-----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, Bv/ITHLH7/QWK5Ev+HOrXgKiWIpfaf1jhvGa2b1t9ae5TLySrEzlIzwQwFTdOoHP G+T5L9Offb/4d4+7kHeI7w== 0001157523-07-002891.txt : 20070322 0001157523-07-002891.hdr.sgml : 20070322 20070322094940 ACCESSION NUMBER: 0001157523-07-002891 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070322 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070322 DATE AS OF CHANGE: 20070322 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: 07710692 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 a5361249.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) March 22, 2007 -------------------------------- 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 March 22, 2007, Barnes & Noble, Inc. (the "Company") issued a press release announcing its preliminary financial results for the fourth quarter and full year ended February 3, 2007 (the "Press Release"). A copy of the Press Release is attached hereto as Exhibit 99.1. The information in this Form 8-K and the Exhibit attached hereto pertaining to the Company's preliminary financial results shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing. Item 9.01 Financial Statements and Exhibits (d) Exhibits 99.1 Press Release of Barnes & Noble, Inc., dated March 22, 2007 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: March 22, 2007 Barnes & Noble, Inc. EXHIBIT INDEX Exhibit Number Description - -------------- ----------- 99.1 Press Release of Barnes & Noble, Inc., dated March 22, 2007 EX-99.1 2 a5361249ex99-1.txt EXHIBIT 99.1 Exhibit 99.1 Barnes & Noble Reports Preliminary 2006 Results: Issues First Quarter 2007 Guidance NEW YORK--(BUSINESS WIRE)--March 22, 2007--Barnes & Noble, Inc. (NYSE: BKS), the world's largest bookseller, today reported sales and preliminary financial results for the fourth quarter and the full year ended February 3, 2007, which consisted of fourteen weeks and fifty-three weeks, respectively. 2006 RESULTS As previously reported, Barnes & Noble store sales were $1,549 million for the quarter and $4,534 million for the full year. Excluding the impact of the extra week in this year's fiscal calendar, Barnes & Noble store sales increased 2% for the quarter and the full year as compared to the same periods in fiscal 2005. Comparable store sales decreased 0.1% for the quarter and 0.3% for the year. B. Dalton store sales were $36 million for the quarter and $102 million for the full year. Excluding the impact of the extra week in this year's fiscal calendar, B. Dalton store sales decreased 30% for the quarter and 29% for the full year as compared to the same periods in fiscal 2005, primarily due to the closing of 20 stores since the fourth quarter of 2005. Comparable store sales decreased 7.5% for the quarter and 6.1% for the year. Barnes & Noble.com sales were $164 million for the quarter and $433 million for the full year. Excluding the impact of the extra week in this year's fiscal calendar, Barnes & Noble.com comparable sales increased 5.1% for the quarter and decreased 1.1% for the full year as compared to the same periods in fiscal 2005. Consolidated sales were $1,878 million for the quarter and $5,261 million for the full year. As previously announced, the company will close its Memphis, Tennessee, Internet distribution center in 2007, and as a result, the company incurred charges, net of tax benefits, of $2.2 million in 2006, or $0.03 per share, related to accelerated depreciation and severance associated with the close-down of the Memphis facility. Preliminary net earnings increased 3% to $127.0 million, or $1.84 per share for the fourth quarter, and increased 3% to $150.8 million, or $2.18 per share, for the full year, in line with guidance updated on March 5, 2007. The company has adopted Statement of Financial Accounting Standards No. 123(R) (As Amended), "Share-Based Payment" (SFAS 123(R)), and began expensing stock options at the beginning of fiscal year 2006. Fourth quarter and full-year results include stock compensation expenses of $0.03 per share and $0.14 per share, respectively. 2007 GUIDANCE The company expects first quarter comparable store sales at Barnes & Noble stores to be flat to slightly positive, and as previously announced, full-year comparable store sales are also expected to be flat to slightly positive. Barnes & Noble, Inc.'s first quarter loss is expected to be in a range of $(0.08) to $(0.12) per share. The first quarter loss will include charges, net of tax benefits, of $3.7 million, or $0.06 per share, related to the previously mentioned closing of its Internet distribution center. The first quarter loss will also include charges related to legal expenses in the company's review of its stock option practices, net of tax benefits, of between $3.0 million and $4.5 million, or $0.05 to $0.07 per share. Excluding these charges, first quarter earnings (loss) per share are expected to be in a range of $(0.01) to $0.05 per share. As previously announced, Barnes & Noble, Inc.'s full-year earnings are expected to be in a range of $1.49 to $1.67 per share. The full-year earnings include expected charges, net of tax benefits, of $4.9 million, or $0.07 per share, related to the closing of its Internet distribution center. The full-year earnings also include expected charges related to legal expenses in the company's review of its stock option practices, net of tax benefits, of between $4 million and $6 million, or $0.06 to $0.09 per share. Excluding these charges, full-year earnings per share are expected to be in a range of $1.65 to $1.80 per share. The share count used in the computation of earnings per share is based on a basic weighted average share count of 65.1 million shares for the first quarter, and a fully diluted weighted average share count of 70.0 million shares for the full year. As of February 3, 2007, the company operated 695 Barnes & Noble stores and 98 B. Dalton stores. During the fourth quarter, nine Barnes & Noble stores were opened and six were closed. Eleven B. Dalton stores were closed during the quarter. REVIEW OF STOCK OPTION PRACTICES The special committee of Barnes & Noble's Board of Directors and its independent legal counsel have not yet finished their review of the company's stock option practices. Accordingly, the company has not yet determined the amount of any additional non-cash stock-based compensation expense related to stock option grants that may be recorded, and the preliminary results and guidance set forth herein do not include any such additional charges and are subject to adjustment based on the results of the internal review. A conference call with Barnes & Noble, Inc.'s senior management will be webcast beginning at 10:00 A.M. ET on Thursday, March 22, 2007, 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 first quarter earnings on or about May 24, 2007. ABOUT BARNES & NOBLE, INC. Barnes & Noble, Inc. (NYSE: BKS), the world's largest bookseller and a Fortune 500 company, operates 793 bookstores in 50 states. For the fifth 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, the results of the internal review of the company's stock option practices and the related inquiries by the Securities and Exchange Commission and the U.S. Department of Justice and related stockholder derivative lawsuits, 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 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) - ---------------------------------------------------------------------- 14 weeks 13 weeks 53 weeks 52 weeks ended ended ended ended --------------------------------- ---------- February 3, January February January 2007 28, 2006 3, 2007 28, 2006 -------------------------------------------- Sales $1,878,402 1,753,249 5,261,254 5,103,004 Cost of sales and occupancy 1,259,407 1,176,720 3,622,962 3,535,837 ----------- ---------- ---------- ---------- Gross profit 618,995 576,529 1,638,292 1,567,167 ----------- ---------- ---------- ---------- Selling and administrative expenses 351,049 317,727 1,201,261 1,131,448 Depreciation and amortization 46,872 42,556 170,338 172,957 Pre-opening expenses 2,411 1,668 12,897 10,938 ----------- ---------- ---------- ---------- Operating profit 218,663 214,578 253,796 251,824 Interest (income) expense, net 1,645 496 1,537 (1,415) ----------- ---------- ---------- ---------- Income before taxes and minority interest 220,308 215,074 255,333 250,409 Income taxes 88,499 87,643 102,772 102,042 ----------- ---------- ---------- ---------- Income before minority interest 131,809 127,431 152,561 148,367 Minority interest (4,831) (4,450) (1,788) (1,686) ----------- ---------- ---------- ---------- Net income $ 126,978 122,981 150,773 146,681 =========== ========== ========== ========== Income per common share: Basic $ 1.95 1.88 2.31 2.17 Diluted $ 1.84 1.76 2.18 2.03 Weighted average common shares outstanding Basic 65,095 65,374 65,212 67,560 Diluted 69,131 69,855 69,226 72,150 Percentage of sales: Sales 100.0% 100.0% 100.0% 100.0% Cost of sales and occupancy 67.0% 67.1% 68.9% 69.3% ----------- ---------- ---------- ---------- Gross profit 33.0% 32.9% 31.1% 30.7% ----------- ---------- ---------- ---------- Selling and administrative expenses 18.7% 18.1% 22.8% 22.2% Depreciation and amortization 2.5% 2.4% 3.2% 3.4% Pre-opening expenses 0.1% 0.1% 0.2% 0.2% ----------- ---------- ---------- ---------- Operating profit 11.6% 12.2% 4.8% 4.9% Interest (income) expense, net 0.1% 0.0% 0.0% 0.0% ----------- ---------- ---------- ---------- Income before taxes and minority interest 11.7% 12.3% 4.9% 4.9% Income taxes 4.7% 5.0% 2.0% 2.0% ----------- ---------- ---------- ---------- Income before minority interest 7.0% 7.3% 2.9% 2.9% Minority interest -0.3% -0.3% 0.0% 0.0% ----------- ---------- ---------- ---------- Net income 6.8% 7.0% 2.9% 2.9% =========== ========== ========== ========== BARNES & NOBLE, INC. AND SUBSIDIARIES Consolidated Balance Sheets (In thousands, except per share data) - ---------------------------------------------------------------------- February 3, January 28, 2007 2006 ------------ ------------ ASSETS Current assets: Cash and cash equivalents $ 348,767 372,586 Receivables, net 100,467 99,117 Merchandise inventories 1,354,580 1,313,997 Prepaid expenses and other current assets 132,781 74,476 ------------ ------------ Total current assets 1,936,595 1,860,176 ------------ ------------ Property and equipment: Land and land improvements 3,247 3,247 Buildings and leasehold improvements 990,058 984,535 Fixtures and equipment 1,310,026 1,174,973 ------------ ------------ 2,303,331 2,162,755 Less accumulated depreciation and amortization 1,497,275 1,356,379 ------------ ------------ Net property and equipment 806,056 806,376 ------------ ------------ Goodwill 259,683 263,731 Intangible assets, net 91,176 93,834 Deferred taxes 140,318 114,046 Other noncurrent assets 13,342 25,969 ------------ ------------ Total assets $3,247,170 3,164,132 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 792,977 828,852 Accrued liabilities 728,393 683,816 ------------ ------------ Total current liabilities 1,521,370 1,512,668 ------------ ------------ Long-term debt - - Deferred taxes 192,050 158,035 Other long-term liabilities 364,002 367,531 Minority interest 10,660 10,057 Shareholders' equity: Common stock; $.001 par value; 300,000 shares authorized; 84,608 and 83,370 shares issued, respectively 85 83 Additional paid-in capital 1,140,337 1,091,018 Accumulated other comprehensive loss (7,086) (9,085) Retained earnings 623,457 512,594 Treasury stock, at cost, 19,520 and 16,690 shares, respectively (597,705) (478,769) ------------ ------------ Total shareholders' equity 1,159,088 1,115,841 ------------ ------------ Commitments and contingencies - - ------------ ------------ Total liabilities and shareholders' equity $3,247,170 3,164,132 ============ ============ CONTACT: Media: Barnes & Noble, Inc. Mary Ellen Keating, 212-633-3323 Senior Vice President Corporate Communications or Investors: Barnes & Noble, Inc. Joseph J. Lombardi, 212-633-3215 Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----