-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AkhKZYTxy+3NneAqegtM7bmM8UmaacinnRyZlpns2lLYeFaWPo0ZBQ/Ai1v7UvsH x/EsFDJxnwQ42o3VQGzeYg== 0001157523-05-010273.txt : 20051117 0001157523-05-010273.hdr.sgml : 20051117 20051117102539 ACCESSION NUMBER: 0001157523-05-010273 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20051117 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051117 DATE AS OF CHANGE: 20051117 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BARNES & NOBLE INC CENTRAL INDEX KEY: 0000890491 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-MISCELLANEOUS SHOPPING GOODS STORES [5940] IRS NUMBER: 061196501 STATE OF INCORPORATION: DE FISCAL YEAR END: 0130 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12302 FILM NUMBER: 051211519 BUSINESS ADDRESS: STREET 1: 122 FIFTH AVE CITY: NEW YORK STATE: NY ZIP: 10011 BUSINESS PHONE: 2126333300 MAIL ADDRESS: STREET 1: 122 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10011 8-K 1 a5023403.txt BARNES & NOBLE, INC. 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported) November 17, 2005 -------------------------------- BARNES & NOBLE, INC. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Its Charter) Delaware - -------------------------------------------------------------------------------- (State or Other Jurisdiction of Incorporation) 1-12302 06-1196501 - -------------------------------------------------------------------------------- (Commission File Number) (IRS Employer Identification No.) 122 Fifth Avenue, New York, NY 10011 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (212) 633-3300 - -------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02 Results of Operations and Financial Condition On November 17, 2005, Barnes & Noble, Inc. (the "Company") issued a press release announcing its results for the third quarter ended October 29, 2005. A copy of this press release is attached hereto as Exhibit 99.1. The information in this Form 8-K and the Exhibit attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing. Use of Non-GAAP Financial Information To supplement the Company's consolidated financial statements presented in accordance with generally accepted accounting principles ("GAAP") in the press release attached hereto as Exhibit 99.1, the Company provides certain financial results which exclude certain charges. The Company's management reviews these non-GAAP financial measures internally to evaluate the Company's performance and manage its operations. Additionally, the Company believes that such information also provides investors a better understanding of the Company's current operating results and provides comparable measures to help investors understand the Company's future operating results. The non-GAAP measures included in the press release attached hereto as Exhibit 99.1 have been reconciled to the comparable GAAP measures as required under SEC rules regarding the use of non-GAAP financial measures. In fiscal 2005, the charge was for the write off of unamortized deferred financing fees resulting from the replacement of the Company's $400 million credit facility with a new $850 million credit facility, and the pre-payment and cancellation of the Company's $245 million term loan. In fiscal 2004, the charge was for the write-off of the unamortized portion of the deferred financing fees from the issuance of the Company's convertible subordinated notes and for payment of the redemption premium. The Company urges investors to carefully review the GAAP financial information included as part of the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and quarterly earnings releases. Item 9.01 Financial Statements and Exhibits (c) Exhibits 99.1 Press Release of Barnes & Noble, Inc., dated November 17, 2005 SIGNATURE --------- 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 hereunto duly authorized. BARNES & NOBLE, INC. (Registrant) By: /s/Joseph J. Lombardi --------------------- Joseph J. Lombardi Chief Financial Officer Date: November 17, 2005 Barnes & Noble, Inc. EXHIBIT INDEX Exhibit Number Description - -------------- ----------- 99.1 Press Release of Barnes & Noble, Inc., dated November 17, 2005 EX-99.1 2 a5023403ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Barnes & Noble Reports Third Quarter Results: Exceeds Earnings Per Share Guidance; Increases Full Year Guidance NEW YORK--(BUSINESS WIRE)--Nov. 17, 2005--Barnes & Noble, Inc. (NYSE: BKS), the world's largest bookseller, today reported sales and earnings for the third quarter ended October 29, 2005. Sales for the third quarter were $1,081.8 million, an increase of 4% from $1,042.3 million a year ago. Sales at Barnes & Noble stores were $930.5 million, increasing 4% over the prior year. Comparable store sales at Barnes & Noble were 1.5% for the quarter, in line with company guidance for a low-single digit increase. The company estimates comparable store sales were negatively impacted by 0.5% due to the effects from the hurricanes. Sales at B. Dalton stores were $28.4 million, a 21% decrease over the prior year, due primarily to store closings. Comparable store sales at B. Dalton stores declined 1.6%. Sales at Barnes & Noble.com increased 8% over the prior year to $99.4 million. Net earnings for the third quarter were $0.00 per share and exceeded guidance of ($0.01) to ($0.04) per share. Third quarter results included costs of $2 million, or $0.03 per share, associated with the previously announced redundancy costs for the new distribution center. Excluding these costs, net earnings improved $0.03 per share as compared to results from continuing operations a year ago. "Third quarter sales met expectations, benefiting from a strong hardcover release schedule in October," said Steve Riggio, chief executive officer of Barnes & Noble, Inc. "If our sales trend continues, we are optimistic that the company will be able to deliver its fourth quarter results as planned." During the third quarter, the company paid its first ever cash dividend of $0.15 per share, for a total of approximately $10.3 million. The company acquired approximately 2.8 million shares for $105 million and approximately 7.3 million shares for $269 million under its share repurchase programs in the third quarter and year-to-date, respectively. GUIDANCE For the fourth quarter, the company expects comparable store sales at Barnes & Noble stores to be in the low-single digits. For the full year, the company expects comparable store sales to increase between 2% and 3%. In the fourth quarter, the company expects earnings per share of $1.72 to $1.76, a 13% to 16% increase as compared to earnings per share from continuing operations of $1.52 in the prior year. Guidance for the fourth quarter includes redundancy costs of approximately $2 million, or $0.03 per share, associated with the new distribution center, and further costs are expected to continue through 2006 as the transition program is completed. For the full year, the company is increasing its earnings per share guidance to a range of $1.99 to $2.03, up $0.05 per share from previous guidance of $1.94 to $1.98. This increase in guidance reflects year-to-date net earnings exceeding guidance by approximately $1 million, as well as earnings per share accretion resulting from the reduced share count associated with the company's share repurchase activity. The revised 2005 guidance reflects a 12% to 15% increase in earnings per share from continuing operations from $1.79 in 2004, excluding debt redemption fees of $0.11 and $0.02 per share in 2004 and 2005, respectively. The company's full year guidance includes the previously announced charges of $0.02 for the write-off of deferred financing fees resulting from the replacement of the company's credit facility and the elimination of the term loan, and $0.06 in legal settlement costs, both of which occurred in the second quarter. In addition, the full year guidance also includes $0.08 of previously announced redundancy costs in association with our new distribution center. The fully diluted weighted average share count used in the computation of earnings per share for each of the periods in 2005 are as follows: Fully diluted weighted average shares ------------------------- First quarter (actual) 74,400,000 Second quarter (actual) 73,087,000 Third quarter (actual) 71,257,000 Fourth quarter (forecast) 69,600,000 ------------------------- Full year (forecast) 72,100,000 ========================= As of October 29, 2005, the company operated 683 Barnes & Noble stores and 141 B. Dalton stores. During the third quarter, 13 Barnes & Noble stores were opened and three were closed. Five B. Dalton stores were closed during the quarter. A conference call with Barnes & Noble, Inc.'s senior management will be webcast beginning at 11:00 A.M. ET on Thursday, November 17, 2005, and is accessible at www.barnesandnobleinc.com/webcasts. The call will also be archived at www.earnings.com for one year. Barnes & Noble, Inc. will report holiday sales on or about January 5, 2006. ABOUT BARNES & NOBLE, INC. Barnes & Noble, Inc. (NYSE: BKS), the world's largest bookseller and a Fortune 500 company, operates 824 bookstores in 50 states. For the fourth year in a row, the company is the nation's top retail brand for quality, according to the EquiTrend(R) Brand Study by Harris Interactive(R). Barnes & Noble conducts its online business through Barnes & Noble.com (www.bn.com), one of the Web's largest e-commerce sites and the number one online bookseller for quality among e-commerce companies, according to the latest EquiTrend survey. General information on Barnes & Noble, Inc. can be obtained via the Internet by visiting the company's corporate Web site: http://www.barnesandnobleinc.com. SAFE HARBOR This press release contains "forward-looking statements." Barnes & Noble is including this statement for the express purpose of availing itself of the protections of the safe harbor provided by the Private Securities Litigation Reform Act of 1995 with respect to all such forward-looking statements. These forward-looking statements are based on currently available information and represent the beliefs of the management of the company. These statements are subject to risks and uncertainties that could cause actual results to differ materially. These risks include, but are not limited to, general economic and market conditions, decreased consumer demand for the company's products, possible disruptions in the company's computer or telephone systems, possible work stoppages or increases in labor costs, possible increases in shipping rates or interruptions in shipping service, effects of competition, possible disruptions or delays in the opening of new stores or the inability to obtain suitable sites for new stores, higher than anticipated store closing or relocation costs, higher interest rates, the performance of the company's online and other initiatives, the successful integration of acquired businesses, the successful and timely completion and integration of the company's new New Jersey distribution center, unanticipated increases in merchandise or occupancy costs, unanticipated adverse litigation results or effects, product shortages, and other factors which may be outside of the company's control. Please refer to the company's annual, quarterly and periodic reports on file with the SEC for a more detailed discussion of these and other risks that could cause results to differ materially. BARNES & NOBLE, INC. AND SUBSIDIARIES Consolidated Statements of Operations (In thousands, except per share data) - ---------------------------------------------------------------------- 13 weeks ended 39 weeks ended ------------------------- ------------------------ October 30, October 30, October 29, 2004 October 29, 2004 2005 Restated(a) 2005 Restated(a) ------------ ------------ ----------- ----------- Sales $1,081,785 1,042,277 3,349,755 3,200,823 Cost of sales and occupancy 761,367 733,523 2,357,587 2,259,656 ------------ ----------- ----------- ----------- Gross profit 320,418 308,754 992,168 941,167 ------------ ----------- ----------- ----------- Selling and administrative expenses 272,721 259,661 815,251 756,715 Depreciation and amortization 43,892 46,215 130,401 136,952 Pre-opening expenses 4,161 2,099 9,270 6,994 ------------ ----------- ----------- ----------- Operating profit (loss) (356) 779 37,246 40,506 Interest expense, net (917) (2,155) (1,911) (10,358) Debt redemption charge - - - (14,582) ------------ ----------- ----------- ----------- Income (loss) before taxes and minority interest (1,273) (1,376) 35,335 15,566 Income taxes (519) (561) 14,399 6,334 ------------ ----------- ----------- ----------- Income (loss) before minority interest (754) (815) 20,936 9,232 Minority interest 1,081 812 2,764 1,846 ------------ ----------- ----------- ----------- Income (loss) from continuing operations 327 (3) 23,700 11,078 Income from discontinued operations (net of income tax) - 7,572 - 16,670 ------------ ----------- ----------- ----------- Net income $ 327 7,569 23,700 27,748 ============ =========== =========== =========== Basic income per common share: Income from continuing operations $ - - 0.35 0.16 Income from discontinued operations - 0.11 - 0.24 ------------ ----------- ----------- ----------- Net income $ - 0.11 0.35 0.40 ============ =========== =========== =========== Diluted income per common share: Income from continuing operations $ - - 0.33 0.16 Income from discontinued operations - 0.10 - 0.22 ------------ ----------- ----------- ----------- Net income $ - 0.10 0.33 0.38 ============ =========== =========== =========== Weighted average common shares outstanding Basic 66,819 69,443 68,288 68,727 Diluted 71,257 72,049 72,915 71,273 Percentage of sales: Sales 100.0% 100.0% 100.0% 100.0% Cost of sales and occupancy 70.4% 70.4% 70.4% 70.6% ------------ ----------- ----------- ----------- Gross profit 29.6% 29.6% 29.6% 29.4% ------------ ----------- ----------- ----------- Selling and administrative expenses 25.2% 24.9% 24.3% 23.6% Depreciation and amortization 4.1% 4.4% 3.9% 4.3% Pre-opening expenses 0.4% 0.2% 0.3% 0.2% ------------ ----------- ----------- ----------- Operating profit 0.0% 0.1% 1.1% 1.3% Interest expense, net -0.1% -0.2% -0.1% -0.3% Debt redemption charge 0.0% 0.0% 0.0% -0.5% ------------ ----------- ----------- ----------- Income (loss) before taxes and minority interest -0.1% -0.1% 1.1% 0.5% Income taxes 0.0% -0.1% 0.4% 0.2% ------------ ----------- ----------- ----------- Income (loss) before minority interest -0.1% -0.1% 0.6% 0.3% Minority interest 0.1% 0.1% 0.1% 0.1% ------------ ----------- ----------- ----------- Income from continuing operations 0.0% 0.0% 0.7% 0.3% ============ =========== =========== =========== (a) Restated to reflect certain adjustments relating to lease accounting. BARNES & NOBLE, INC. AND SUBSIDIARIES Consolidated Balance Sheets (In thousands, except per share data) - ---------------------------------------------------------------------- October 30, October 29, 2004 January 29, 2005 Restated(a) 2005 ----------- ------------ ----------- ASSETS Current assets: Cash and cash equivalents $ 23,038 89,309 535,652 Receivables, net 115,823 134,471 91,501 Merchandise inventories 1,563,502 1,518,140 1,274,578 Prepaid expenses and other current assets 126,714 81,517 85,140 Current assets of discontinued operations - 360,235 - ----------- ----------- ----------- Total current assets 1,829,077 2,183,672 1,986,871 Property and equipment: Land and land improvements 3,247 3,247 3,247 Buildings and leasehold improvements 993,536 901,464 940,616 Fixtures and equipment 1,143,168 1,061,829 1,081,966 ----------- ----------- ----------- 2,139,951 1,966,540 2,025,829 Less accumulated depreciation and amortization 1,331,551 1,184,800 1,221,169 ----------- ----------- ----------- Net property and equipment 808,400 781,740 804,660 ----------- ----------- ----------- Goodwill 264,826 264,118 268,379 Intangible assets, net 94,548 98,783 97,538 Deferred taxes 124,603 138,969 123,231 Other noncurrent assets 24,072 38,941 37,710 Noncurrent assets of discontinued operations - 470,204 - ----------- ----------- ----------- Total assets $3,145,526 3,976,427 3,318,389 =========== =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $1,009,006 876,531 745,073 Accrued liabilities 536,191 426,367 580,509 Current liabilities of discontinued operations - 291,667 - ----------- ----------- ----------- Total current liabilities 1,545,197 1,594,565 1,325,582 Long-term debt 62,000 245,000 245,000 Deferred income taxes 193,743 161,756 193,743 Other long-term liabilities 369,038 372,386 379,180 Noncurrent liabilities of discontinued operations - 297,962 - Minority interest 5,349 2,782 8,942 Shareholders' equity: Common stock; $.001 par value; 300,000 shares authorized; 81,659, 78,672 and 79,276 shares issued, respectively 82 79 79 Additional paid-in capital 1,045,852 969,976 985,609 Accumulated other comprehensive loss (10,271) (8,484) (9,857) Retained earnings 399,553 536,428 386,134 Treasury stock, at cost, 16,315, 9,008 and 9,008 shares, respectively (465,017) (196,023) (196,023) ----------- ----------- ----------- Total shareholders' equity 970,199 1,301,976 1,165,942 ----------- ----------- ----------- Commitments and contingencies - - - ----------- ----------- ----------- Total liabilities and shareholders' equity $3,145,526 3,976,427 3,318,389 =========== ========== =========== (a) Restated to reflect certain adjustments relating to lease accounting. CONTACT: Barnes & Noble, Inc. Media: Mary Ellen Keating, 212-633-3323 Senior Vice President Corporate Communications or Investor: Joseph J. Lombardi, 212-633-3215 Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----