Barnes & Noble Education(BNED) - 2020 Q3 - Quarterly Report

Financial Performance - Total sales for the 39 weeks ended January 25, 2020, were $1,594.2 million, a decrease from$1,700.3 million for the same period in 2019, representing a decline of approximately 6.2%[162] - Total sales for the 13 weeks ended January 25, 2020, were $502.3 million, a decrease of 8.3$548.0 million for the same period in 2019[113] - Net loss for the 13 weeks ended January 25, 2020, was $1.7 million compared to a net income of$769,000 for the same period in 2019[113] - Adjusted EBITDA for the 39 weeks ended January 25, 2020, was $62.8 million, down from$85.3 million for the same period in 2019, reflecting a decrease of approximately 26.3%[162] - Adjusted EBITDA for the 13 weeks ended January 25, 2020, was $13.4 million, compared to$22.2 million for the same period in 2019, a decrease of 39.5%[158] - The company reported a gross profit of $380.1 million for the 39 weeks ended January 25, 2020, down from$410.7 million in the same period of 2019, a decrease of approximately 7.4%[162] - Gross profit for the 13 weeks ended January 25, 2020, was $118.5 million, compared to$132.9 million for the same period in 2019[120] Cost and Expenses - Total employee benefit expense for defined contribution plans was $3,683 during the 39 weeks ended January 25, 2020, compared to$4,978 for the same period in 2019, reflecting a decrease of 26%[82] - Stock-based compensation expense for the 39 weeks ended January 25, 2020, was $6,000, down from$6,851 in the prior year, indicating a reduction of approximately 12.4%[90] - Selling and administrative expenses for the 39 weeks ended January 25, 2020, were $317.3 million, compared to$325.4 million for the same period in 2019, a decrease of approximately 2.1%[162] - Selling and administrative expenses for the 13 weeks ended January 25, 2020, were $106.2 million, compared to$110.9 million for the same period in 2019[120] - Depreciation and amortization expense decreased by $1.3 million, or 7.7$15.1 million during the 13 weeks ended January 25, 2020[144] Revenue Segmentation - The Retail Segment's product sales accounted for 90.3% of total sales in the 13 weeks ended January 25, 2020, compared to 89.8% in the same period of 2019[114] - Retail sales decreased by $40.1 million, or 8.1$458.0 million during the 13 weeks ended January 25, 2020, compared to $498.1 million during the same period in 2019[124] - Retail sales decreased by$94.7 million, or 6.0%, to $1,474.4 million during the 39 weeks ended January 25, 2020, compared to$1,569.1 million during the same period in 2019[124] - Wholesale sales decreased by $11.5 million, or 14.7$67.0 million during the 13 weeks ended January 25, 2020, compared to $78.5 million during the same period in 2019[129] - DSS total sales increased by$1.2 million, or 22.9%, to $6.4 million during the 13 weeks ended January 25, 2020, compared to$5.2 million during the same period in 2019[130] Impairment and Restructuring - An impairment loss of $433 was recognized in the Retail segment during the 39 weeks ended January 25, 2020, related to non-recoverable capitalized development costs[79] - The company experienced a non-cash impairment loss of$433,000 during the 39 weeks ended January 25, 2020[119] - Restructuring and other charges totaled $3,240 during the 39 weeks ended January 25, 2020, primarily for professional service costs and employee termination benefits[80] - The company reported a restructuring charge of$205,000 for the 13 weeks ended January 25, 2020[120] - Restructuring and other charges totaled $0.2 million and$3.2 million for the 13 and 39 weeks ended January 25, 2020, respectively[145] Borrowings and Cash Flow - The company borrowed $383,400 and repaid$451,000 under the Credit Agreement during the 39 weeks ended January 25, 2020, with outstanding borrowings of $65,900 as of that date[78] - Cash flows provided by operating activities during the 39 weeks ended January 25, 2020, were$86.4 million, down from $175.9 million in the prior year, a decrease of$89.5 million[168] - The company experienced a net cash flow used in investing activities of $(21.7) million for the 39 weeks ended January 25, 2020, compared to$(41.7) million in the prior year, a decrease of approximately 48.0%[169] Strategic Initiatives - The company has retained Morgan Stanley & Co. as a financial advisor to explore strategic opportunities, including potential partnerships and acquisitions[98] - A significant cost reduction program was implemented in February 2020, with expected annualized cost savings primarily realized beginning in Fiscal 2021, and a restructuring charge anticipated between $10 million to$15 million[95] - The company implemented a cost reduction program in February 2020 to streamline operations and drive profitability[146] Market Conditions and Risks - The overall economic environment and college enrollment trends are critical factors affecting the company's business performance, with a noted decline in community college enrollments[105] - The company anticipates potential risks including a decline in college enrollment and competitive conditions that may impact future performance[184] - The company is unable to predict future trends for the consumer price index and inventory levels, making it difficult to project tax liabilities[175] Stock and Shareholder Information - The stock repurchase program authorized by the Board of Directors allows for up to $50 million in repurchases, with approximately$26.7 million remaining available as of January 25, 2020[176] - During the 39 weeks ended January 25, 2020, the company repurchased 374,733 shares outside of the stock repurchase program for employee tax withholding obligations[177] - The company has not repurchased any shares under the stock repurchase program during the 39 weeks ended January 25, 2020[176]