted shares 5,000 10,000 0 0      
Average dilutive stock options 0 606,000 0 0      
v3.23.3
Fair Values of Financial Instruments Fair Values of Financial Instruments (Details) - USD ($)
$ in Thousands
Oct. 28, 2023
Oct. 29, 2022
Fair Value Disclosures [Abstract]    
Other Deferred Compensation Arrangements, Liability, Classified, Noncurrent   $ 80
Other Deferred Compensation Arrangements, Liability, Current and Noncurrent   1,398
Other Deferred Compensation Arrangements, Liability, Current   1,318
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Other Deferred Compensation Arrangements, Liability, Current   1,318
Other Deferred Compensation Arrangements, Liability, Classified, Noncurrent   80
Other Deferred Compensation Arrangements, Liability, Current and Noncurrent   $ 1,398
Phantom Share Units (PSUs)    
Fair Value Disclosures [Abstract]    
Other Deferred Compensation Arrangements, Liability, Current and Noncurrent $ 32  
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Other Deferred Compensation Arrangements, Liability, Current and Noncurrent $ 32  
v3.23.3
Debt - Additional Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Oct. 10, 2023
Jul. 28, 2023
May 24, 2023
Mar. 08, 2023
Oct. 28, 2023
Oct. 29, 2022
Oct. 28, 2023
Oct. 29, 2022
Apr. 29, 2023
Jul. 31, 2022
Jun. 07, 2022
Line of Credit Facility [Line Items]                      
Line Of Credit Potential Increase Amount         $ 100,000   $ 100,000        
Proceeds from Lines of Credit             284,698 $ 348,200      
Repayments of Lines of Credit             233,970        
Short-term Debt         0 $ 0 0 0 $ 40,000    
Letters of Credit Outstanding, Amount         575 4,759 575 4,759      
Debt, Long-term and Short-term, Combined Amount         233,873 250,445 233,873 250,445      
Long-Term Debt         233,873 250,445 233,873 250,445 $ 182,151    
Proceeds from (Repayments of) Secured Debt             233,970 321,900      
Long-term Line of Credit, Noncurrent         204,881   204,881        
Total Debt excluding Deferred Financing Costs         235,744 252,000 235,744 252,000      
Interest Paid, Excluding Capitalized Interest, Operating Activities             13,972 7,301      
Paid-in-Kind Interest             863 0      
Interest expense, net         10,664 4,886 $ 18,918 8,754      
Term Loan                      
Line of Credit Facility [Line Items]                      
Long-Term Debt, Description   July 2023 Term Loan Credit Agreement AmendmentOn July 28, 2023, we amended our Term Loan to (i) extend the maturity date of the Term Loan Agreement to April 7, 2025, (ii) allow for interest to be paid in kind until September 2, 2024, (iii) amend the 1.50% anniversary fee to recur on June 7 of each year that the Term Loan Agreement remains outstanding, with 2024 fee deferred to the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement) and (iv) amend certain negative covenants and affirmative and add certain additional covenants. We must pay a fee of $50 to the lenders under the Term Loan Agreement on the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement). For additional information, see the Company's Report on Form 8-K filed with the SEC on July 28, 2023.During the 26 weeks ended October 28, 2023, we incurred debt issuance costs totaling $480 related to the July 2023 Term Loan Credit Agreement amendment. The debt issuance costs have been deferred and are presented as a reduction to long-term borrowings in the condensed consolidated balance sheets, and subsequently amortized ratably over the term of the Term Loan Facility.   March 2023 Term Loan Credit Agreement AmendmentOn March 8, 2023, we amended the Term Loan Credit Agreement to (i) extend the maturity date of the Term Loan Credit Agreement by six months to December 7, 2024, (ii) permit the application of certain proceeds to the repayment of the loans under Credit Agreement and (iii) amend certain negative covenants and add certain additional covenants to conform to the Credit Agreement. In addition, the amendment requires the achievement of a Specified Event (as described above) by no later than May 31, 2023 (as such date may be extended under the Credit Agreement, but no later than August 31, 2023 without consent from lenders under the Term Loan Credit Agreement). For additional information, see the Company's Report on Form 8-K dated March 8, 2023 and filed with the SEC on March 9, 2023.During the 52 weeks ended April 29, 2023, we incurred debt issuance costs totaling $431 related to the March 2023 Term Loan Credit Agreement amendment. We paid a fee of $50 on the amendment closing date to the lenders under the Term Loan Credit Agreement. The debt issuance costs have been deferred and are presented as prepaid and other current assets and other noncurrent assets in the condensed consolidated balance sheets, and subsequently amortized ratably over the term of the credit agreement.     The Term Loans accrue interest at a rate equal to 11.25%, payable quarterly. All interest on the Term Loan prior to the July 29, 2023 was paid in cash. During the 13 weeks ended October 28, 2023, all interest on the Term Loan was incurred in kind as permitted under the July 2023 Term Loan Amendment. The Term Loans do not amortize prior to maturity. The Term Loan Credit Agreement does not contain a financial covenant, but otherwise contains representations and warranties, covenants and events of default that are substantially the same as those in the Credit Agreement, including restrictions on the ability of the Company and its subsidiaries to incur additional debt, incur or permit liens on assets, make investments and acquisitions, consolidate or merge with any other company, engage in asset sales and make dividends and distributions. The Term Loan Facility is secured by second-priority liens on all assets securing the obligations under the Credit Agreement, which is all of the assets of the Company and the Guarantors, subject to customary exclusions and limitations set forth in the Term Loan Credit Agreement and the other loan documents executed in connection therewith.The Credit Agreement amendment permitted us to incur the Term Loan Facility and also provides that, upon repayment of the Term Loan Credit Agreement (and, if applicable, any replacement credit facility thereof), we may incur second lien secured debt in an aggregate principal amount not to exceed $75,000.        
Long-Term Debt         30,863   $ 30,863       $ 30,000
Repayments of Long-Term Debt             0 0      
Proceeds from Issuance of Debt               30,000      
Paid-in-Kind Interest             863        
Revolving Credit Facility [Member]                      
Line of Credit Facility [Line Items]                      
Line of Credit Facility, Maximum Borrowing Capacity         500,000   $ 500,000        
New Credit Facility [Member]                      
Line of Credit Facility [Line Items]                      
Credit Facility Maturity Term             5 years        
Line of Credit Facility, Maximum Borrowing Capacity         400,000   $ 400,000        
Debt, Long-term and Short-term, Combined Amount           222,000   222,000      
Long-Term Debt, Description October 2023 Credit Agreement AmendmentOn October 10, 2023, we amended our existing Credit Agreement to revise certain reporting requirements to the administrative agent and lenders under the Credit Agreement. The amendment introduced a Specified Liquidity Transaction Fee of $3,800 that would become due and payable at the earlier to occur of (1) January 31, 2024, to the extent a Specified Liquidity Transaction (as defined in the Credit Agreement) has not been consummated prior to such date (or such later date that is up to thirty days thereafter to the extent agreed to in writing by the Administrative Agent in its sole discretion) or (b) an Event of Default under the Credit Agreement. During the 26 weeks ended October 28, 2023, we incurred debt issuance costs totaling $1,428 related to the October 2023 Credit Agreement amendment. July 2023 Credit Agreement AmendmentOn July 28, 2023, we amended our existing Credit Agreement to (i) extend the maturity date of the Credit Agreement to December 28, 2024, (ii) reduce advance rates with respect to the borrowing base by 1000 basis points on September 2, 2024 (in lieu of the reductions previously contemplated for September 2023), (iii) subject to the conditions set forth in such amendment, add a CARES Act tax refund claim to the borrowing base, from April 1, 2024 through July 31, 2024, (iv) amend the financial maintenance covenant to require Availability (as defined in the Credit Agreement) at all times greater than the greater of (x) 10% of the Aggregate Loan Cap (as defined in the Credit Agreement) and (y) (A) $32,500 minus, subject to the conditions set forth in such amendment, (B) (a) $7,500 for the period of April 1, 2024 through and including April 30, 2024, (b) $2,500 for the period of May 1, 2024 through and including May 31, 2024 and (c) $0 at all other times, (v) add a minimum Consolidated EBITDA (as defined in the Credit Agreement) financial maintenance covenant, and (vi) amend certain negative and affirmative covenants and add certain additional covenants, all as more particularly set forth in such amendment. The amendment also requires that we appoint a Chief Restructuring Officer and that, by August 11, 2023, we (i) appoint two independent members to the board of directors of the Company from prospective candidates that have been previously disclosed to the Administrative Agent and the Lenders and (ii) appoint a committee of the board of directors of the Company to consist of three board members (two of whom will be the new independent directors). The committee’s responsibilities will include, among other things, to explore, consider, solicit expressions of interest or proposals for, respond to any communications, inquiries or proposals regarding, and advise as to all strategic alternatives to effect a “Specified Liquidity Transaction” (as defined in the Credit Agreement). There can be no guarantee or assurances that any such transaction or transactions be consummated. We must pay (i) a fee of 0.50% of the outstanding principal amount of the commitments under the Credit Agreement March 2023 amendment (as defined in the Credit Agreement) on the closing date (in lieu of the deferred fee previously contemplated in connection with the March 2023 amendment (as defined in the Credit Agreement)) and (ii) a fee of 1.00% of the outstanding principal amount of the commitments under the Credit Agreement as of the closing date on the earlier to occur of September 2, 2024 and an Event of Default (as defined in the Credit Agreement). For additional information related to the Credit Agreement amendment, see the Company's Report on Form 8-K filed with the SEC on July 28, 2023.During the 26 weeks ended October 28, 2023, we incurred debt issuance costs totaling $11,516 related to the July 2023 Credit Agreement amendment. The debt issuance costs have been deferred and are presented as prepaid and other current assets and other noncurrent assets in the condensed consolidated balance sheets, and subsequently amortized ratably over the term of the credit agreement. May 2023 Credit Agreement AmendmentOn May 24, 2023, we amended our existing Credit Agreement to (i) increase the applicable margin with respect to the interest rate under the Credit Agreement to 3.75% per annum, in the case of interest accruing based on SOFR, and 2.75%, in the case of interest accruing based on an alternative base rate, in each case, without regard to a pricing grid, (ii) defer the reduction of advance rates used to calculate our borrowing capacity by an amount equal to 500 basis points previously required on May 31, 2023 to September 1, 2023, (iii) require cash flow reporting and variance testing commencing June 3, 2023 and (iv) defer partial prepayment of the term loan from the DSS segment sale proceeds to September 1, 2023. We did not incur debt issuance costs related to the May 2023 Credit Agreement amendment. For additional information related to the Credit Agreement amendment, see the Company’s Report on Form 8-K dated May 24, 2023 and filed with the SEC on May 31, 2023. March 2023 Credit Agreement AmendmentOn March 8, 2023, we amended our existing Credit Agreement to (i) extend the maturity date of the Credit Agreement by six months to August 29, 2024, (ii) reduce the commitments under the Credit Agreement by $20,000 to $380,000, (iii) increase the applicable margin with respect to the interest rate under the Credit Agreement to 3.375% per annum, in the case of interest accruing based on a Secured Overnight Financing Rate, and 2.375%, in the case of interest accruing based on an alternative base rate, in each case, without regard to a pricing grid, (iv) reduce advance rates with respect to the borrowing base (x) by 500 basis points upon the achievement of certain liquidity events, which may include a sale of equity interests or of assets (a “Specified Event”), or, if such a Specified Event shall not have occurred, on May 31, 2023 (see discussion below) and (y) by an additional 500 basis points on September 29, 2023, (v) amend certain negative covenants and add certain additional covenants, (vi) amend the financial maintenance covenant to require Availability (as defined in the Credit Agreement) to be at all times greater than the greater of 10% of the Aggregate Loan Cap (as defined in the Credit Agreement) and $32,500 and (vii) require repayment of the loans under the Credit Agreement upon a Specified Event. For additional information related to the Credit Agreement amendment, see the Company’s Report on Form 8-K dated March 8, 2023 and filed with the SEC on March 9, 2023. As noted above, the amendment requires the achievement of a Special Event by no later than May 31, 2023 (as such date may be extended pursuant to the terms of the Credit Agreement). See Note 2. Summary of Significant Accounting Policies for information related to the sale of our DSS segment on May 31, 2023. We paid a fee of 0.25% of the outstanding principal amount of the commitments under the Credit Agreement on the amendment closing date and we will pay an additional fee of 1.00% of the outstanding principal amount of the commitments under the Credit Agreement on September 29, 2023.During the 52 weeks ended April 29, 2023, we incurred debt issuance costs totaling $4,081 related to the March 2023 Credit Agreement amendment. The debt issuance costs have been deferred and are presented as prepaid and other current assets and other noncurrent assets in the condensed consolidated balance sheets, and subsequently amortized ratably over the term of the credit agreement.              
Long-term Line of Credit, Noncurrent         204,881 222,000 204,881 222,000      
FILO [Member]                      
Line of Credit Facility [Line Items]                      
Line of Credit Facility, Maximum Borrowing Capacity         100,000   100,000     $ 0  
Term Loan                      
Line of Credit Facility [Line Items]                      
Debt Issuance Costs, Net         (1,871) (1,555) (1,871) (1,555)      
Long-term Line of Credit, Noncurrent         $ 30,863 $ 30,000 $ 30,863 $ 30,000      
v3.23.3
Leases Leases (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Oct. 28, 2023
Oct. 29, 2022
Oct. 28, 2023
Oct. 29, 2022
Leases [Abstract]        
Operating Lease, Weighted Average Remaining Lease Term 4 years 7 months 6 days 5 years 3 months 18 days 4 years 7 months 6 days 5 years 3 months 18 days
Variable Lease, Cost $ 25,436 $ 25,281 $ 37,665 $ 40,465
Lease, Cost 46,902 52,998 69,291 75,860
Operating Lease, Expense 72,338 $ 78,279 106,956 $ 116,325
Lessee, Operating Lease, Liability, Payments, Due Year Two 57,282   57,282  
Lessee, Operating Lease, Liability, Payments, Due Year Three 39,180   39,180  
Lessee, Operating Lease, Liability, Payments, Due Year Four 31,414   31,414  
Lessee, Operating Lease, Liability, Payments, Due Year Five 24,944   24,944  
Lessee, Operating Lease, Liability, Payments, Due after Year Five 59,293   59,293  
Lessee, Operating Lease, Liability, Payments, Due 318,147   318,147  
Lessee, Operating Lease, Liability, Undiscounted Excess Amount 31,536   31,536  
Operating Lease, Liability $ 286,611   $ 286,611  
Operating Lease, Weighted Average Discount Rate, Percent 4.30% 4.40% 4.30% 4.40%
Operating Lease, Payments     $ 68,580 $ 75,876
ROU Asst Obtained in Exchange for Lease Liabilites     69,959 $ 86,045
Lessee, Operating Lease, Liability, to be Paid, Year One $ 106,034   $ 106,034  
v3.23.3
Supplementary Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Oct. 28, 2023
Oct. 29, 2022
Oct. 28, 2023
Oct. 29, 2022
Restructuring and other charges $ 4,274 $ 260 $ 8,907 $ 635
Employee Severance [Member]        
Restructuring and other charges 29   1,080  
Other Restructuring [Member]        
Restructuring and other charges 4,245   7,827  
Employee Severance [Member]        
Accrued Salaries $ 2,311   $ 2,311  
v3.23.3
Stock-Based Compensation Stock-Based Compensation (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Oct. 28, 2023
Oct. 29, 2022
Oct. 28, 2023
Oct. 29, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Share-based Compensation     $ 1,756 $ 3,066
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount $ 4,001   $ 4,001  
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition     1 year 6 months  
Selling, General and Administrative Expenses [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Share-based Compensation 798 $ 1,490 $ 1,756 3,066
us-gaap_LongTermIncentivePlanCompensation [Line Items] 758 1,541 1,627 3,305
Selling, General and Administrative Expenses [Member] | Restricted Stock [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Share-based Compensation 4 64 11 158
Selling, General and Administrative Expenses [Member] | Restricted Stock Units (RSUs) [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Share-based Compensation 448 820 1,016 1,686
Selling, General and Administrative Expenses [Member] | Performance Share Units (PSUs) [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Share-based Compensation 0 0 0 10
Selling, General and Administrative Expenses [Member] | Equity Option        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Share-based Compensation 346 606 729 1,212
Selling, General and Administrative Expenses [Member] | Phantom Share Units (PSUs)        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Deferred Compensation Arrangement with Individual, Compensation Expense $ (40) $ 51 $ (129) $ 239
v3.23.3
Income Taxes Income Taxes (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Oct. 28, 2023
Oct. 29, 2022
Oct. 28, 2023
Oct. 29, 2022
Income Tax Disclosure [Abstract]        
Income Tax Expense (Benefit) $ 314 $ (383) $ 303 $ 464
Effective Income Tax Rate Reconciliation, Percent 1.20% (1.60%) (1.20%) (1.80%)
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest $ 25,168 $ 23,785 $ (24,814) $ (25,690)
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