Barnes & Noble Education Announces Preliminary Fiscal Year 2024 Results
Preliminary Unaudited Fiscal 2024 Full-Year Financial Highlights
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Consolidated fiscal year 2024 GAAP revenue of approximately
$1,567 million , compared to$1,543 million in the prior year period. -
Consolidated fiscal year 2024 GAAP net loss from continuing operations of approximately
$(63) million , compared to a net loss of$(90) million in the prior year period. -
Consolidated fiscal year 2024 non-GAAP Adjusted EBITDA from Continuing Operations of approximately
$45 million , as compared to$(8) million in the prior year period. The Company’s previously issued fiscal year 2024 non-GAAP Adjusted EBITDA from Continuing Operations guidance was$40 million .
The results reported in this press release are preliminary and unaudited. The Company has not yet completed its annual financial close process for the fiscal 2024 fourth quarter and full year, and its independent auditors have not completed their audit of the Company’s financial statements for the fiscal 2024 full year. This update does not present all necessary information for an understanding of the Company’s results of operations for the fiscal 2024 fourth quarter and full year. As the Company completes its annual financial close process and finalizes its financial statements for the fiscal 2024 fourth quarter and full year, and as its independent auditors complete their audit of the Company’s financial statements for the fiscal 2024 full year, it is possible the Company may identify items that require adjustments to the preliminary financial information set forth in this press release, and those changes could be material. The Company does not intend to update such financial information prior to the release of its final fourth quarter and full year financial results and the filing of its Form 10-K which is required to be filed on or before
Rights Offering and Other Actions
The Company continues to move forward on its previously announced proposed transactions (the “Transactions”) that will enable the Company to substantially deleverage its balance sheet, strategically invest in innovation and operate from a position of strength. The Transactions remain subject to shareholder approval and other closing conditions. Only shareholders of record as of the close of business on the record date of
Upon closing of the Transactions, which is currently expected to occur in
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BNED will receive gross proceeds of
$95 million of new equity capital through a fully backstopped$45 million Rights Offering and a$50 million new equity investment (the “Private Investment”) led by (NASDAQ: IMMR) (“Immersion”); the Transactions are expected to infuse approximatelyImmersion Corporation $75 million of net cash proceeds after transaction costs; -
The Company’s existing second lien lenders will convert approximately
$34 million of outstanding principal and any accrued and unpaid interest into BNED Common Stock; and -
The Company has received commitments to refinance its existing asset backed loan facility, pursuant to an agreement with its first lien holders, providing the Company with access to a
$325 million facility (the “ABL Facility”) maturing in 2028. The refinanced ABL Facility will meaningfully enhance BNED’s financial flexibility and reduce its annual interest expense.
Through the Rights Offering, BNED will issue 900,000,000 shares of its common stock, par value
If any Subscription Rights remain unexercised upon the expiration of the Rights Offering after accounting for all Over-Subscription Rights exercised, the standby purchasers led by Immersion,
The Company will not issue fractional shares in the Rights Offering or cash in lieu of fractional shares of Common Stock. Any fractional shares of Common Stock that would be created by an exercise of the Subscription Rights will be rounded to the nearest whole share.
The Company expects that the proceeds of the offering will be used to pay expenses in connection with the Transactions and reduce the balance under the Company’s existing ABL Facility.
The shares of Common Stock to be issued upon exercise of the Subscription Rights will be listed for trading on the
Neither the Company nor its Board of Directors has made or will make any recommendation to holders regarding the exercise of Subscription Rights. Holders should make an independent investment decision about whether or not to exercise their Subscription Rights based on their own assessment of the Company’s business, the Rights Offering and the other Transactions.
Questions about the Rights Offering or requests for a copy of the prospectus related to the Rights Offering may be directed to the Information Agent,
Other Important Information
The issuance and sale of shares of Common Stock pursuant to the Rights Offering is subject to, among other things, the approval of our stockholders at a special meeting (the “Special Meeting”) to be held on
Consolidated Adjusted EBITDA (non-GAAP) From Continuing Operations (a) (b)
Dollars in millions |
52 weeks ended |
|||||||
|
|
|
||||||
Net loss from continuing operations |
$ |
(63.0 |
) |
$ |
(90.1 |
) |
||
Add: | ||||||||
Depreciation and amortization expense |
|
40.0 |
|
|
42.2 |
|
||
Interest expense, net |
|
40.4 |
|
|
22.7 |
|
||
Income tax expense |
|
1.0 |
|
|
1.0 |
|
||
Impairment loss (non-cash) |
|
7.2 |
|
|
6.0 |
|
||
Restructuring and other charges |
|
19.4 |
|
|
10.1 |
|
||
Adjusted EBITDA (Non-GAAP) - Continuing Operations |
$ |
45.0 |
|
$ |
(8.1 |
) |
(a) |
|
For additional information, see "Use of Non-GAAP Financial Information" in the Non-GAAP disclosure information of this Press Release. |
(b) |
|
Results are preliminary and unaudited. As the Company completes its annual financial close process and finalizes its financial statements for the fiscal 2024 fourth quarter and full year, and as its independent auditors complete their audit of the Company’s financial statements for the fiscal 2024 full year, it is possible the Company may identify items that require adjustments to the preliminary financial information presented. Changes could be material. The Company’s Form 10-K is required to be filed on or before |
Use of Non-GAAP Financial Information - Adjusted EBITDA
To supplement the Company’s preliminary financial results presented in accordance with generally accepted accounting principles (“GAAP”), the Company uses the financial measure of Adjusted EBITDA, which is a non-GAAP financial measure under
The non-GAAP measure included in this Press Release has been reconciled to the most comparable financial measure presented in accordance with GAAP, as follows: the reconciliation of consolidated Adjusted EBITDA to consolidated net income (loss) from continuing operations. All of the items included in the reconciliation are either (i) non-cash items or (ii) items that management does not consider in assessing our on-going operating performance.
This non-GAAP financial measure is not intended as a substitute for and should not be considered superior to measures of financial performance prepared in accordance with GAAP. In addition, the Company's use of this non-GAAP financial measure may be different from similarly named measures used by other companies, limiting their usefulness for comparison purposes.
We review this non-GAAP financial measure as an internal measure to evaluate our performance at a consolidated level and manage our operations. We believe that this measure is a useful performance measure which is used by us to facilitate a comparison of our on-going operating performance on a consistent basis from period-to-period. We believe that this non-GAAP financial measure provides for a more complete understanding of factors and trends affecting our business than measures under GAAP can provide alone, as they exclude certain items that management believes do not reflect the ordinary performance of our operations in a particular period. Our Board of Directors and management also use Adjusted EBITDA, at a consolidated level and at a segment level, as one of the primary methods for planning and forecasting expected performance, for evaluating on a quarterly and annual basis actual results against such expectations, and as a measure for performance incentive plans. We believe that the inclusion of Adjusted EBITDA results provides investors useful and important information regarding our operating results, in a manner that is consistent with management’s evaluation of business performance.
About
Forward-Looking Statements
This press release contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and information relating to us and our business that are based on the beliefs of our management as well as assumptions made by and information currently available to our management. When used in this communication, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “will,” “forecasts,” “projections,” and similar expressions, as they relate to us or our management, identify forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this press release may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Such statements reflect our current views with respect to future events, the outcome of which is subject to certain risks, including, among others: our preliminary unaudited Fiscal 2024 full-year financial results; the completion, timing, size and use of proceeds of the Transactions; the approval by our stockholders of the Transactions at the Special Meeting; the amount of our indebtedness and ability to comply with covenants applicable to current and/or any future debt financing; our ability to satisfy future capital and liquidity requirements; our ability to continue as a going concern; our ability to access the credit and capital markets at the times and in the amounts needed and on acceptable terms; our ability to maintain adequate liquidity levels to support ongoing inventory purchases and related vendor payments in a timely manner; our ability to attract and retain employees; the pace of equitable and inclusive access adoption in the marketplace is slower than anticipated and our ability to successfully convert the majority of our institutions to our BNC First Day® equitable and inclusive access course material models or successfully compete with third parties that provide similar equitable and inclusive access solutions; the
Additional Information Regarding the Special Meeting and Where to Find It
The Company has filed a proxy statement and proxy card with the
Certain Information Regarding Participants
The Company, its directors and certain of its executive officers and employees may be deemed participants in connection with the solicitation of proxies from the Company’s stockholders in connection with the matters to be considered at the Special Meeting. Information regarding the direct and indirect interests, by security holdings or otherwise, of the Company’s directors and executive officers in the Company is included in the Company’s definitive Proxy Statement on Schedule 14A for the Special Meeting under the heading “Security Ownership of Certain Beneficial Owners and Management” filed with the
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BNED Contact – Media and Investors
Vice President – Corporate Communications and Investor Relations
(908) 991-2776
hblankenbaker@bned.com
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