Equity and Earnings Per Share (Notes)

12 Months Ended

Apr. 27, 2024

Equity and Earnings Per Share [Text Block]

Note 5. Equity and Earnings Per Share

Equity

As of April 27, 2024, our authorized capital stock consists of 200,000,000 shares of common stock, par value $0.01 per share, and 5,000,000 shares of preferred stock, par value $0.01 per share. As of April 27, 2024, 55,840,166 shares and 53,156,369 shares of our common stock were issued and outstanding, respectively, and 0 shares of our preferred stock were both issued and outstanding. Our common stock trades on the New York Stock Exchange (“NYSE”) under the symbol “BNED”.

On October 5, 2023, our shareholders approved an amendment and restatement of the Equity Incentive Plan to increase the number of shares available for issuance by an additional 4,500,000 of our Common Stock. We have reserved an aggregate of 17,909,345 shares of common stock for future grants in accordance with the Barnes & Noble Education Inc. Equity Incentive Plan. See Item 8. Financial Statements and Supplementary Data - Note 12. Long-Term Incentive Compensation Expense.

On June 5, 2024, our shareholders approved an amendment to our Amended and Restated Certificate of Incorporation, as amended, to increase the aggregate number of authorized shares of Common Stock from 200,000,000 shares to 10,000,000,000 shares.

On June 11, 2024, we completed a reverse stock split of the Company’s outstanding shares of common stock at a ratio of 1-for-100 (the “Reverse Stock Split”), which was previously approved by stockholders at a special meeting held on June 5, 2024. In connection with the Reverse Stock Split, every 100 shares of the common stock issued and outstanding was converted into one share of the Company’s common stock. The Reverse Stock Split reduced the number of shares of the Company’s outstanding common stock from approximately 2,620,495,552 shares (as of June 11, 2024) to approximately 26,204,956 shares, subject to adjustment for rounding. For additional information, see Part II - Item 8. Financial Statements and Supplementary Data - Note 17. Subsequent Events.

The holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders. Holders of shares of our common stock do not have cumulative voting rights in the election of directors. The holders of our common stock will be entitled to share ratably in our assets legally available for distribution to our stockholders, subject to the prior distribution rights of preferred stock, if any, then outstanding. The holders of our common stock do not have preemptive rights or preferential rights to subscribe for shares of our capital stock.

Repurchase of Shares

On December 14, 2015, our Board of Directors authorized a stock repurchase program of up to $50,000, in the aggregate, of our outstanding common stock. The stock repurchase program is carried out at the direction of management (which may include a plan under Rule 10b5-1 of the Securities Exchange Act of 1934). The stock repurchase program may be suspended, terminated, or modified at any time. Any repurchased shares will be held as treasury stock and will be available for general corporate purposes. During Fiscal 2024 and Fiscal 2023, we did not purchase shares under the stock repurchase program. As of April 27, 2024, approximately $26,669 remains available under the stock repurchase program.

During Fiscal 2024 and Fiscal 2023, we also repurchased 147,885 shares and 347,808 shares of our common stock in connection with employee tax withholding obligations for vested stock awards, respectively.

Sale of Treasury Shares

In December 2020 (Fiscal 2021), we entered into a merchandising agreement with Fanatics and Lids which included a strategic equity investment in the Company. Fanatics, Inc. and Lids Holdings, Inc,. jointly as TopLids LendCo, LLC (“TopLids”), purchased an aggregate 2,307,692 of our common shares (issued from treasury shares) for $15,000, representing a share price of $6.50 per share. The premium price paid above the fair market value of our common stock at closing was

approximately $4,131 and was recorded as a contract liability which is recognized over the term of the merchandising contracts for Fanatics and Lids ($211 and $211, respectively, in accrued liabilities, and $3,287 and $3,498, respectively, as of April 27, 2024 and April 29, 2023, in other long-term liabilities our consolidated balance sheet) which is expected to be recognized over the term of the merchandising contracts for Fanatics and Lids, as discussed in Part II - Item 8. Financial Statements and Supplementary Data - Note 1. Organization - Relationship with Fanatics and Lids. For information related to additional equity investments by TopLids subsequent to the end of Fiscal 2024, see Part II - Item 8. Financial Statements and Supplementary Data - Note 10. Related Party Transactions and Note 17 Subsequent Events.

Dividends

We paid no other dividends to common stockholders during Fiscal 2024 and Fiscal 2023. We do not intend to pay dividends on our common stock in the foreseeable future and dividend payments are not permitted under current or future financing arrangements. See Part II - Item 8. Financial Statements and Supplementary Data - Note 7 - Debt and Note 17. Subsequent Event for details.

On April 16, 2024, our Board of Directors approved the adoption of a short-term stockholder rights plan and declared a dividend distribution of one preferred share purchase right on each outstanding share of the Company's common stock. Each right will entitle stockholders to buy one one-thousandth of a share of our preferred stock at an established exercise price. The dividend was payable to holders of record as of the close of business on April 29, 2024. The rights will be exercisable only if a person or group acquires 10% or more of our outstanding common stock and various other criteria are met (the “Distribution Date”). Until the Distribution Date, the rights will not be exercisable; the rights will not be evidenced by separate rights certificates; and the rights will be transferable by, and only in connection with, the transfer of common stock. The rights will expire no later than January 31, 2025.

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 Fiscal 2024 and Fiscal 2023, average shares of 32,304 and 47,404, respectively, were excluded from the diluted earnings per share calculation using the two-class method as their inclusion would have been antidilutive.

On June 10, 2024, subsequent to the end of Fiscal 2024, we completed various transactions, including an equity rights offering, private equity investment, Term Loan debt conversion, and Credit Facility refinancing, to substantially deleverage our consolidated balance sheet. For additional information, see Part II - Item 8. Financial Statements and Supplementary Data - Note 17. Subsequent Events. Because the rights issuance was offered to all existing stockholders at an exercise price that was less than the fair value of our Common Stock, as of such time, the weighted average shares outstanding and basic and diluted earnings (loss) per share were adjusted retroactively to reflect the bonus element of the rights offering for all periods presented by a factor of 5.03.

On June 11, 2024, we completed a reverse stock split of the Company’s outstanding shares of common stock at a ratio of 1-for-100 (the “Reverse Stock Split”), which was approved by stockholders at a special meeting held on June 5, 2024. In connection with the Reverse Stock Split, every 100 shares of the common stock issued and outstanding was converted into one share of the Company’s common stock. For additional information, see Part II - Item 8. Financial Statements and Supplementary Data - Note 17. Subsequent Events.

Weighted average shares for both basic and diluted, prior to giving effect to the bonus element of the rights offering and the Reverse Stock Split was 52,935,533 for the 52 weeks ended April 27, 2024. The weighted average common shares and loss per common share reflect the bonus element resulting from the equity rights offering and the Reverse Stock Split for all periods presented on the consolidated statements of operations.

The following is a reconciliation of the basic and diluted earnings per share calculation:


	52 weeks ended
(shares in thousands)	April 27, 2024		April 29, 2023
Numerator for basic and diluted earnings per share:


Loss from continuing operations, net of tax	$	(62,481)	$	(90,140)
Loss from discontinued operations, net of tax	(730)		(11,722)
Net loss available to common shareholders	$	(63,211)	$	(101,862)







Denominator for basic and diluted earnings per share:
Basic and diluted weighted average shares of Common Stock	2,662		2,638
Loss per share of Common Stock:
Basic and Diluted
Continuing operations	$	(23.47)	$	(34.17)
Discontinued operations	(0.28)		(4.44)
Basic and diluted loss per share of Common Stock	$	(23.75)	$	(38.61)