Barnes & Noble Education(BNED) - 2021 Q3 - Quarterly Report

Financial Performance - Total sales for the 13 weeks ended January 30, 2021, were $411,613 thousand, a decrease of 18.1$502,292 thousand for the same period in 2020[124]. - Net loss for the 13 weeks ended January 30, 2021, was $(48,289) thousand, compared to a net loss of$(1,693) thousand for the same period in 2020[124]. - Adjusted EBITDA for the 13 weeks ended January 30, 2021, was $(20,782) thousand, a significant decline from$13,415 thousand for the same period in 2020[124]. - Gross margin for the 13 weeks ended January 30, 2021, was 17.2%, down from 23.6% in the same period of the previous year[125]. - Total sales decreased by $90.7 million, or 18.1$411.6 million during the 13 weeks ended January 30, 2021, compared to $502.3 million during the same period in 2020[133]. - Total sales decreased by$383.1 million, or 24.0%, to $1,211.1 million during the 39 weeks ended January 30, 2021, compared to$1,594.2 million during the same period in 2020[133]. - The company reported an operating loss of $116.9 million for the 39 weeks ended January 30, 2021[134]. - The company experienced a gross profit of$220,459 thousand for the 39 weeks ended January 30, 2021, compared to $380,115 thousand for the same period in 2020, indicating a decline of about 42$27,630 was recognized during the 39 weeks ended January 30, 2021, with a tax impact of $20,506, primarily related to store-level long-lived assets[89]. - Restructuring and other charges totaled$10,727 for the 39 weeks ended January 30, 2021, primarily for severance and professional service costs[90]. - The company recognized a non-cash impairment loss of $27.6 million during the 13 weeks ended January 30, 2021, primarily related to store-level long-lived assets[161]. - The company recognized restructuring and other charges totaling$1.7 million during the 13 weeks ended January 30, 2021, primarily for severance and other employee termination costs[162]. Sales and Market Trends - The company expects general merchandise sales to continue increasing over the long term, driven by evolving consumer trends and enhanced e-commerce capabilities[103]. - The COVID-19 pandemic significantly impacted operations, with many schools adopting remote learning, leading to decreased foot traffic and sales in physical stores[107]. - The company anticipates ongoing enrollment declines in higher education, which could further impact sales and financial performance[116]. - The market for educational materials is undergoing significant changes, with increased competition from alternative sources and digital platforms[116]. - The retail segment's sales for the 39 weeks ended January 30, 2021, were $1,122,959 thousand, down from$1,474,413 thousand in the same period of 2020, a decrease of approximately 24%[176]. Operational Changes - The company implemented a significant cost reduction program aimed at streamlining operations and maximizing productivity, initiated in late Fiscal 2020[179]. - The company continued to adapt its offerings to support students and institutions during the pandemic, including providing free shipping and expanded digital content[179]. - The company opened 88 new stores and closed 66 stores during the 39 weeks ended January 30, 2021, ending with a total of 1,441 stores[137]. Cash Flow and Financing - Cash flows provided by operating activities during the 39 weeks ended January 30, 2021 were $41.6 million, a decrease of$50.4 million compared to $92.0 million during the same period in 2020[184]. - Cash flows used in investing activities were$(26.0) million for the 39 weeks ended January 30, 2021, compared to $(27.3) million in the prior year, primarily due to lower capital expenditures[186]. - Cash flows used in financing activities were$(13.9) million for the 39 weeks ended January 30, 2021, a significant decrease of $55.0 million compared to$(68.9) million in the same period in 2020[187]. - As of January 30, 2021, the company had $150.8 million in outstanding borrowings under its Credit Agreement, highlighting liquidity challenges[178]. Tax and Compensation - The company recorded an income tax benefit of$(35,334) on a pre-tax loss of $(122,760) during the 39 weeks ended January 30, 2021, resulting in an effective tax rate of 28.8$12,318 as of January 30, 2021, expected to be recognized over a weighted-average period of 2.4 years[98]. - The total compensation expense for long-term incentive awards was $5,586 for the 39 weeks ended January 30, 2021, compared to$6,000 for the same period in the previous year[98]. Legal and Compliance - The company is involved in various legal proceedings, including antitrust claims related to the sale of course materials, but does not expect these to have a material adverse effect on its financial position[100]. - The company has identified various risks including operational performance, technological changes, and data privacy issues that could impact its business[197]. - The company's disclosure controls and procedures were evaluated and deemed effective at a reasonable assurance level[201]. - No changes in internal control over financial reporting were identified during the third quarter that materially affected the company's reporting[202].