Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jul. 29, 2023 | Sep. 01, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Entity Shell Company | false | |
Entity Registrant Name | BARNES & NOBLE EDUCATION, INC. | |
Entity Central Index Key | 0001634117 | |
Current Fiscal Year End Date | --04-27 | |
Entity Filer Category | Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 52,705,377 | |
Document Quarterly Report | true | |
Trading Symbol | BNED | |
Security Exchange Name | NYSE | |
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Document Transition Report | false | |
Entity File Number | 1-37499 | |
Local Phone Number | 991-2665 | |
City Area Code | (908) | |
Entity Address, Postal Zip Code | 07920 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-0599018 | |
Entity Address, State or Province | NJ | |
Entity Address, City or Town | Basking Ridge, | |
Entity Address, Address Line One | 120 Mountain View Blvd., | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Document Period End Date | Jul. 29, 2023 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Jul. 29, 2023 | Jul. 30, 2022 | |
Sales: | ||
Product sales and other | $ 252,650 | $ 243,762 |
Rental income | 11,511 | |
Total sales | 264,161 | 254,674 |
bned_Cost of Product and Other Cost of Sales | 207,014 | 192,404 |
Rental cost of sales | 6,513 | 6,265 |
Cost of Goods and Services Sold | 213,527 | 198,669 |
Gross profit | 50,634 | 56,005 |
Selling and administrative expenses | 77,476 | 90,341 |
Depreciation and amortization expense | 10,253 | 10,896 |
Restructuring and other charges | 4,633 | 375 |
Operating Income (Loss) | (41,728) | (45,607) |
Interest expense, net | 8,254 | 3,868 |
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest, Total | (49,982) | (49,475) |
Income tax expense (benefit) | (11) | 847 |
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent | (49,971) | (50,322) |
Net (loss) income | $ (50,388) | $ (52,707) |
Income (Loss) from Continuing Operations, Per Diluted Share | $ (0.95) | $ (0.96) |
Income (Loss) from Continuing Operations, Per Basic Share | (0.95) | (0.96) |
Discontinued Operation, Income (Loss) from Discontinued Operation, Net of Tax, Per Diluted Share | (0.01) | (0.05) |
Discontinued Operation, Income (Loss) from Discontinued Operation, Net of Tax, Per Basic Share | (0.01) | (0.05) |
(Loss) Earnings per share of common stock | ||
Basic | (0.96) | (1.01) |
Diluted | $ (0.96) | $ (1.01) |
Weighted average common shares outstanding | ||
Diluted | 52,642 | 52,172 |
Basic | 52,642 | 52,172 |
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | $ (417) | $ (2,385) |
Discontinued Operation, Tax Effect of Discontinued Operation | 20 | 86 |
Retail Segment [Member] | ||
Sales: | ||
Total sales | 245,460 | 236,507 |
Gross profit | 50,291 | 53,993 |
Selling and administrative expenses | 69,173 | 79,004 |
Depreciation and amortization expense | 8,966 | 9,529 |
Restructuring and other charges | 526 | 0 |
Operating Income (Loss) | $ (28,374) | (34,540) |
Retail Segment [Member] | Transferred over Time | ||
Sales: | ||
Rental income | $ 10,912 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) shares in Thousands, $ in Thousands | Jul. 29, 2023 | Apr. 29, 2023 | Jul. 30, 2022 |
Current assets: | |||
Cash and cash equivalents | $ 7,657 | $ 14,219 | $ 7,615 |
Receivables, net | 140,858 | 92,512 | 118,954 |
Merchandise inventories, net | 384,185 | 322,979 | 463,555 |
Textbook rental inventories | 6,860 | 30,349 | 8,501 |
Prepaid expenses and other current assets | 59,012 | 49,512 | 57,184 |
Disposal Group, Including Discontinued Operation, Assets | 0 | 27,430 | 30,425 |
Total current assets | 598,572 | 537,001 | 686,234 |
Net property and equipment | 64,438 | 68,153 | 73,734 |
Operating Lease, Right-of-Use Asset | 283,096 | 246,972 | 318,070 |
Intangible assets, net | 107,413 | 110,632 | 123,339 |
Deferred Tax Assets, Tax Deferred Expense | 0 | 132 | 0 |
Other noncurrent assets | 17,298 | 17,889 | 22,242 |
Total assets | 1,070,817 | 980,779 | 1,223,619 |
Current liabilities: | |||
Accounts payable | 275,380 | 267,923 | 324,397 |
Accrued liabilities | 89,792 | 85,759 | 88,982 |
Operating Lease, Liability, Current | 150,917 | 99,980 | 149,587 |
Short-term Debt | 0 | 0 | 40,000 |
Disposal Group, Including Discontinued Operation, Liabilities | 0 | 8,423 | 5,482 |
Total current liabilities | 516,089 | 462,085 | 608,448 |
Deferred Income Tax Liabilities, Net | 1,836 | 1,970 | 1,430 |
Operating Lease, Liability, Noncurrent | 171,154 | 184,754 | 197,407 |
Other long-term liabilities | 23,016 | 19,068 | 20,938 |
Long-Term Debt | 277,663 | 182,151 | 218,550 |
Liabilities | 989,758 | 850,028 | 1,046,773 |
Commitments and contingencies | 0 | 0 | 0 |
Preferred Stock, Value, Issued | 0 | 0 | 0 |
Common Stock, Value, Outstanding | 553 | 551 | 547 |
Additional Paid in Capital | 746,724 | 745,932 | 742,624 |
Retained Earnings (Accumulated Deficit) | (643,744) | (593,356) | (544,201) |
Treasury Stock, Value | (22,474) | (22,376) | (22,124) |
Total Equity | 81,059 | 130,751 | 176,846 |
Total liabilities and Parent Company equity | $ 1,070,817 | $ 980,779 | $ 1,223,619 |
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized | 5,000 | 5,000 | 5,000 |
Preferred Stock, Shares Issued | 0 | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 200,000 | 200,000 | 200,000 |
Common Stock, Shares, Issued | 55,319 | 55,140 | 54,774 |
Common Stock, Shares, Outstanding | 52,705 | 52,604 | 52,348 |
Statement of Cash Flows (Statem
Statement of Cash Flows (Statement) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jul. 29, 2023 | Jul. 30, 2022 | Apr. 29, 2023 | Apr. 30, 2022 | |
Statement of Cash Flows [Abstract] | ||||
Net Income (Loss) Attributable to Parent | $ (50,388) | $ (52,707) | ||
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | (417) | (2,385) | ||
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent | (49,971) | (50,322) | $ (90,140) | $ (61,559) |
Depreciation and amortization expense | 10,253 | 10,896 | ||
Content Amortization | 0 | 26 | ||
Amortization of Debt Issuance Costs | 1,244 | 555 | ||
Increase (Decrease) in Deferred Income Taxes | (3) | 0 | ||
Share-based Compensation | 957 | 1,576 | ||
Increase (Decrease) in Operating Liabilities | 721 | (1,230) | ||
Increase (Decrease) in Other Noncurrent Assets and Liabilities, Net | 4,056 | 1,782 | ||
Increase (Decrease) in Receivables | (48,346) | 17,048 | ||
Increase (Decrease) in Inventories | (61,206) | (169,701) | ||
Increase (Decrease) in Rental Inventories | 23,489 | 21,110 | ||
Increase (Decrease) in Prepaid Expense and Other Assets | (12,168) | (782) | ||
Accounts payable and accrued liabilities | 11,116 | 140,435 | ||
Increase (Decrease) in Other Current Assets and Liabilities, Net | (87,115) | 8,110 | ||
Net Cash Provided by (Used in) Operating Activities, Continuing Operations | (119,858) | (28,607) | 90,513 | (16,195) |
Cash Provided by (Used in) Operating Activities, Discontinued Operations | (3,266) | (392) | ||
Net Cash Provided by (Used in) Operating Activities | (123,124) | (28,999) | ||
Payments to Acquire Property, Plant, and Equipment | (4,219) | (7,530) | ||
Increase (Decrease) in Other Noncurrent Assets | 78 | 0 | ||
Net Cash Provided by (Used in) Investing Activities, Continuing Operations | (4,141) | (7,530) | ||
Cash Provided by (Used in) Investing Activities, Discontinued Operations | 21,395 | (2,196) | ||
Net Cash Provided by (Used in) Investing Activities | 17,254 | (9,726) | ||
Proceeds from Issuance of Secured Debt | 145,187 | 147,200 | ||
Proceeds from (Repayments of) Secured Debt | (49,606) | (112,600) | ||
Payments of Debt Issuance Costs | (2,307) | (559) | ||
Payments for Repurchase of Common Stock | (98) | (612) | ||
Net Cash Provided by (Used in) Financing Activities, Continuing Operations | 93,176 | 33,429 | ||
Cash Provided by (Used in) Financing Activities, Discontinued Operations | 0 | 0 | ||
Net Cash Provided by (Used in) Financing Activities | 93,176 | 33,429 | ||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect | (12,694) | (5,296) | ||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 19,294 | 15,740 | $ 31,988 | $ 21,036 |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Disposal Group, Including Discontinued Operations | 0 | 633 | ||
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Including Disposal Group and Discontinued Operations | $ 19,294 | $ 15,107 |
Consolidated Statement of Equit
Consolidated Statement of Equity Statement - USD ($) $ in Thousands | Total | Additional Paid-in Capital [Member] | Common Stock [Member] | Retained Earnings | Treasury Stock, Common |
Common Stock, Shares, Issued | 54,234,000 | ||||
Total Equity | $ 228,374 | $ 740,838 | $ 542 | $ (491,494) | |
Treasury Stock, Common, Shares | 2,188,000 | ||||
Treasury Stock, Value | (21,512) | ||||
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | 540,000 | ||||
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures | 0 | (5) | $ 5 | ||
Stock-based compensation expense | 1,791 | 1,791 | |||
CostOfRepurchasedSharesForTaxWittholdingForShareBasedCompensation | (612) | ||||
Net Income (Loss) Attributable to Parent | (52,707) | ||||
Stock Issued During Period, Value, Treasury Stock Reissued | $ (612) | ||||
Stock Issued During Period, Shares, Treasury Stock Reissued | 238,000 | ||||
Common Stock, Shares, Issued | 54,774,000 | 54,774,000 | |||
Total Equity | $ 176,846 | 742,624 | $ 547 | (544,201) | |
Treasury Stock, Common, Shares | 2,426,000 | ||||
Treasury Stock, Value | $ (22,124) | ||||
Common Stock, Shares, Issued | 55,140,000 | 55,140,000 | |||
Total Equity | $ 130,751 | 745,932 | $ 551 | (593,356) | |
Treasury Stock, Common, Shares | 2,536,000 | ||||
Treasury Stock, Value | (22,376) | ||||
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | 179,000 | ||||
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures | 0 | (2) | $ 2 | ||
Stock-based compensation expense | $ 794 | 794 | |||
Shares repurchased for tax withholdings for vested stock awards | 77,898 | ||||
CostOfRepurchasedSharesForTaxWittholdingForShareBasedCompensation | $ (98) | ||||
Net Income (Loss) Attributable to Parent | (50,388) | ||||
Stock Issued During Period, Value, Treasury Stock Reissued | $ (98) | ||||
Stock Issued During Period, Shares, Treasury Stock Reissued | 78,000 | ||||
Common Stock, Shares, Issued | 55,319,000 | 55,319,000 | |||
Total Equity | $ 81,059 | $ 746,724 | $ 553 | $ (643,744) | |
Treasury Stock, Common, Shares | 2,614,000 | ||||
Treasury Stock, Value | $ (22,474) |
Organization
Organization | 3 Months Ended |
Jul. 29, 2023 | |
Organization | Note 1. Organization Description of Business Barnes & Noble Education, Inc. (“BNED”) is one of the largest contract operators of physical and virtual bookstores for college and university campuses and K-12 institutions across the United States. We are also one of the largest textbook wholesalers, inventory management hardware and software providers. We operate 1,289 physical, virtual, and custom bookstores and serve more than 5.8 million students, delivering essential educational content, tools and general merchandise within a dynamic omnichannel retail environment. The strengths of our business include our ability to compete by developing new products and solutions to meet market needs, our large operating footprint with direct access to students and faculty, our well-established, deep relationships with academic partners and stable, long-term contracts and our well-recognized brands. We provide product and service offerings designed to address the most pressing issues in higher education, including equitable access, enhanced convenience and improved affordability through innovative course material delivery models designed to drive improved student experiences and outcomes. We offer our BNC First Day ® equitable and inclusive access programs, consisting of First Day Complete and First Day , which provide faculty required course materials on or before the first day of class at a discounted rate, as compared to the total retail price for the same course materials if purchased separately. The BNC First Day discounted price is offered as a course fee or included in tuition. During the first quarter ended July 29, 2023, BNC First Day total revenue increased by $16,715, or 37%, to $61,773 compared to $45,057 during the prior year period. We expect to continue to introduce scalable and advanced solutions focused largely on the student and customer experience, expand our e-commerce capabilities and accelerate such capabilities through our merchandising partnership with Fanatics Retail Group Fulfillment, LLC, Inc. (“Fanatics”) and Fanatics Lids College, Inc. D/B/A "Lids" (“Lids”) (collectively referred to herein as the “F/L Partnership”), win new accounts, and expand our strategic opportunities through partnerships. We expect gross general merchandise sales to continue to increase over the long term, as our product assortments continue to emphasize and reflect changing consumer trends, and we evolve our presentation concepts and merchandising of products in stores and online, which we expect to be further enhanced and accelerated through the F/L Partnership. Through this partnership, we receive unparalleled product assortment, e-commerce capabilities and powerful digital marketing tools to drive increased value for customers and accelerate growth of our logo general merchandise business. The Barnes & Noble brand (licensed from our former parent) along with our subsidiary brands, BNC and MBS, are synonymous with innovation in bookselling and campus retailing, and are widely recognized and respected brands in the United States. Our large college footprint, reputation, and credibility in the marketplace not only support our marketing efforts to universities, students, and faculty, but are also important to our relationship with leading publishers who rely on us as one of their primary distribution channels. During the fourth quarter of Fiscal 2023, assets related to our DSS Segment met the criteria for classification as Assets Held for Sale and Discontinued Operations and is no longer a reportable segment. We have two reportable segments: Retail and Wholesale. For additional information related to our strategies, operations and segments, see Part I - Item 1. Business in our Annual Report on Form 10-K for the fiscal year ended April 29, 2023 . BNC First Day Equitable and Inclusive Access Programs We provide product and service offerings designed to address the most pressing issues in higher education, including equitable access, enhanced convenience and improved affordability through innovative course material delivery models designed to drive improved student experiences and outcomes. We offer our BNC First Day ® equitable and inclusive access programs, consisting of First Day Complete and First Day , which provide faculty required course materials on or before the first day of class at a discounted rate, as compared to the total retail price for the same course materials if purchased separately. The BNC First Day discounted price is offered as a course fee or included in tuition. • First Day Complete is adopted by an institution and includes all undergraduate classes (and on occasion graduate classes), providing students both physical and digital materials. The First Day Complete model drives substantially greater unit sales and sell-through for the bookstore. • First Day is adopted by a faculty member for a single course, and students receive primarily digital course materials through their school's learning management system ("LMS"). Offering course materials through our equitable and inclusive access First Day Complete and First Day models is a key, and increasingly important strategic initiative of ours to meet the market demands of substantially reduced pricing to students, as well as the opportunity to improve student outcomes, while, at the same time, increasing our market share, revenue and relative gross profits of course material sales given the higher volumes of units sold in such models as compared to historical sales models that rely on individual student marketing and sales. These programs have allowed us to reverse historical long-term trends in course materials revenue declines, which have been observed at those schools where such programs have been adopted. We are moving quickly and decisively to accelerate our First Day Complete strategy. We plan to move many institutions to First Day Complete in Fiscal 2024 and the majority of our schools by Fiscal 2025, with continued relative adoption of this model thereafter. In the Fall of 2023, 157 campus stores are utilizing First Day ® Complete representing enrollment of nearly 800,000 undergraduate and post graduate students (as reported by National Center for Education Statistics), an increase of approximately 46% compared to Fall of 2022. During the 13 weeks ended July 29, 2023, First Day Complete sales increased by $9,058, or 55%, to $25,522 as compared to $16,464 in the prior year period. During the 13 weeks ended July 29, 2023, First Day sales increased by $7,657, or 27%, to $36,251 as compared to $28,593 in the prior year period. Partnership with Fanatics and Lids In December 2020, we entered into the F/L Partnership. Through this partnership, we receive unparalleled product assortment, e-commerce capabilities and powerful digital marketing tools to drive increased value for customers and accelerate growth of our general merchandise business. Fanatics’ cutting-edge e-commerce and technology expertise offers our campus stores expanded product selection, a world-class online and mobile experience, and a progressive direct-to-consumer platform. Coupled with Lids, the leading standalone brick and mortar retailer focused exclusively on licensed fan and alumni products, our campus stores have improved access to trend and sales performance data on licensees, product styles, and design treatments. We maintain our relationships with campus partners and remain responsible for staffing and managing the day-to-day operations of our campus bookstores. We also work closely with our campus partners to ensure that each campus store maintains unique aspects of in-store merchandising, including localized product assortments and specific styles and designs that reflect each campus’s brand. We leverage Fanatics’ e-commerce technology and expertise for the operational management of the emblematic merchandise and gift sections of our campus store websites. Lids manages in-store assortment planning and merchandising of emblematic apparel, headwear, and gift products for our partner campus stores, and Lids owns the inventory it manages, relieving us of the obligation to finance inventory purchases from working capital. |
Employees Benefit Plan
Employees Benefit Plan | 3 Months Ended |
Jul. 29, 2023 | |
Employees' Defined Contribution Plan | Note 11. Employee Benefit Plans We sponsor defined contribution plans for the benefit of substantially all of the employees of BNC. MBS maintains a profit sharing plan covering substantially all full-time employees of MBS. For all plans, we are responsible to fund the employer contributions directly. Total employee benefit expense for these plans was $1,097 and $1,259 during the 13 weeks ended July 29, 2023 and July 30, 2022, respectively. |
Organization - Additional Infor
Organization - Additional Information Person in Thousands, $ in Thousands | 3 Months Ended | |
Jul. 29, 2023 USD ($) segment Person Store | Jul. 30, 2022 USD ($) | |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||
Number of Stores | Store | 1,289 | |
Number of students covered to build relationships and derive sales | Person | 5,800 | |
Number of Reportable Segments | segment | 2 | |
First Day Complete Revenue description [Abstract] | ||
Revenues | $ 264,161 | $ 254,674 |
First Day Complete | ||
First Day Complete Revenue description [Abstract] | ||
Revenues | 25,522 | 16,464 |
Revenue Change [Abstract] | ||
Revenue Variance | $ 9,058 | |
Revenue Change Percent | 55% | |
BNC First Day | ||
First Day Complete Revenue description [Abstract] | ||
Revenues | $ 61,773 | 45,057 |
Revenue Change [Abstract] | ||
Revenue Variance | $ 16,715 | |
Revenue Change Percent | 37% | |
First Day | ||
First Day Complete Revenue description [Abstract] | ||
Revenues | $ 36,251 | $ 28,593 |
Revenue Change [Abstract] | ||
Revenue Variance | $ 7,657 | |
Revenue Change Percent | 27% |
Employees Benefit Plans - Addit
Employees Benefit Plans - Additional Information - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 29, 2023 | Jul. 30, 2022 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Company contributions, employee benefit expenses | $ 1,097 | $ 1,259 |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Notes) | 3 Months Ended |
Jul. 29, 2023 | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Basis of Presentation and Consolidation Our condensed consolidated financial statements reflect our condensed consolidated financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States (“GAAP”). Net income (loss) is equal to comprehensive income (loss) on our condensed consolidated statement of operations. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements of the Company contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly its consolidated financial position and the results of its operations and cash flows for the periods reported. These consolidated financial statements are condensed and therefore do not include all of the information and footnotes required by GAAP. All material intercompany accounts and transactions have been eliminated in consolidation. Our fiscal year is comprised of 52 or 53 weeks, ending on the Saturday closest to the last day of April. Due to the seasonal nature of the business, the results of operations for the 13 weeks ended July 29, 2023 are not indicative of the results expected for the 52 weeks ending April 27, 2024 (Fiscal 2024). Liquidity and Going Concern The accompanying condensed consolidated financial statements are prepared in accordance with U.S. GAAP applicable to a going concern. This presentation contemplates the realization of assets and the satisfaction of liabilities in the normal course of business and does not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described below. Pursuant to ASC 205-40, Presentation of Financial Statements — Going Concern (“ASC 205-40”) , management must evaluate whether there are conditions and events, considered in aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that these condensed consolidated financial statements are issued. In accordance with ASC 205-40, management’s analysis can only include the potential mitigating impact of management’s plans that have not been fully implemented as of the issuance date of these condensed consolidated financial statements if (a) it is probable that management’s plans will be effectively implemented on a timely basis, and (b) it is probable that the plans, when implemented, will alleviate the relevant conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern. Our primary sources of cash are net cash flows from operating activities, funds available under our Credit Agreement, Term Loan Agreement, and short-term vendor financing. Our liquidity is highly dependent on the seasonal nature of our business, particularly with respect to course material sales, as sales are generally highest in the second and third fiscal quarters, when college students generally purchase textbooks for the upcoming Fall and Spring semesters, respectively. As of July 29, 2023, we had $19,294 of cash on hand, including $10,704 of restricted cash related to segregated funds for commission due to Fanatics for logo merchandise sales as per the merchandising partnership agreement. Our business was significantly negatively impacted by the COVID-19 pandemic during the years ended April 30, 2022 and May 1, 2021, as many schools adjusted their learning models and on-campus activities. Although most academic institutions have since reopened after the COVID-19 pandemic, the lingering impacts of the pandemic have resulted in changes in customer behaviors, lower enrollments, and an evolving educational landscape which continued to impact our financial results during the year ended April 29, 2023. Some institutions are still providing alternatives to traditional in-person instruction, including online and hybrid learning options and significantly reduced classroom sizes. The impact of COVID-19 store closings, as well as lower earnings during the year ended April 29, 2023, resulted in the loss of cash flows and increased borrowings that we would not otherwise have expected to incur. We incurred a Net Loss from Continuing Operations of $(49,971) and $(50,322) for the 13 weeks ended July 29, 2023 and July 30, 2022, respectively, and we incurred a Net Loss from Continuing Operations of $(90,140), $(61,559), and $(133,569) for the years ended April 29, 2023, April 30, 2022, and May 1, 2021, respectively. Our Cash Flow Used In Operating Activities from Continuing Operations were $(119,858) and $(28,607) for the 13 weeks ended July 29, 2023 and July 30, 2022, respectively, and were $90,513, $(16,195), and $27,049, for the years ended April 29, 2023, April 30, 2022, and May 1, 2021, respectively. The tightening of our available credit commitments, including the elimination and repayment of our seasonal borrowing facility (FILO Facility) of $40,000, has had a significant impact on our liquidity during the year ended April 29, 2023, including our ability to make timely vendor payments and school commission payments, resulting in a positive cash flow from operations offset by a use of cash for financing activities. Our losses and projected cash needs, combined with our current liquidity level, raised substantial doubt about our ability to continue as a going concern as of the year ended April 29, 2023, which Management subsequently remediated by implementing a plan to improve the Company’s liquidity and successfully alleviate substantial doubt including (1) raising additional liquidity an d (2) taking additional operational restructuring actions. Debt amendments On July 28, 2023, we amended our existing Credit Agreement to (i) extend the maturity date of the Credit Agreement to December 28, 2024, (ii) reduce advance rates with respect to the borrowing base by 1000 basis points on September 2, 2024 (in lieu of the reductions previously contemplated for September 2023), (iii) subject to the conditions set forth in such amendment, add a CARES Act tax refund claim to the borrowing base, from April 1, 2024 through July 31, 2024, (iv) amend the financial maintenance covenant to require Availability (as defined in the Credit Agreement) at all times greater than the greater of (x) 10% of the Aggregate Loan Cap (as defined in the Credit Agreement) and (y) (A) $32,500 minus, subject to the conditions set forth in such amendment, (B) (a) $7,500 for the period of April 1, 2024 through and including April 30, 2024, (b) $2,500 for the period of May 1, 2024 through and including May 31, 2024 and (c) $0 at all other times, (v) add a minimum Consolidated EBITDA (as defined in the Credit Agreement) financial maintenance covenant, and (vi) amend certain negative and affirmative covenants and add certain additional covenants, all as more particularly set forth in such amendment. The amendment also requires that we appoint a Chief Restructuring Officer and that, by August 11, 2023, we (i) appoint two independent members to the board of directors of the Company from prospective candidates that have been previously disclosed to the Administrative Agent and the Lenders and (ii) appoint a committee of the board of directors of the Company to consist of three board members (two of whom will be the new independent directors), and as of the date of this filing, we have satisfied such requirements. The committee’s responsibilities will include, among other things, to explore, consider, solicit expressions of interest or proposals for, respond to any communications, inquiries or proposals regarding, and advise as to all strategic alternatives to effect a “Specified Liquidity Transaction” (as defined in the Credit Agreement). There can be no guarantee or assurances that any such transaction or transactions be consummated. We must pay (i) a fee of 0.50% of the outstanding principal amount of the commitments under the Credit Agreement March 2023 amendment (as defined in the Credit Agreement) on the closing date (in lieu of the deferred fee previously contemplated in connection with the March 2023 amendment (as defined in the Credit Agreement)) and (ii) a fee of 1.00% of the outstanding principal amount of the commitments under the Credit Agreement as of the closing date on the earlier to occur of September 2, 2024 and an Event of Default (as defined in the Credit Agreement). On July 28, 2023, we amended our Term Loan to (i) extend the maturity date of the Term Loan Agreement to April 7, 2025, (ii) allow for interest to be paid in kind until September 2, 2024, (iii) amend the 1.50% anniversary fee to recur on June 7 of each year that the Term Loan Agreement remains outstanding, with 2024 fee deferred to the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement) and (iv) amend certain negative covenants and affirmative and add certain additional covenants. We must pay a fee of $50,000 to the lenders under the Term Loan Agreement on the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement). Operational restructuring plans We have implemented a significant cost reduction program designed to streamline our operations, maximize productivity and drive profitability. We have taken steps to significantly reduce our workforce, eliminated duplicate administrative headcounts at all levels, implemented improved system development processes to reduce maintenance costs, reduced capital expenditures, and evaluated operating contractual obligations for cost savings. We have achieved meaningful cost savings from this program of approximately $17,000 d uring the second half of the year ended April 29, 2023. These initiatives are expected to provide annualized savings of $30,000 to $35,000 in Fiscal 2024. Management's plans over the next twelve months include the further reduction of gross capital expenditures and other cost saving measures of approximately $25,000. Management believes that these plans are within its control and probable of being implemented on a timely basis. During the 13 weeks ended July 29, 2023, Net Loss from Continuing Operations decreased by $351 compared to the prior year period. During the 13 weeks ended July 29, 2023, Net Loss from Continuing Operations, excluding interest expense and restructuring and other charges, improved by $8,995 primarily due to operational improvements and cost savings initiatives. As discussed below, our first quarter is generally a low sales period, as the majority of sales and operating profit will be realized during the second and third quarters. Management believes that the expected impact on our liquidity and cash flows resulting from the debt amendments and the operational initiatives outlined above are sufficient to enable the Company to meet its obligations for at least twelve months from the issuance date of these condensed consolidated financial statements and to continue to alleviate the conditions that initially raised substantial doubt about the Company's ability to continue as a going concern. Seasonality Our business is highly seasonal. Our quarterly results also may fluctuate depending on the timing of the start of the various schools' semesters, as well as shifts in our fiscal calendar dates. These shifts in timing may affect the comparability of our results across periods. Our retail business is highly seasonal, with the major portion of sales and operating profit realized during the second and third fiscal quarters, when college students generally purchase and rent textbooks for the upcoming semesters. Sales attributable to our wholesale business are generally highest in our first, second and third quarters, as it sells textbooks and other course materials for retail distribution. See Revenue Recognition and Deferred Revenue discussion below. Use of Estimates In preparing financial statements in conformity with GAAP, we are required to make estimates and assumptions that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Discontinued Operations During the fourth quarter of Fiscal 2023, assets related to our Digital Student Solutions ("DSS") Segment met the criteria for classification as Assets Held for Sale and Discontinued Operations and is no longer a reportable segment. Certain assets and liabilities associated with the DSS Segment are presented in our condensed consolidated balance sheets as "Assets Held for Sale" and "Liabilities Held for Sale". The results of operations related to the DSS Segment are included in the condensed consolidated statements of operations as "Loss from discontinued operations, net of tax." The cash flows of the DSS Segment are also presented separately in our condensed consolidated statements of cash flows. All corresponding prior year periods presented in our financial statements and related information in the accompanying notes have been reclassified to reflect the Asset Held for Sale and Discontinued Operations presentation. On May 31, 2023, we completed the sale of these assets related to our DSS Segment for cash proceeds of $20,000, net of certain transaction fees, severance costs, escrow, and other considerations. During the 13 weeks ended July 29, 2023, we recorded a Gain on Sale of Business of $3,068 in Net Loss from Discontinued Operations related to the sale. Net cash proceeds from the sale were used for debt repayment and provided additional funds for working capital needs under our Credit Facility. The following table summarizes the operating results of the discontinued operations for the periods indicated: 13 weeks ended Dollars in thousands July 29, 2023 July 30, 2022 Total sales $ 2,784 $ 9,184 Cost of sales (a) 76 1,700 Gross profit (a) 2,708 7,484 Selling and administrative expenses 2,281 8,146 Depreciation and amortization — 1,637 Gain on sale of business (3,068) — Impairment loss (non-cash) (b) 610 — Restructuring costs (c) 3,287 — Transaction costs (5) — Operating loss (397) (2,299) Income tax expense 20 86 Loss from discontinued operations, net of tax $ (417) $ (2,385) (a) Cost of sales and Gross margin for the DSS Segment includes amortization expense (non-cash) related to content development costs of $0 and $1,551 for the 13 weeks ended July 29, 2023 and July 30, 2022, respectively. (b) During the 13 weeks ended July 29, 2023, we recognized an impairment loss (non-cash) of $610 (both pre-tax and after-tax), comprised of $119 and $491 of property and equipment and operating lease right-of-use assets, respectively, on the condensed consolidated statement of operations as part of discontinued operations. (c) During the 13 weeks ended July 29, 2023, we recognized restructuring and other charges of $3,287 comprised of severance and other employee termination costs. The following table summarizes the assets and liabilities of the Assets Held for Sale included in the condensed consolidated balance sheets: As of April 29, 2023 July 30, 2022 Cash and cash equivalents $ 1,057 $ 633 Receivables, net 480 649 Prepaid expenses and other current assets 901 2,043 Property and equipment, net 19,523 20,904 Intangible assets, net 402 1,230 Goodwill 4,700 4,700 Deferred tax assets, net 130 — Other noncurrent assets 237 266 Assets held for sale $ 27,430 $ 30,425 Accounts payable $ 211 $ 216 Accrued liabilities 8,212 5,235 Other long-term liabilities — 31 Liabilities held for sale $ 8,423 $ 5,482 Restricted Cash As of July 29, 2023 and July 30, 2022, we had restricted cash of $11,637 and $7,492, respectively, comprised of $10,704 and $6,593, respectively, in prepaid and other current assets in the condensed consolidated balance sheet related to segregated funds for commission due to Lids for logo merchandise sales as per the Lids Partnership's merchandising agreement, and $933 and $899, respectively, in other noncurrent assets in the condensed consolidated balance sheet related to amounts held in trust for future distributions related to employee benefit plans. Merchandise Inventories Merchandise inventories, which consist of finished goods, are stated at the lower of cost or market. Market value of our inventory, which is all purchased finished goods, is determined based on its estimated net realizable value, which is generally the selling price less normally predictable costs of disposal and transportation. Reserves for non-returnable inventory are based on our history of liquidating non-returnable inventory, which includes certain significant assumptions, including markdowns, sales below cost, inventory aging and expected demand. Cost is determined primarily by the retail inventory method for our Retail segment. Our textbook and trade book inventories, for Retail and Wholesale, are valued using the LIFO method and the related reserve was not material to the recorded amount of our inventories. There were no LIFO adjustments in Fiscal 2023, Fiscal 2022 and Fiscal 2021. For our physical bookstores, we also estimate and accrue shortage for the period between the last physical count of inventory and the balance sheet date. Shortage rates are estimated and accrued based on historical rates and can be affected by changes in merchandise mix and changes in actual shortage trends. The Retail Segment fulfillment order is directed first to our wholesale business before other sources of inventory are utilized. The products that we sell originate from a wide variety of domestic and international vendors. After internal sourcing, the bookstore purchases textbooks from outside suppliers and publishers. Textbook Rental Inventories Physical textbooks out on rent are categorized as textbook rental inventories. At the time a rental transaction is consummated, the book is removed from merchandise inventories and moved to textbook rental inventories at cost. The cost of the book is amortized down to its estimated residual value over the rental period. The related amortization expense is included in cost of goods sold. At the end of the rental period, upon return, the book is removed from textbook rental inventories and recorded in merchandise inventories at its amortized cost. Leases We recognize lease assets and lease liabilities on the condensed consolidated balance sheet for all operating lease arrangements based on the present value of future lease payments as required by Accounting Standards Codification ("ASC") Topic 842, Leases . We do not recognize lease assets or lease liabilities for short-term leases (i.e., those with a term of twelve months or less). We recognize lease expense on a straight-line basis over the lease term for contracts with fixed lease payments, including those with fixed annual minimums, or over a rolling twelve-month period for leases where the annual guarantee resets at the start of each contract year, in order to best reflect the pattern of usage of the underlying leased asset. For additional information, see Note 8. Leases . Revenue Recognition and Deferred Revenue Product sales and rentals The majority of our revenue is derived from the sale of products through our bookstore locations, including virtual bookstores, and our bookstore affiliated e-commerce websites, and contains a single performance obligation. Revenue from sales of our products is recognized at the point in time when control of the products is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for the products. For additional information, see Note 3. Revenue. Retail product revenue is recognized when the customer takes physical possession of our products, which occurs either at the point of sale for products purchased at physical locations or upon receipt of our products by our customers for products ordered through our websites and virtual bookstores. Wholesale product revenue is recognized upon shipment of physical textbooks at which point title passes and risk of loss is transferred to the customer. Additional revenue is recognized for shipping charges billed to customers and shipping costs are accounted for as fulfillment costs within cost of goods sold. Revenue from the sale of digital textbooks, which contains a single performance obligation, is recognized at the point of sale as product revenue in our condensed consolidated financial statements. A software feature is embedded within the content of our digital textbooks, such that upon expiration of the term the customer is no longer able to access the content. While the sale of the digital textbook allows the customer to access digital content for a fixed period of time, once the digital content is delivered to the customer, our performance obligation is complete. Revenue from the rental of physical textbooks is deferred and recognized over the rental period based on the passage of time commencing at the point of sale, when control of the product transfers to the customer and is recognized as rental income in our condensed consolidated financial statements. Rental periods are typically for a single semester and are always less than one year in duration. We offer a buyout option to allow the purchase of a rented physical textbook at the end of the rental period if the customer desires to do so. We record the buyout purchase when the customer exercises and pays the buyout option price which is determined at the time of the buyout. In these instances, we accelerate any remaining deferred rental revenue at the point of sale. Revenue for our BNC First Day offerings are recognized consistent with our policies outlined above for product, digital and rental sales, net of an anticipated opt-out or return provision. Given the growth of BNC First Day programs, the timing of cash collection from our school partners may shift to periods subsequent to when the revenue is recognized. When a school adopts our BNC First Day equitable and inclusive access offerings, cash collection from the school generally occurs after the institution's drop/add dates, which is later in the working capital cycle, particularly in our third quarter given the timing of the Spring Term and our quarterly reporting period, as compared to direct-to-student point-of-sale transactions where cash is generally collected during the point-of-sale transaction or within a few days from the credit card processor. We estimate returns based on an analysis of historical experience. A provision for anticipated merchandise returns is provided through a reduction of sales and cost of goods sold in the period that the related sales are recorded. For sales and rentals involving third-party products, we evaluate whether we are acting as a principal or an agent. Our determination is based on our evaluation of whether we control the specified goods or services prior to transferring them to the customer. There are significant judgments involved in determining whether we control the specified goods or services prior to transferring them to the customer including whether we have the ability to direct the use of the good or service and obtain substantially all of the remaining benefits from the good or service. For those transactions where we are the principal, we record revenue on a gross basis, and for those transactions where we are an agent to a third-party, we record revenue on a net basis. Effective in April 2021, as contemplated by the F/L Partnership's merchandising agreement and e-commerce agreement, we began to transition the fulfillment of our logo general merchandise sales to Lids and Fanatics. The transition to Lids for campus stores was effective in April 2021, and the e-commerce websites transitioned to Fanatics throughout Fiscal 2022. As the logo general merchandise sales are fulfilled by Lids and Fanatics, we recognize commission revenue earned for these sales on a net basis in our condensed consolidated financial statements, as compared to the recognition of logo general merchandise sales on a gross basis in the periods prior to the transition. We do not have gift card or customer loyalty programs. We do not treat any promotional offers as expenses. Sales tax collected from our customers is excluded from reported revenues. Our payment terms are generally 30 days and do not extend beyond one year. Service and other revenue Service and other revenue is primarily derived from partnership marketing services which includes promotional activities and advertisements within our physical bookstores and web properties performed on behalf of third-party customers, shipping and handling, and revenue from other programs. Partnership marketing agreements often include multiple performance obligations which are individually negotiated with our customers. For these arrangements that contain distinct performance obligations, we allocate the transaction price based on the relative standalone selling price method by comparing the standalone selling price (“SSP”) of each distinct performance obligation to the total value of the contract. The revenue is recognized as each performance obligation is satisfied, typically at a point in time for partnership marketing service and overtime for advertising efforts as measured based upon the passage of time for contracts that are based on a stated period of time or the number of impressions delivered for contracts with a fixed number of impressions. Cost of Sales Our cost of sales primarily includes costs such as merchandise costs, textbook rental amortization, content development cost amortization, warehouse costs related to inventory management and order fulfillment, insurance, certain payroll costs, and management service agreement costs, including rent expense, related to our college and university contracts and other facility related expenses. Selling and Administrative Expenses Our selling and administrative expenses consist primarily of store payroll and store operating expenses. Selling and administrative expenses also include long-term incentive plan compensation expense and general office expenses, such as merchandising, procurement, field support, finance and accounting. Shared-service costs such as human resources, legal, treasury, information technology, and various other corporate level expenses and other governance functions, are not allocated to any specific reporting segment and are recorded in Corporate Services. Income Taxes The provision for income taxes includes federal, state and local income taxes currently payable and those deferred because of temporary differences between the financial statement and tax basis of assets and liabilities. The deferred tax assets and liabilities are measured using the enacted tax rates and laws that are expected to be in effect when the differences reverse. We regularly review deferred tax assets for recoverability and establish a valuation allowance, if determined to be necessary. |
Revenue (Notes)
Revenue (Notes) | 3 Months Ended |
Jul. 29, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | Note 3. Revenue Revenue from sales of our products and services is recognized either at the point in time when control of the products is transferred to our customers or over time as services are provided in an amount that reflects the consideration we expect to be entitled to in exchange for the products or services. See Note 2. Summary of Significant Accounting Policies for additional information related to our revenue recognition policies and Note 4. Segment Reporting for a description of each segment's product and service offerings. Disaggregation of Revenue The following table disaggregates the revenue associated with our major product and service offerings: 13 weeks ended July 29, 2023 July 30, 2022 Retail Course Materials Product Sales $ 138,536 $ 127,493 General Merchandise Product Sales (a) 88,680 88,824 Service and Other Revenue (b) 6,733 9,278 Retail Product and Other Sales sub-total 233,949 225,595 Course Materials Rental Income 11,511 10,912 Retail Total Sales $ 245,460 $ 236,507 Wholesale Sales $ 38,791 $ 37,083 Eliminations (c) $ (20,090) $ (18,916) Total Sales $ 264,161 $ 254,674 (a) Logo general merchandise sales for the Retail Segment are recognized on a net basis as commission revenue in the condensed consolidated financial statements. (b) Service and other revenue primarily relates to brand partnerships and other service revenues. (c) The sales eliminations represent the elimination of Wholesale sales and fulfillment service fees to Retail and the elimination of Retail commissions earned from Wholesale. Contract Liabilities Contract liabilities represent an obligation to transfer goods or services to a customer for which we have received consideration and consists of our deferred revenue liability (deferred revenue). Deferred revenue consists of the following: • advanced payments from customers related to textbook rental performance obligations, which are recognized ratably over the terms of the related rental period; • unsatisfied performance obligations associated with partnership marketing services, which are recognized when the contracted services are provided to our partnership marketing customers; and • unsatisfied performance obligations associated with the premium paid for the sale of treasury shares, which are expected to be recognized over the term of the e-commerce and merchandising contracts for Fanatics and Lids, respectively . The following table presents changes in deferred revenue associated with our contract liabilities: 13 weeks ended July 29, 2023 July 30, 2022 Deferred revenue at the beginning of period $ 15,356 $ 16,475 Additions to deferred revenue during the period 12,856 17,502 Reductions to deferred revenue for revenue recognized during the period (12,444) (15,302) Deferred revenue balance at the end of period: $ 15,768 $ 18,675 Balance Sheet classification: Accrued liabilities $ 11,769 $ 14,120 Other long-term liabilities 3,999 4,555 Deferred revenue balance at the end of period: $ 15,768 $ 18,675 As of July 29, 2023, we expect to recognize $11,769 of the deferred revenue balance within the next 12 months. |
Segment Reporting (Notes)
Segment Reporting (Notes) | 3 Months Ended |
Jul. 29, 2023 | |
Segment Reporting | Note 4. Segment Reporting During the fourth quarter of Fiscal 2023, assets related to our DSS Segment met the criteria for classification as Assets Held for Sale and Discontinued Operations and is no longer a reportable segment. For additional information, see Note 2. Summary of Significant Accounting Policies. We have two reportable segments: Retail and Wholesale. Additionally, unallocated shared-service costs, which include various corporate level expenses and other governance functions, are not allocated to any specific reporting segment and continue to be presented as “Corporate Services”. We identify our segments in accordance with the way our business is managed (focusing on the financial information distributed) and the manner in which our chief operating decision maker allocates resources and assesses financial performance. The following summarizes the two segments. For additional information about each segment's operations, see Part I - Item 1. Business in our Annual Report on Form 10-K for the fiscal year ended April 29, 2023 . Retail Segment The Retail Segment operates 1,289 college, university, and K-12 school bookstores, comprised of 726 physical bookstores and 563 virtual bookstores. Our bookstores typically operate under agreements with the college, university, or K-12 schools to be the official bookstore and the exclusive seller of course materials and supplies, including physical and digital products. The majority of the physical campus bookstores have school-branded e-commerce websites which we operate independently or along with our merchant partners, and which offer students access to affordable course materials and affinity products, including emblematic apparel and gifts. The Retail Segment offers our BNC First Day ® equitable and inclusive access programs, consisting of First Day Complete and First Day , which provide faculty required course materials on or before the first day of class at a discounted rate, as compared to the total retail price for the same course materials if purchased separately. The BNC First Day discounted price is offered as a course fee or included in tuition. Additionally, the Retail Segment offers a suite of digital content and services to colleges and universities, including a variety of open educational resource-based courseware. Wholesale Segment The Wholesale Segment is comprised of our wholesale textbook business and is one of the largest textbook wholesalers in the country. The Wholesale Segment centrally sources, sells, and distributes new and used textbooks to approximately 2,900 physical bookstores (including our Retail Segment's 726 physical bookstores) and sources and distributes new and used textbooks to our 563 virtual bookstores. Additionally, the Wholesale Segment sells hardware and a software suite of applications that provides inventory management and point-of-sale solutions to approximately 330 college bookstores. Corporate Services represents unallocated shared-service costs which include corporate level expenses and other governance functions, including executive functions, such as accounting, legal, treasury, information technology, and human resources. Intercompany Eliminations The eliminations are primarily related to the following intercompany activities: • The sales eliminations represent the elimination of Wholesale sales and fulfillment service fees to Retail and the elimination of Retail commissions earned from Wholesale, and • These cost of sales eliminations represent (i) the recognition of intercompany profit for Retail inventory that was purchased from Wholesale in a prior period that was subsequently sold to external customers during the current period and the elimination of Wholesale service fees charged for fulfillment of inventory for virtual store sales, net of (ii) the elimination of intercompany profit for Wholesale inventory purchases by Retail that remain in ending inventory at the end of the current period. Our international operations are not material, and the majority of the revenue and total assets are within the United States. Summarized financial information for our reportable segments is reported below: 13 weeks ended July 29, 2023 July 30, 2022 Sales Retail $ 245,460 $ 236,507 Wholesale 38,791 37,083 Eliminations (20,090) (18,916) Total Sales $ 264,161 $ 254,674 Gross Profit Retail $ 50,291 $ 53,993 Wholesale 5,794 6,899 Eliminations (5,451) (4,887) Total Gross Profit $ 50,634 $ 56,005 Selling and Administrative Expenses Retail $ 69,173 $ 79,004 Wholesale 3,388 4,131 Corporate Services 4,918 7,214 Eliminations (3) (8) Total Selling and Administrative Expenses $ 77,476 $ 90,341 Depreciation and Amortization Retail $ 8,966 $ 9,529 Wholesale 1,277 1,349 Corporate Services 10 18 Total Depreciation and Amortization $ 10,253 $ 10,896 Restructuring and Other Charges Retail $ 526 $ — Wholesale 526 — Corporate Services 3,581 375 Total Restructuring and Other Charges $ 4,633 $ 375 Operating Loss Retail $ (28,374) $ (34,540) Wholesale 603 1,419 Corporate Services (8,509) (7,607) Elimination (5,448) (4,879) Total Operating Loss $ (41,728) $ (45,607) 13 weeks ended Reconciliation of segment Operating Loss from Continuing Operations to Loss from Continuing Operations Before Income Taxes: July 29, 2023 July 30, 2022 Total Operating Loss $ (41,728) $ (45,607) Interest Expense, net 8,254 3,868 Total Loss from Continuing Operations Before Income Taxes $ (49,982) $ (49,475) |
Equity and Earnings Per Share (
Equity and Earnings Per Share (Notes) | 3 Months Ended |
Jul. 29, 2023 | |
Net Earnings (Loss) Per Share | Note 5. Equity and Earnings Per Share Equity Share Repurchases During the 13 weeks ended July 29, 2023, we did not repurchase shares of our Common Stock under the stock repurchase program and as of July 29, 2023, approximately $26,669 remains available under the stock repurchase program. During the 13 weeks ended July 29, 2023, we repurchased 77,898 shares of our Common Stock outside of the stock repurchase program in connection with employee tax withholding obligations for vested stock awards. Earnings Per Share Basic EPS is computed based upon the weighted average number of common shares outstanding for the year. Diluted EPS is computed based upon the weighted average number of common shares outstanding for the year plus the dilutive effect of common stock equivalents using the treasury stock method and the average market price of our common stock for the year. We include participating securities (unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents) in the computation of EPS pursuant to the two-class method. Our participating securities consist solely of unvested restricted stock awards, which have contractual participation rights equivalent to those of stockholders of unrestricted common stock. The two-class method of computing earnings per share is an allocation method that calculates earnings per share for common stock and participating securities. During periods of net loss, no effect is given to the participating securities because they do not share in the losses of the Company. During the 13 weeks ended July 29, 2023 and July 30, 2022, average shares of 3,698,357 and 4,722,668 were excluded from the diluted earnings per share calculation as their inclusion would have been antidilutive, respectively. The following is a reconciliation of the basic and diluted earnings per share calculation: 13 weeks ended (shares in thousands) July 29, 2023 July 30, 2022 Numerator for basic and diluted earnings per share: Loss from continuing operations, net of tax $ (49,971) $ (50,322) Loss from discontinued operations, net of tax (417) (2,385) Net loss available to common shareholders $ (50,388) $ (52,707) Denominator for basic and diluted earnings per share: Basic and diluted weighted average shares of Common Stock 52,642 52,172 Loss per share of Common Stock: Basic and Diluted Continuing operations $ (0.95) $ (0.96) Discontinued operations (0.01) (0.05) Basic and diluted loss per share of Common Stock $ (0.96) $ (1.01) |
Fair Values of Financial Instru
Fair Values of Financial Instruments (Notes) | 3 Months Ended |
Jul. 29, 2023 | |
Fair Value Disclosures | Note 6. Fair Value Measurements In accordance with ASC No. 820, Fair Value Measurements and Disclosures , the fair value of an asset is considered to be the price at which the asset could be sold in an orderly transaction between unrelated knowledgeable and willing parties. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. Assets and liabilities recorded at fair value are measured using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1—Observable inputs that reflect quoted prices in active markets Level 2—Inputs other than quoted prices in active markets that are either directly or indirectly observable Level 3—Unobservable inputs in which little or no market data exists, therefore requiring us to develop our own assumptions Our financial instruments include cash and cash equivalents, receivables, accrued liabilities and accounts payable. The fair values of cash and cash equivalents, receivables, accrued liabilities and accounts payable approximates their carrying values because of the short-term nature of these instruments, which are all considered Level 1. The fair value of short-term and long-term debt approximates its carrying value. Non-Financial Assets and Liabilities Our non-financial assets include property and equipment, operating lease right-of-use assets, and intangible assets. Such assets are reported at their carrying values and are not subject to recurring fair value measurements. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with ASC 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets . Other Non-Financial Liabilities We granted phantom share units as long-term incentive awards which are settled in cash based on the fair market value of a share of common stock of the Company at each vesting date. The fair value of the liability for the cash-settled phantom share unit awards will be remeasured at the end of each reporting period through settlement to reflect current risk-free rate and volatility assumptions. As of July 29, 2023, we recorded a liability of $633 (Level 2 input) which is reflected in accrued liabilities ($595) and other long-term liabilities ($38) on the condensed consolidated balance sheet. As of July 30, 2022, we recorded a liability of $2,976 (Level 2 input) which is reflected in accrued liabilities ($1,810) and other long-term liabilities ($1,166) on the condensed consolidated balance sheet. For additional information, see Note 10. Long-Term Incentive Plan Compensation Expense . |
Debt (Notes)
Debt (Notes) | 3 Months Ended |
Jul. 29, 2023 | |
Debt Disclosure | Note 7. Debt As of July 29, 2023 July 30, 2022 Credit Facility $ 249,735 $ 190,300 FILO Facility — 40,000 Term Loan 30,000 30,000 sub-total 279,735 260,300 Less: Deferred financing costs (2,072) (1,750) Total debt $ 277,663 $ 258,550 Balance Sheet classification: Short-term borrowings $ — $ 40,000 Long-term borrowings 277,663 218,550 Total debt $ 277,663 $ 258,550 Credit Facility We have a credit agreement (the “Credit Agreement”), amended from time to time including on July 28,2023, May 24, 2023, March 8, 2023, March 31, 2021 and March 1, 2019, under which the lenders originally committed to provide us with a 5 year asset-backed revolving credit facility in an aggregate committed principal amount of $400,000 (the “Credit Facility”) effective from the March 1, 2019 amendment. We had the option to request an increase in commitments under the Credit Facility of up to $100,000, subject to certain restrictions. Proceeds from the Credit Facility are used for general corporate purposes, including seasonal working capital needs. The agreement included an incremental first in, last out seasonal loan facility (the “FILO Facility”) for a $100,000 maintaining the maximum availability under the Credit Agreement at $500,000. As of July 31, 2022, the FILO Facility was repaid and eliminated according to its terms and future commitments under the FILO Facility were reduced to $0. March 2023 Credit Agreement Amendment On March 8, 2023, we amended our existing Credit Agreement to (i) extend the maturity date of the Credit Agreement by six months to August 29, 2024, (ii) reduce the commitments under the Credit Agreement by $20,000 to $380,000, (iii) increase the applicable margin with respect to the interest rate under the Credit Agreement to 3.375% per annum, in the case of interest accruing based on a Secured Overnight Financing Rate, and 2.375%, in the case of interest accruing based on an alternative base rate, in each case, without regard to a pricing grid, (iv) reduce advance rates with respect to the borrowing base (x) by 500 basis points upon the achievement of certain liquidity events, which may include a sale of equity interests or of assets (a “Specified Event”), or, if such a Specified Event shall not have occurred, on May 31, 2023 (see discussion below) and (y) by an additional 500 basis points on September 29, 2023, (v) amend certain negative covenants and add certain additional covenants, (vi) amend the financial maintenance covenant to require Availability (as defined in the Credit Agreement) to be at all times greater than the greater of 10% of the Aggregate Loan Cap (as defined in the Credit Agreement) and $32,500 and (vii) require repayment of the loans under the Credit Agreement upon a Specified Event. For additional information related to the Credit Agreement amendment, see the Company’s Report on Form 8-K dated March 8, 2023 and filed with the SEC on March 9, 2023. As noted above, the amendment requires the achievement of a Special Event by no later than May 31, 2023 (as such date may be extended pursuant to the terms of the Credit Agreement). See Note 2. Summary of Significant Accounting Policies for information related to the sale of our DSS segment on May 31, 2023 . We paid a fee of 0.25% of the outstanding principal amount of the commitments under the Credit Agreement on the amendment closing date and we will pay an additional fee of 1.00% of the outstanding principal amount of the commitments under the Credit Agreement on September 29, 2023. During the 52 weeks ended April 29, 2023, we incurred debt issuance costs totaling $4,081 related to the March 2023 Credit Agreement amendment. The debt issuance costs have been deferred and are presented as prepaid and other current assets and other noncurrent assets in the condensed consolidated balance sheets, and subsequently amortized ratably over the term of the credit agreement. May 2023 Credit Agreement Amendment On May 24, 2023, we amended our existing Credit Agreement to (i) increase the applicable margin with respect to the interest rate under the Credit Agreement to 3.75% per annum, in the case of interest accruing based on SOFR, and 2.75%, in the case of interest accruing based on an alternative base rate, in each case, without regard to a pricing grid, (ii) defer the reduction of advance rates used to calculate our borrowing capacity by an amount equal to 500 basis points previously required on May 31, 2023 to September 1, 2023, (iii) require cash flow reporting and variance testing commencing June 3, 2023 and (iv) defer partial prepayment of the term loan from the DSS segment sale proceeds to September 1, 2023. We did not incur debt issuance costs related to the May 2023 Credit Agreement amendment. For additional information related to the Credit Agreement amendment, see the Company’s Report on Form 8-K dated May 24, 2023 and filed with the SEC on May 31, 2023. July 2023 Credit Agreement Amendment On July 28, 2023, we amended our existing Credit Agreement to (i) extend the maturity date of the Credit Agreement to December 28, 2024, (ii) reduce advance rates with respect to the borrowing base by 1000 basis points on September 2, 2024 (in lieu of the reductions previously contemplated for September 2023), (iii) subject to the conditions set forth in such amendment, add a CARES Act tax refund claim to the borrowing base, from April 1, 2024 through July 31, 2024, (iv) amend the financial maintenance covenant to require Availability (as defined in the Credit Agreement) at all times greater than the greater of (x) 10% of the Aggregate Loan Cap (as defined in the Credit Agreement) and (y) (A) $32,500 minus, subject to the conditions set forth in such amendment, (B) (a) $7,500 for the period of April 1, 2024 through and including April 30, 2024, (b) $2,500 for the period of May 1, 2024 through and including May 31, 2024 and (c) $0 at all other times, (v) add a minimum Consolidated EBITDA (as defined in the Credit Agreement) financial maintenance covenant, and (vi) amend certain negative and affirmative covenants and add certain additional covenants, all as more particularly set forth in such amendment. The amendment also requires that we appoint a Chief Restructuring Officer and that, by August 11, 2023, we (i) appoint two independent members to the board of directors of the Company from prospective candidates that have been previously disclosed to the Administrative Agent and the Lenders and (ii) appoint a committee of the board of directors of the Company to consist of three board members (two of whom will be the new independent directors). The committee’s responsibilities will include, among other things, to explore, consider, solicit expressions of interest or proposals for, respond to any communications, inquiries or proposals regarding, and advise as to all strategic alternatives to effect a “Specified Liquidity Transaction” (as defined in the Credit Agreement). There can be no guarantee or assurances that any such transaction or transactions be consummated. We must pay (i) a fee of 0.50% of the outstanding principal amount of the commitments under the Credit Agreement March 2023 amendment (as defined in the Credit Agreement) on the closing date (in lieu of the deferred fee previously contemplated in connection with the March 2023 amendment (as defined in the Credit Agreement)) and (ii) a fee of 1.00% of the outstanding principal amount of the commitments under the Credit Agreement as of the closing date on the earlier to occur of September 2, 2024 and an Event of Default (as defined in the Credit Agreement). During the 13 weeks ended July 29, 2023, we incurred debt issuance costs totaling $10,979 related to the July 2023 Credit Agreement amendment. The debt issuance costs have been deferred and are presented as prepaid and other current assets and other noncurrent assets in the condensed consolidated balance sheets, and subsequently amortized ratably over the term of the credit agreement. As of July 29, 2023, and through the date of this filing, we were in compliance with all debt covenants under the Credit Agreement. The Credit Facility is secured by substantially all of the inventory, accounts receivable and related assets of the borrowers under the Credit Facility. This is considered an all asset lien (inclusive of proceeds from tax refunds payable to the Company and a pledge of equity from subsidiaries, exclusive of real estate). During the 13 weeks ended July 29, 2023, we borrowed $145,187 and repaid $49,606 under the Credit Agreement, and had outstanding borrowings of $249,735 as of July 29, 2023, comprised entirely of borrowings under the Credit Facility. During the 13 weeks ended July 30, 2022, we borrowed $117,200 and repaid $112,600 under the Credit Agreement, and had outstanding borrowings of $230,300 as of July 30, 2022, comprised $190,300 and $40,000 of borrowings under the Credit Facility and FILO Facility, respectively. As of July 29, 2023 and July 30, 2022, we have issued $575 and $4,759, respectively, in letters of credit under the Credit Facility. Term Loan On June 7, 2022, we entered into a Term Loan Credit Agreement (the “Term Loan Credit Agreement”) with TopLids LendCo, LLC and Vital Fundco, LLC and we entered into an amendment to our existing Credit Agreement, which permitted us to incur the Term Loan Facility (as defined below). For additional information, see the Company’s Report on Form 8-K dated June 7, 2022 and filed with the SEC on June 10, 2022. The Term Loan Credit Agreement provides for term loans in an amount equal to $30,000 (the “Term Loan Facility” and, the loans thereunder, the “Term Loans”) and matures on June 7, 2024. The proceeds of the Term Loans are being used to finance working capital, and to pay fees and expenses related to the Term Loan Facility. During the 13 weeks ended July 29, 2023, we borrowed $0 and repaid $0 under the Term Loan Credit Agreement, with $30,000 of outstanding borrowings as of July 29, 2023. During the 13 weeks ended July 30, 2022, we borrowed $30,000 and repaid $0 under the Term Loan Credit Agreement. March 2023 Term Loan Credit Agreement Amendment On March 8, 2023, we amended the Term Loan Credit Agreement to (i) extend the maturity date of the Term Loan Credit Agreement by six months to December 7, 2024, (ii) permit the application of certain proceeds to the repayment of the loans under Credit Agreement and (iii) amend certain negative covenants and add certain additional covenants to conform to the Credit Agreement. In addition, the amendment requires the achievement of a Specified Event (as described above) by no later than May 31, 2023 (as such date may be extended under the Credit Agreement, but no later than August 31, 2023 without consent from lenders under the Term Loan Credit Agreement). During the 52 weeks ended April 29, 2023, we incurred debt issuance costs totaling $431 related to the March 2023 Term Loan Credit Agreement amendment. We paid a fee of $50 on the amendment closing date to the lenders under the Term Loan Credit Agreement. The debt issuance costs have been deferred and are presented as prepaid and other current assets and other noncurrent assets in the condensed consolidated balance sheets, and subsequently amortized ratably over the term of the credit agreement. July 2023 Term Loan Credit Agreement Amendment On July 28, 2023, we amended our Term Loan to (i) extend the maturity date of the Term Loan Agreement to April 7, 2025, (ii) allow for interest to be paid in kind until September 2, 2024, (iii) amend the 1.50% anniversary fee to recur on June 7 of each year that the Term Loan Agreement remains outstanding, with 2024 fee deferred to the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement) and (iv) amend certain negative covenants and affirmative and add certain additional covenants. We must pay a fee of $50 to the lenders under the Term Loan Agreement on the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement). During the 13 weeks ended July 29, 2023, we incurred debt issuance costs totaling $369 related to the July 2023 Term Loan Credit Agreement amendment. The debt issuance costs have been deferred and are presented as a reduction to long-term borrowings in the condensed consolidated balance sheets, and subsequently amortized ratably over the term of the Term Loan Facility. The Term Loans accrue interest at a rate equal to 11.25%, payable quarterly. To date, all interest on the term loan has been paid in cash. The Term Loans do not amortize prior to maturity. The Term Loan Credit Agreement does not contain a financial covenant, but otherwise contains representations and warranties, covenants and events of default that are substantially the same as those in the Credit Agreement, including restrictions on the ability of the Company and its subsidiaries to incur additional debt, incur or permit liens on assets, make investments and acquisitions, consolidate or merge with any other company, engage in asset sales and make dividends and distributions. The Term Loan Facility is secured by second-priority liens on all assets securing the obligations under the Credit Agreement, which is all of the assets of the Company and the Guarantors, subject to customary exclusions and limitations set forth in the Term Loan Credit Agreement and the other loan documents executed in connection therewith. The Credit Agreement amendment permitted us to incur the Term Loan Facility and also provides that, upon repayment of the Term Loan Credit Agreement (and, if applicable, any replacement credit facility thereof), we may incur second lien secured debt in an aggregate principal amount not to exceed $75,000. |
Leases (Notes)
Leases (Notes) | 3 Months Ended |
Jul. 29, 2023 | |
Leases [Abstract] | |
Lessee, Operating Leases | Note 8. Leases We recognize lease assets and lease liabilities on the condensed consolidated balance sheets for substantially all lease arrangements as required by FASB ASC 842, Leases (Topic 842). Our portfolio of leases consists of operating leases comprised of operations agreements which grant us the right to operate on-campus bookstores at colleges and universities; real estate leases for office and warehouse operations; and vehicle leases. We do not have finance leases or short-term leases (i.e., those with a term of twelve months or less). We recognize a right of use ("ROU") asset and lease liability in our condensed consolidated balance sheets for leases with a term greater than twelve months. Options to extend or terminate a lease are included in the determination of the ROU asset and lease liability when it is reasonably certain that such options will be exercised. Our lease terms generally range from one year to fifteen years and a number of agreements contain minimum annual guarantees, many of which are adjusted at the start of each contract year based on the actual sales activity of the leased premises for the most recently completed contract year. Payment terms are based on the fixed rates explicit in the lease, including minimum annual guarantees, and/or variable rates based on: i) a percentage of revenues or sales arising at the relevant premises ("variable commissions"), and/or ii) operating expenses, such as common area charges, real estate taxes and insurance. For contracts with fixed lease payments, including those with minimum annual guarantees, we recognize lease expense on a straight-line basis over the lease term or over the contract year in order to best reflect the pattern of usage of the underlying leased asset and our minimum obligations arising from these types of leases. Our lease agreements do not contain any material residual value guarantees, material restrictions or covenants. We used our incremental borrowing rates to determine the present value of fixed lease payments based on the information available at the lease commencement date, as the rate implicit in the lease is not readily determinable. We utilized an estimated collateralized incremental borrowing rate as of the effective date or the commencement date of the lease, whichever is later. The following table summarizes lease expense: 13 weeks ended July 29, 2023 July 30, 2022 Variable lease expense $ 12,229 $ 15,183 Operating lease expense 22,389 22,862 Net lease expense $ 34,618 $ 38,045 The decrease in lease expense during the 13 weeks ended July 29, 2023 is primarily due to lower commission rates related to the shift to from physical to digital course materials and the impact of the timing due to contract renewals, partially offset by higher sales for contracts based on a percentage of sales. The following table summarizes our minimum fixed lease obligations, excluding variable commissions: As of July 29, 2023 Remainder of Fiscal 2024 $ 148,353 Fiscal 2025 53,542 Fiscal 2026 39,072 Fiscal 2027 31,399 Fiscal 2028 24,316 Thereafter 59,227 Total lease payments 355,909 Less: imputed interest (33,838) Operating lease liabilities at period end $ 322,071 Future lease payment obligations related to leases that were entered into, but did not commence as of July 29, 2023, were not material. The following summarizes additional information related to our operating leases: As of July 29, 2023 July 30, 2022 Weighted average remaining lease term (in years) 4.6 years 5.3 years Weighted average discount rate 4.1 % 4.2 % Supplemental cash flow information: Cash payments for lease liabilities within operating activities $ 22,804 $ 25,073 Right-of-use assets obtained in exchange for lease liabilities from initial recognition $ 59,304 $ 64,211 |
Supplementary Information (Note
Supplementary Information (Notes) | 3 Months Ended |
Jul. 29, 2023 | |
Supplementary info [Abstract] | |
Supplementary Information [Text Block] | Note 9. Supplementary Information Restructuring and other charges During the 13 weeks ended July 29, 2023, we recognized restructuring and other charges totaling $4,633 comprised primarily of $1,051 for severance and other employee termination and benefit costs associated with elimination of various positions as part of cost reduction objectives, ($1,007 is included in accrued liabilities in the condensed consolidated balance sheet as of July 29, 2023), and $3,582, respectively, for costs primarily associated with professional service costs for restructuring. |
Stock-Based Compensation Stock-
Stock-Based Compensation Stock-Based Compensation (Notes) | 3 Months Ended |
Jul. 29, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | Note 10. Long-Term Incentive Plan Compensation Expense During the 13 weeks ended July 29, 2023, we did not grant any long-term incentive plan awards. We recognized compensation expense for previously granted long-term incentive plan awards in selling and administrative expenses as follows: 13 weeks ended July 29, July 30, Stock-based awards Restricted stock expense $ 7 $ 94 Restricted stock units expense 568 866 Performance share units expense — 10 Stock option expense 382 606 Sub-total stock-based awards: $ 957 $ 1,576 Cash settled awards Phantom share units expense $ (89) $ 188 Total compensation expense for long-term incentive awards $ 868 $ 1,764 |
Income Taxes Income Taxes (Note
Income Taxes Income Taxes (Notes) | 3 Months Ended |
Jul. 29, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | Note 12. Income Taxes Our provision for income taxes during interim reporting periods has historically been calculated by applying an estimate of the annual effective tax rate for the full fiscal year to ordinary income (loss) (pre-tax income (loss) excluding unusual or infrequently occurring discrete items) for the reporting period. For the 13 weeks ended July 29, 2023, and in accordance with ASC 740-270-30-18 “ Income Taxes - Interim Reporting - Initial Measurement, ” and paragraph 82 of FASB interpretation No. 18, " Accounting for Income Taxes in Interim Periods " ("FIN 18"), we computed our provision for income taxes based on the actual effective tax rate for the year-to-date period by applying the discrete method. We determined that as small changes in estimated ordinary income would result in significant changes in the estimated annual effective tax rate, the historical method would not provide a reliable estimate for the 13 weeks ended July 29, 2023. We believe that, at this time, the use of this discrete method represents the best estimate of our annual effective tax rate. We recorded an income tax benefit of $(11) on pre-tax loss of $(49,982) during the 13 weeks ended July 29, 2023, which represented an effective income tax rate of 0% and an income tax expense of $847 on pre-tax loss of $(49,475) during the 13 weeks ended July 30, 2022, which represented an effective income tax rate of (1.7)%. The effective tax rate for the 13 weeks ended July 29, 2023 is lower than the prior year comparable period due to utilization of the discrete tax provision methodology discussed above. |
Legal Proceedings (Notes)
Legal Proceedings (Notes) | 3 Months Ended |
Jul. 29, 2023 | |
Legal Proceedings | Note 13. Legal Proceedings We are involved in a variety of claims, suits, investigations and proceedings that arise from time to time in the ordinary course of our business, including actions with respect to contracts, intellectual property, taxation, employment, benefits, personal injuries and other matters. The results of these proceedings in the ordinary course of business are not expected to have a material adverse effect on our condensed consolidated financial position, results of operations, or cash flows. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Jul. 29, 2023 | |
Basis of Presentation | Basis of Presentation and Consolidation Our condensed consolidated financial statements reflect our condensed consolidated financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States (“GAAP”). Net income (loss) is equal to comprehensive income (loss) on our condensed consolidated statement of operations. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements of the Company contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly its consolidated financial position and the results of its operations and cash flows for the periods reported. These consolidated financial statements are condensed and therefore do not include all of the information and footnotes required by GAAP. All material intercompany accounts and transactions have been eliminated in consolidation. Our fiscal year is comprised of 52 or 53 weeks, ending on the Saturday closest to the last day of April. Due to the seasonal nature of the business, the results of operations for the 13 weeks ended July 29, 2023 are not indicative of the results expected for the 52 weeks ending April 27, 2024 (Fiscal 2024). Liquidity and Going Concern The accompanying condensed consolidated financial statements are prepared in accordance with U.S. GAAP applicable to a going concern. This presentation contemplates the realization of assets and the satisfaction of liabilities in the normal course of business and does not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described below. Pursuant to ASC 205-40, Presentation of Financial Statements — Going Concern (“ASC 205-40”) , management must evaluate whether there are conditions and events, considered in aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that these condensed consolidated financial statements are issued. In accordance with ASC 205-40, management’s analysis can only include the potential mitigating impact of management’s plans that have not been fully implemented as of the issuance date of these condensed consolidated financial statements if (a) it is probable that management’s plans will be effectively implemented on a timely basis, and (b) it is probable that the plans, when implemented, will alleviate the relevant conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern. Our primary sources of cash are net cash flows from operating activities, funds available under our Credit Agreement, Term Loan Agreement, and short-term vendor financing. Our liquidity is highly dependent on the seasonal nature of our business, particularly with respect to course material sales, as sales are generally highest in the second and third fiscal quarters, when college students generally purchase textbooks for the upcoming Fall and Spring semesters, respectively. As of July 29, 2023, we had $19,294 of cash on hand, including $10,704 of restricted cash related to segregated funds for commission due to Fanatics for logo merchandise sales as per the merchandising partnership agreement. Our business was significantly negatively impacted by the COVID-19 pandemic during the years ended April 30, 2022 and May 1, 2021, as many schools adjusted their learning models and on-campus activities. Although most academic institutions have since reopened after the COVID-19 pandemic, the lingering impacts of the pandemic have resulted in changes in customer behaviors, lower enrollments, and an evolving educational landscape which continued to impact our financial results during the year ended April 29, 2023. Some institutions are still providing alternatives to traditional in-person instruction, including online and hybrid learning options and significantly reduced classroom sizes. The impact of COVID-19 store closings, as well as lower earnings during the year ended April 29, 2023, resulted in the loss of cash flows and increased borrowings that we would not otherwise have expected to incur. We incurred a Net Loss from Continuing Operations of $(49,971) and $(50,322) for the 13 weeks ended July 29, 2023 and July 30, 2022, respectively, and we incurred a Net Loss from Continuing Operations of $(90,140), $(61,559), and $(133,569) for the years ended April 29, 2023, April 30, 2022, and May 1, 2021, respectively. Our Cash Flow Used In Operating Activities from Continuing Operations were $(119,858) and $(28,607) for the 13 weeks ended July 29, 2023 and July 30, 2022, respectively, and were $90,513, $(16,195), and $27,049, for the years ended April 29, 2023, April 30, 2022, and May 1, 2021, respectively. The tightening of our available credit commitments, including the elimination and repayment of our seasonal borrowing facility (FILO Facility) of $40,000, has had a significant impact on our liquidity during the year ended April 29, 2023, including our ability to make timely vendor payments and school commission payments, resulting in a positive cash flow from operations offset by a use of cash for financing activities. Our losses and projected cash needs, combined with our current liquidity level, raised substantial doubt about our ability to continue as a going concern as of the year ended April 29, 2023, which Management subsequently remediated by implementing a plan to improve the Company’s liquidity and successfully alleviate substantial doubt including (1) raising additional liquidity an d (2) taking additional operational restructuring actions. Debt amendments On July 28, 2023, we amended our existing Credit Agreement to (i) extend the maturity date of the Credit Agreement to December 28, 2024, (ii) reduce advance rates with respect to the borrowing base by 1000 basis points on September 2, 2024 (in lieu of the reductions previously contemplated for September 2023), (iii) subject to the conditions set forth in such amendment, add a CARES Act tax refund claim to the borrowing base, from April 1, 2024 through July 31, 2024, (iv) amend the financial maintenance covenant to require Availability (as defined in the Credit Agreement) at all times greater than the greater of (x) 10% of the Aggregate Loan Cap (as defined in the Credit Agreement) and (y) (A) $32,500 minus, subject to the conditions set forth in such amendment, (B) (a) $7,500 for the period of April 1, 2024 through and including April 30, 2024, (b) $2,500 for the period of May 1, 2024 through and including May 31, 2024 and (c) $0 at all other times, (v) add a minimum Consolidated EBITDA (as defined in the Credit Agreement) financial maintenance covenant, and (vi) amend certain negative and affirmative covenants and add certain additional covenants, all as more particularly set forth in such amendment. The amendment also requires that we appoint a Chief Restructuring Officer and that, by August 11, 2023, we (i) appoint two independent members to the board of directors of the Company from prospective candidates that have been previously disclosed to the Administrative Agent and the Lenders and (ii) appoint a committee of the board of directors of the Company to consist of three board members (two of whom will be the new independent directors), and as of the date of this filing, we have satisfied such requirements. The committee’s responsibilities will include, among other things, to explore, consider, solicit expressions of interest or proposals for, respond to any communications, inquiries or proposals regarding, and advise as to all strategic alternatives to effect a “Specified Liquidity Transaction” (as defined in the Credit Agreement). There can be no guarantee or assurances that any such transaction or transactions be consummated. We must pay (i) a fee of 0.50% of the outstanding principal amount of the commitments under the Credit Agreement March 2023 amendment (as defined in the Credit Agreement) on the closing date (in lieu of the deferred fee previously contemplated in connection with the March 2023 amendment (as defined in the Credit Agreement)) and (ii) a fee of 1.00% of the outstanding principal amount of the commitments under the Credit Agreement as of the closing date on the earlier to occur of September 2, 2024 and an Event of Default (as defined in the Credit Agreement). On July 28, 2023, we amended our Term Loan to (i) extend the maturity date of the Term Loan Agreement to April 7, 2025, (ii) allow for interest to be paid in kind until September 2, 2024, (iii) amend the 1.50% anniversary fee to recur on June 7 of each year that the Term Loan Agreement remains outstanding, with 2024 fee deferred to the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement) and (iv) amend certain negative covenants and affirmative and add certain additional covenants. We must pay a fee of $50,000 to the lenders under the Term Loan Agreement on the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement). Operational restructuring plans We have implemented a significant cost reduction program designed to streamline our operations, maximize productivity and drive profitability. We have taken steps to significantly reduce our workforce, eliminated duplicate administrative headcounts at all levels, implemented improved system development processes to reduce maintenance costs, reduced capital expenditures, and evaluated operating contractual obligations for cost savings. We have achieved meaningful cost savings from this program of approximately $17,000 d uring the second half of the year ended April 29, 2023. These initiatives are expected to provide annualized savings of $30,000 to $35,000 in Fiscal 2024. Management's plans over the next twelve months include the further reduction of gross capital expenditures and other cost saving measures of approximately $25,000. Management believes that these plans are within its control and probable of being implemented on a timely basis. During the 13 weeks ended July 29, 2023, Net Loss from Continuing Operations decreased by $351 compared to the prior year period. During the 13 weeks ended July 29, 2023, Net Loss from Continuing Operations, excluding interest expense and restructuring and other charges, improved by $8,995 primarily due to operational improvements and cost savings initiatives. As discussed below, our first quarter is generally a low sales period, as the majority of sales and operating profit will be realized during the second and third quarters. Management believes that the expected impact on our liquidity and cash flows resulting from the debt amendments and the operational initiatives outlined above are sufficient to enable the Company to meet its obligations for at least twelve months from the issuance date of these condensed consolidated financial statements and to continue to alleviate the conditions that initially raised substantial doubt about the Company's ability to continue as a going concern. Seasonality Our business is highly seasonal. Our quarterly results also may fluctuate depending on the timing of the start of the various schools' semesters, as well as shifts in our fiscal calendar dates. These shifts in timing may affect the comparability of our results across periods. Our retail business is highly seasonal, with the major portion of sales and operating profit realized during the second and third fiscal quarters, when college students generally purchase and rent textbooks for the upcoming semesters. Sales attributable to our wholesale business are generally highest in our first, second and third quarters, as it sells textbooks and other course materials for retail distribution. See Revenue Recognition and Deferred Revenue discussion below. |
Use of Estimates | Use of Estimates In preparing financial statements in conformity with GAAP, we are required to make estimates and assumptions that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. |
Merchandise Inventories | Merchandise Inventories Merchandise inventories, which consist of finished goods, are stated at the lower of cost or market. Market value of our inventory, which is all purchased finished goods, is determined based on its estimated net realizable value, which is generally the selling price less normally predictable costs of disposal and transportation. Reserves for non-returnable inventory are based on our history of liquidating non-returnable inventory, which includes certain significant assumptions, including markdowns, sales below cost, inventory aging and expected demand. Cost is determined primarily by the retail inventory method for our Retail segment. Our textbook and trade book inventories, for Retail and Wholesale, are valued using the LIFO method and the related reserve was not material to the recorded amount of our inventories. There were no LIFO adjustments in Fiscal 2023, Fiscal 2022 and Fiscal 2021. For our physical bookstores, we also estimate and accrue shortage for the period between the last physical count of inventory and the balance sheet date. Shortage rates are estimated and accrued based on historical rates and can be affected by changes in merchandise mix and changes in actual shortage trends. The Retail Segment fulfillment order is directed first to our wholesale business before other sources of inventory are utilized. The products that we sell originate from a wide variety of domestic and international vendors. After internal sourcing, the bookstore purchases textbooks from outside suppliers and publishers. |
Textbook Rentals Inventories | Textbook Rental Inventories Physical textbooks out on rent are categorized as textbook rental inventories. At the time a rental transaction is consummated, the book is removed from merchandise inventories and moved to textbook rental inventories at cost. The cost of the book is amortized down to its estimated residual value over the rental period. The related amortization expense is included in cost of goods sold. At the end of the rental period, upon return, the book is removed from textbook rental inventories and recorded in merchandise inventories at its amortized cost. |
Revenue Recognition | Revenue Recognition and Deferred Revenue Product sales and rentals The majority of our revenue is derived from the sale of products through our bookstore locations, including virtual bookstores, and our bookstore affiliated e-commerce websites, and contains a single performance obligation. Revenue from sales of our products is recognized at the point in time when control of the products is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for the products. For additional information, see Note 3. Revenue. Retail product revenue is recognized when the customer takes physical possession of our products, which occurs either at the point of sale for products purchased at physical locations or upon receipt of our products by our customers for products ordered through our websites and virtual bookstores. Wholesale product revenue is recognized upon shipment of physical textbooks at which point title passes and risk of loss is transferred to the customer. Additional revenue is recognized for shipping charges billed to customers and shipping costs are accounted for as fulfillment costs within cost of goods sold. Revenue from the sale of digital textbooks, which contains a single performance obligation, is recognized at the point of sale as product revenue in our condensed consolidated financial statements. A software feature is embedded within the content of our digital textbooks, such that upon expiration of the term the customer is no longer able to access the content. While the sale of the digital textbook allows the customer to access digital content for a fixed period of time, once the digital content is delivered to the customer, our performance obligation is complete. Revenue from the rental of physical textbooks is deferred and recognized over the rental period based on the passage of time commencing at the point of sale, when control of the product transfers to the customer and is recognized as rental income in our condensed consolidated financial statements. Rental periods are typically for a single semester and are always less than one year in duration. We offer a buyout option to allow the purchase of a rented physical textbook at the end of the rental period if the customer desires to do so. We record the buyout purchase when the customer exercises and pays the buyout option price which is determined at the time of the buyout. In these instances, we accelerate any remaining deferred rental revenue at the point of sale. Revenue for our BNC First Day offerings are recognized consistent with our policies outlined above for product, digital and rental sales, net of an anticipated opt-out or return provision. Given the growth of BNC First Day programs, the timing of cash collection from our school partners may shift to periods subsequent to when the revenue is recognized. When a school adopts our BNC First Day equitable and inclusive access offerings, cash collection from the school generally occurs after the institution's drop/add dates, which is later in the working capital cycle, particularly in our third quarter given the timing of the Spring Term and our quarterly reporting period, as compared to direct-to-student point-of-sale transactions where cash is generally collected during the point-of-sale transaction or within a few days from the credit card processor. We estimate returns based on an analysis of historical experience. A provision for anticipated merchandise returns is provided through a reduction of sales and cost of goods sold in the period that the related sales are recorded. For sales and rentals involving third-party products, we evaluate whether we are acting as a principal or an agent. Our determination is based on our evaluation of whether we control the specified goods or services prior to transferring them to the customer. There are significant judgments involved in determining whether we control the specified goods or services prior to transferring them to the customer including whether we have the ability to direct the use of the good or service and obtain substantially all of the remaining benefits from the good or service. For those transactions where we are the principal, we record revenue on a gross basis, and for those transactions where we are an agent to a third-party, we record revenue on a net basis. Effective in April 2021, as contemplated by the F/L Partnership's merchandising agreement and e-commerce agreement, we began to transition the fulfillment of our logo general merchandise sales to Lids and Fanatics. The transition to Lids for campus stores was effective in April 2021, and the e-commerce websites transitioned to Fanatics throughout Fiscal 2022. As the logo general merchandise sales are fulfilled by Lids and Fanatics, we recognize commission revenue earned for these sales on a net basis in our condensed consolidated financial statements, as compared to the recognition of logo general merchandise sales on a gross basis in the periods prior to the transition. We do not have gift card or customer loyalty programs. We do not treat any promotional offers as expenses. Sales tax collected from our customers is excluded from reported revenues. Our payment terms are generally 30 days and do not extend beyond one year. Service and other revenue Service and other revenue is primarily derived from partnership marketing services which includes promotional activities and advertisements within our physical bookstores and web properties performed on behalf of third-party customers, shipping and handling, and revenue from other programs. Partnership marketing agreements often include multiple performance obligations which are individually negotiated with our customers. For these arrangements that contain distinct performance obligations, we allocate the transaction price based on the relative standalone selling price method by comparing the standalone selling price (“SSP”) of each distinct performance obligation to the total value of the contract. The revenue is recognized as each performance obligation is satisfied, typically at a point in time for partnership marketing service and overtime for advertising efforts as measured based upon the passage of time for contracts that are based on a stated period of time or the number of impressions delivered for contracts with a fixed number of impressions. |
Lessee, Leases [Policy Text Block] | We recognize lease assets and lease liabilities on the condensed consolidated balance sheets for substantially all lease arrangements as required by FASB ASC 842, Leases (Topic 842). Our portfolio of leases consists of operating leases comprised of operations agreements which grant us the right to operate on-campus bookstores at colleges and universities; real estate leases for office and warehouse operations; and vehicle leases. We do not have finance leases or short-term leases (i.e., those with a term of twelve months or less). We recognize a right of use ("ROU") asset and lease liability in our condensed consolidated balance sheets for leases with a term greater than twelve months. Options to extend or terminate a lease are included in the determination of the ROU asset and lease liability when it is reasonably certain that such options will be exercised. Our lease terms generally range from one year to fifteen years and a number of agreements contain minimum annual guarantees, many of which are adjusted at the start of each contract year based on the actual sales activity of the leased premises for the most recently completed contract year. Payment terms are based on the fixed rates explicit in the lease, including minimum annual guarantees, and/or variable rates based on: i) a percentage of revenues or sales arising at the relevant premises ("variable commissions"), and/or ii) operating expenses, such as common area charges, real estate taxes and insurance. For contracts with fixed lease payments, including those with minimum annual guarantees, we recognize lease expense on a straight-line basis over the lease term or over the contract year in order to best reflect the pattern of usage of the underlying leased asset and our minimum obligations arising from these types of leases. Our lease agreements do not contain any material residual value guarantees, material restrictions or covenants. We used our incremental borrowing rates to determine the present value of fixed lease payments based on the information available at the lease commencement date, as the rate implicit in the lease is not readily determinable. We utilized an estimated collateralized incremental borrowing rate as of the effective date or the commencement date of the lease, whichever is later. |
Cost of Sales, Policy [Policy Text Block] | Cost of Sales Our cost of sales primarily includes costs such as merchandise costs, textbook rental amortization, content development cost amortization, warehouse costs related to inventory management and order fulfillment, insurance, certain payroll costs, and management service agreement costs, including rent expense, related to our college and university contracts and other facility related expenses. |
Selling, General and Administrative Expenses, Policy [Policy Text Block] | Selling and Administrative Expenses Our selling and administrative expenses consist primarily of store payroll and store operating expenses. Selling and administrative expenses also include long-term incentive plan compensation expense and general office expenses, such as merchandising, procurement, field support, finance and accounting. Shared-service costs such as human resources, legal, treasury, information technology, and various other corporate level expenses and other governance functions, are not allocated to any specific reporting segment and are recorded in Corporate Services. |
Consolidation, Subsidiaries or Other Investments, Consolidated Entities, Policy [Policy Text Block] | Intercompany Eliminations The eliminations are primarily related to the following intercompany activities: • The sales eliminations represent the elimination of Wholesale sales and fulfillment service fees to Retail and the elimination of Retail commissions earned from Wholesale, and • These cost of sales eliminations represent (i) the recognition of intercompany profit for Retail inventory that was purchased from Wholesale in a prior period that was subsequently sold to external customers during the current period and the elimination of Wholesale service fees charged for fulfillment of inventory for virtual store sales, net of (ii) the elimination of intercompany profit for Wholesale inventory purchases by Retail that remain in ending inventory at the end of the current period. |
Fair Values of Financial Instruments | In accordance with ASC No. 820, Fair Value Measurements and Disclosures , the fair value of an asset is considered to be the price at which the asset could be sold in an orderly transaction between unrelated knowledgeable and willing parties. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. Assets and liabilities recorded at fair value are measured using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1—Observable inputs that reflect quoted prices in active markets Level 2—Inputs other than quoted prices in active markets that are either directly or indirectly observable Level 3—Unobservable inputs in which little or no market data exists, therefore requiring us to develop our own assumptions Our financial instruments include cash and cash equivalents, receivables, accrued liabilities and accounts payable. The fair values of cash and cash equivalents, receivables, accrued liabilities and accounts payable approximates their carrying values |
Net Earnings (Loss) Per Share | Earnings Per ShareBasic EPS is computed based upon the weighted average number of common shares outstanding for the year. Diluted EPS is computed based upon the weighted average number of common shares outstanding for the year plus the dilutive effect of common stock equivalents using the treasury stock method and the average market price of our common stock for the year. We include participating securities (unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents) in the computation of EPS pursuant to the two-class method. Our participating securities consist solely of unvested restricted stock awards, which have contractual participation rights equivalent to those of stockholders of unrestricted common stock. The two-class method of computing earnings per share is an allocation method that calculates earnings per share for common stock and participating securities. During periods of net loss, no effect is given to the participating securities because they do not share in the losses of the Company. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | During the 13 weeks ended July 29, 2023, we did not grant any long-term incentive plan awards. |
Income Tax, Policy [Policy Text Block] | Income Taxes The provision for income taxes includes federal, state and local income taxes currently payable and those deferred because of temporary differences between the financial statement and tax basis of assets and liabilities. The deferred tax assets and liabilities are measured using the enacted tax rates and laws that are expected to be in effect when the differences reverse. We regularly review deferred tax assets for recoverability and establish a valuation allowance, if determined to be necessary. |
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy | Restricted Cash As of July 29, 2023 and July 30, 2022, we had restricted cash of $11,637 and $7,492, respectively, comprised of $10,704 and $6,593, respectively, in prepaid and other current assets in the condensed consolidated balance sheet related to segregated funds for commission due to Lids for logo merchandise sales as per the Lids Partnership's merchandising agreement, and $933 and $899, respectively, in other noncurrent assets in the condensed consolidated balance sheet related to amounts held in trust for future distributions related to employee benefit plans. |
Compensation Related Costs, Sha
Compensation Related Costs, Share Based Payments (Policies) | 3 Months Ended |
Jul. 29, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | During the 13 weeks ended July 29, 2023, we did not grant any long-term incentive plan awards. |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Jul. 29, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Discontinued Operations Balance Sheet | The following table summarizes the assets and liabilities of the Assets Held for Sale included in the condensed consolidated balance sheets: As of April 29, 2023 July 30, 2022 Cash and cash equivalents $ 1,057 $ 633 Receivables, net 480 649 Prepaid expenses and other current assets 901 2,043 Property and equipment, net 19,523 20,904 Intangible assets, net 402 1,230 Goodwill 4,700 4,700 Deferred tax assets, net 130 — Other noncurrent assets 237 266 Assets held for sale $ 27,430 $ 30,425 Accounts payable $ 211 $ 216 Accrued liabilities 8,212 5,235 Other long-term liabilities — 31 Liabilities held for sale $ 8,423 $ 5,482 |
Schedule of Discontinued Operations Statement of Income | The following table summarizes the operating results of the discontinued operations for the periods indicated: 13 weeks ended Dollars in thousands July 29, 2023 July 30, 2022 Total sales $ 2,784 $ 9,184 Cost of sales (a) 76 1,700 Gross profit (a) 2,708 7,484 Selling and administrative expenses 2,281 8,146 Depreciation and amortization — 1,637 Gain on sale of business (3,068) — Impairment loss (non-cash) (b) 610 — Restructuring costs (c) 3,287 — Transaction costs (5) — Operating loss (397) (2,299) Income tax expense 20 86 Loss from discontinued operations, net of tax $ (417) $ (2,385) (a) Cost of sales and Gross margin for the DSS Segment includes amortization expense (non-cash) related to content development costs of $0 and $1,551 for the 13 weeks ended July 29, 2023 and July 30, 2022, respectively. (b) During the 13 weeks ended July 29, 2023, we recognized an impairment loss (non-cash) of $610 (both pre-tax and after-tax), comprised of $119 and $491 of property and equipment and operating lease right-of-use assets, respectively, on the condensed consolidated statement of operations as part of discontinued operations. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Jul. 29, 2023 | |
Disaggregation of Revenue [Line Items] | |
Disaggregation of Revenue [Table Text Block] | Disaggregation of Revenue The following table disaggregates the revenue associated with our major product and service offerings: 13 weeks ended July 29, 2023 July 30, 2022 Retail Course Materials Product Sales $ 138,536 $ 127,493 General Merchandise Product Sales (a) 88,680 88,824 Service and Other Revenue (b) 6,733 9,278 Retail Product and Other Sales sub-total 233,949 225,595 Course Materials Rental Income 11,511 10,912 Retail Total Sales $ 245,460 $ 236,507 Wholesale Sales $ 38,791 $ 37,083 Eliminations (c) $ (20,090) $ (18,916) Total Sales $ 264,161 $ 254,674 (a) Logo general merchandise sales for the Retail Segment are recognized on a net basis as commission revenue in the condensed consolidated financial statements. (b) Service and other revenue primarily relates to brand partnerships and other service revenues. (c) The sales eliminations represent the elimination of Wholesale sales and fulfillment service fees to Retail and the elimination of Retail commissions earned from Wholesale. |
Contract with Customer, Asset and Liability [Table Text Block] | The following table presents changes in deferred revenue associated with our contract liabilities: 13 weeks ended July 29, 2023 July 30, 2022 Deferred revenue at the beginning of period $ 15,356 $ 16,475 Additions to deferred revenue during the period 12,856 17,502 Reductions to deferred revenue for revenue recognized during the period (12,444) (15,302) Deferred revenue balance at the end of period: $ 15,768 $ 18,675 Balance Sheet classification: Accrued liabilities $ 11,769 $ 14,120 Other long-term liabilities 3,999 4,555 Deferred revenue balance at the end of period: $ 15,768 $ 18,675 |
Segment Reporting Segment Repor
Segment Reporting Segment Reporting (Tables) | 3 Months Ended |
Jul. 29, 2023 | |
Segment Reporting Information [Line Items] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Summarized financial information for our reportable segments is reported below: 13 weeks ended July 29, 2023 July 30, 2022 Sales Retail $ 245,460 $ 236,507 Wholesale 38,791 37,083 Eliminations (20,090) (18,916) Total Sales $ 264,161 $ 254,674 Gross Profit Retail $ 50,291 $ 53,993 Wholesale 5,794 6,899 Eliminations (5,451) (4,887) Total Gross Profit $ 50,634 $ 56,005 Selling and Administrative Expenses Retail $ 69,173 $ 79,004 Wholesale 3,388 4,131 Corporate Services 4,918 7,214 Eliminations (3) (8) Total Selling and Administrative Expenses $ 77,476 $ 90,341 Depreciation and Amortization Retail $ 8,966 $ 9,529 Wholesale 1,277 1,349 Corporate Services 10 18 Total Depreciation and Amortization $ 10,253 $ 10,896 Restructuring and Other Charges Retail $ 526 $ — Wholesale 526 — Corporate Services 3,581 375 Total Restructuring and Other Charges $ 4,633 $ 375 Operating Loss Retail $ (28,374) $ (34,540) Wholesale 603 1,419 Corporate Services (8,509) (7,607) Elimination (5,448) (4,879) Total Operating Loss $ (41,728) $ (45,607) |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block] | 13 weeks ended Reconciliation of segment Operating Loss from Continuing Operations to Loss from Continuing Operations Before Income Taxes: July 29, 2023 July 30, 2022 Total Operating Loss $ (41,728) $ (45,607) Interest Expense, net 8,254 3,868 Total Loss from Continuing Operations Before Income Taxes $ (49,982) $ (49,475) |
Net Earnings (Loss) Per Share (
Net Earnings (Loss) Per Share (Tables) | 3 Months Ended |
Jul. 29, 2023 | |
Reconciliation of Basic and Diluted Loss Per Share | The following is a reconciliation of the basic and diluted earnings per share calculation: 13 weeks ended (shares in thousands) July 29, 2023 July 30, 2022 Numerator for basic and diluted earnings per share: Loss from continuing operations, net of tax $ (49,971) $ (50,322) Loss from discontinued operations, net of tax (417) (2,385) Net loss available to common shareholders $ (50,388) $ (52,707) Denominator for basic and diluted earnings per share: Basic and diluted weighted average shares of Common Stock 52,642 52,172 Loss per share of Common Stock: Basic and Diluted Continuing operations $ (0.95) $ (0.96) Discontinued operations (0.01) (0.05) Basic and diluted loss per share of Common Stock $ (0.96) $ (1.01) |
Debt (Tables)_2
Debt (Tables) | 3 Months Ended |
Jul. 29, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | As of July 29, 2023 July 30, 2022 Credit Facility $ 249,735 $ 190,300 FILO Facility — 40,000 Term Loan 30,000 30,000 sub-total 279,735 260,300 Less: Deferred financing costs (2,072) (1,750) Total debt $ 277,663 $ 258,550 Balance Sheet classification: Short-term borrowings $ — $ 40,000 Long-term borrowings 277,663 218,550 Total debt $ 277,663 $ 258,550 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Jul. 29, 2023 | |
Leases [Abstract] | |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | The following table summarizes our minimum fixed lease obligations, excluding variable commissions: As of July 29, 2023 Remainder of Fiscal 2024 $ 148,353 Fiscal 2025 53,542 Fiscal 2026 39,072 Fiscal 2027 31,399 Fiscal 2028 24,316 Thereafter 59,227 Total lease payments 355,909 Less: imputed interest (33,838) Operating lease liabilities at period end $ 322,071 |
Supplemental Operating Lease Disclosures [Table Text Block] | The following summarizes additional information related to our operating leases: As of July 29, 2023 July 30, 2022 Weighted average remaining lease term (in years) 4.6 years 5.3 years Weighted average discount rate 4.1 % 4.2 % Supplemental cash flow information: Cash payments for lease liabilities within operating activities $ 22,804 $ 25,073 Right-of-use assets obtained in exchange for lease liabilities from initial recognition $ 59,304 $ 64,211 |
Lease, Cost | The following table summarizes lease expense: 13 weeks ended July 29, 2023 July 30, 2022 Variable lease expense $ 12,229 $ 15,183 Operating lease expense 22,389 22,862 Net lease expense $ 34,618 $ 38,045 |
Stock-Based Compensation Stoc_2
Stock-Based Compensation Stock-Based Compensation (Tables) | 3 Months Ended |
Jul. 29, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block] | We recognized compensation expense for previously granted long-term incentive plan awards in selling and administrative expenses as follows: 13 weeks ended July 29, July 30, Stock-based awards Restricted stock expense $ 7 $ 94 Restricted stock units expense 568 866 Performance share units expense — 10 Stock option expense 382 606 Sub-total stock-based awards: $ 957 $ 1,576 Cash settled awards Phantom share units expense $ (89) $ 188 Total compensation expense for long-term incentive awards $ 868 $ 1,764 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||
Jul. 28, 2023 | May 24, 2023 | Mar. 08, 2023 | Jul. 29, 2023 | Jul. 30, 2022 | Apr. 29, 2023 | Apr. 30, 2022 | May 01, 2021 | |
Restricted Cash | $ 11,637 | $ 7,492 | ||||||
Restricted Cash, Current | 10,704 | 6,593 | ||||||
Restricted Cash, Noncurrent | 933 | 899 | ||||||
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Including Disposal Group and Discontinued Operations | 19,294 | 15,107 | ||||||
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent | (49,971) | (50,322) | $ (90,140) | $ (61,559) | $ (133,569) | |||
Disposal Group, Including Discontinued Operation, Revenue | 2,784 | 9,184 | ||||||
Disposal Group, Including Discontinued Operations, Impairment Expense | 610 | 0 | ||||||
Disposal Group, Including Discontinued Operation, Costs of Goods Sold | 76 | 1,700 | ||||||
Disposal Group, Including Discontinued Operation, Gross Profit (Loss) | 2,708 | 7,484 | ||||||
Disposal Group, Including Discontinued Operation, General and Administrative Expense | 2,281 | 8,146 | ||||||
Disposal Group, Including Discontinued Operation, Depreciation and Amortization | 0 | 1,637 | ||||||
Disposal Group, Including Discontinued Operation, Other Income | (3,068) | 0 | ||||||
Disposal Group, Including Discontinued Operation, Other Expense | 3,287 | 0 | ||||||
Disposal Group, Including Discontinued Operation, Transaction Costs | (5) | 0 | ||||||
Net Cash Provided by (Used in) Operating Activities, Continuing Operations | (119,858) | (28,607) | 90,513 | $ (16,195) | $ 27,049 | |||
Short-term Debt | $ 0 | 40,000 | 0 | |||||
Savings Initiatives | We have implemented a significant cost reduction program designed to streamline our operations, maximize productivity and drive profitability. We have taken steps to significantly reduce our workforce, eliminated duplicate administrative headcounts at all levels, implemented improved system development processes to reduce maintenance costs, reduced capital expenditures, and evaluated operating contractual obligations for cost savings. We have achieved meaningful cost savings from this program of approximately $17,000 during the second half of the year ended April 29, 2023. These initiatives are expected to provide annualized savings of $30,000 to $35,000 in Fiscal 2024. Management's plans over the next twelve months include the further reduction of gross capital expenditures and other cost saving measures of approximately $25,000. Management believes that these plans are within its control and probable of being implemented on a timely basis.During the 13 weeks ended July 29, 2023, Net Loss from Continuing Operations decreased by $351 compared to the prior year period. During the 13 weeks ended July 29, 2023, Net Loss from Continuing Operations, excluding interest expense and restructuring and other charges, improved by $8,995 primarily due to operational improvements and cost savings initiatives. As discussed below, our first quarter is generally a low sales period, as the majority of sales and operating profit will be realized during the second and third quarters. | |||||||
Disposal Group, Including Discontinued Operation, Operating Income (Loss) | $ (397) | (2,299) | ||||||
Discontinued Operation, Tax Effect of Discontinued Operation | 20 | 86 | ||||||
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | (417) | (2,385) | ||||||
Disposal Group, Including Discontinued Operation, Cash and Cash Equivalents | 633 | 1,057 | ||||||
Disposal Group, Including Discontinued Operation, Accounts, Notes and Loans Receivable, Net | 649 | 480 | ||||||
Disposal Group, Including Discontinued Operation, Prepaid and Other Assets, Current | 2,043 | 901 | ||||||
Disposal Group, Including Discontinued Operation, Property, Plant and Equipment, Current | 20,904 | 19,523 | ||||||
Disposal Group, Including Discontinued Operation, Intangible Assets, Current | 1,230 | 402 | ||||||
Disposal Group, Including Discontinued Operation, Goodwill, Current | 4,700 | 4,700 | ||||||
Disposal Group, Including Discontinued Operation, Deferred Tax Assets | 0 | 130 | ||||||
Disposal Group, Including Discontinued Operation, Other Assets, Noncurrent | 266 | 237 | ||||||
Disposal Group, Including Discontinued Operation, Assets, Current | 30,425 | 27,430 | ||||||
Disposal Group, Including Discontinued Operation, Accounts Payable, Current | 216 | 211 | ||||||
Disposal Group, Including Discontinued Operation, Accrued Liabilities, Current | 5,235 | 8,212 | ||||||
Disposal Group, Including Discontinued Operation, Other Liabilities, Noncurrent | 31 | 0 | ||||||
Disposal Group, Including Discontinued Operation, Liabilities, Current | 5,482 | $ 8,423 | ||||||
Gain (Loss) on Disposition of Business | 3,068 | |||||||
Proceeds from Divestiture of Businesses | 20,000 | |||||||
Property, Plant and Equipment | ||||||||
Disposal Group, Including Discontinued Operations, Impairment Expense | 119 | |||||||
Property Subject to Operating Lease | ||||||||
Disposal Group, Including Discontinued Operations, Impairment Expense | 491 | |||||||
Amendment July2023 | ||||||||
Long-term Debt, Description | On July 28, 2023, we amended our Term Loan to (i) extend the maturity date of the Term Loan Agreement to April 7, 2025, (ii) allow for interest to be paid in kind until September 2, 2024, (iii) amend the 1.50% anniversary fee to recur on June 7 of each year that the Term Loan Agreement remains outstanding, with 2024 fee deferred to the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement) and (iv) amend certain negative covenants and affirmative and add certain additional covenants. We must pay a fee of $50,000 to the lenders under the Term Loan Agreement on the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement). | |||||||
Amendment July2023 | ||||||||
Long-term Debt, Description | On July 28, 2023, we amended our existing Credit Agreement to (i) extend the maturity date of the Credit Agreement to December 28, 2024, (ii) reduce advance rates with respect to the borrowing base by 1000 basis points on September 2, 2024 (in lieu of the reductions previously contemplated for September 2023), (iii) subject to the conditions set forth in such amendment, add a CARES Act tax refund claim to the borrowing base, from April 1, 2024 through July 31, 2024, (iv) amend the financial maintenance covenant to require Availability (as defined in the Credit Agreement) at all times greater than the greater of (x) 10% of the Aggregate Loan Cap (as defined in the Credit Agreement) and (y) (A) $32,500 minus, subject to the conditions set forth in such amendment, (B) (a) $7,500 for the period of April 1, 2024 through and including April 30, 2024, (b) $2,500 for the period of May 1, 2024 through and including May 31, 2024 and (c) $0 at all other times, (v) add a minimum Consolidated EBITDA (as defined in the Credit Agreement) financial maintenance covenant, and (vi) amend certain negative and affirmative covenants and add certain additional covenants, all as more particularly set forth in such amendment. The amendment also requires that we appoint a Chief Restructuring Officer and that, by August 11, 2023, we (i) appoint two independent members to the board of directors of the Company from prospective candidates that have been previously disclosed to the Administrative Agent and the Lenders and (ii) appoint a committee of the board of directors of the Company to consist of three board members (two of whom will be the new independent directors), and as of the date of this filing, we have satisfied such requirements. The committee’s responsibilities will include, among other things, to explore, consider, solicit expressions of interest or proposals for, respond to any communications, inquiries or proposals regarding, and advise as to all strategic alternatives to effect a “Specified Liquidity Transaction” (as defined in the Credit Agreement). There can be no guarantee or assurances that any such transaction or transactions be consummated. We must pay (i) a fee of 0.50% of the outstanding principal amount of the commitments under the Credit Agreement March 2023 amendment (as defined in the Credit Agreement) on the closing date (in lieu of the deferred fee previously contemplated in connection with the March 2023 amendment (as defined in the Credit Agreement)) and (ii) a fee of 1.00% of the outstanding principal amount of the commitments under the Credit Agreement as of the closing date on the earlier to occur of September 2, 2024 and an Event of Default (as defined in the Credit Agreement). | |||||||
New Credit Facility [Member] | ||||||||
Long-term Debt, Description | July 2023 Credit Agreement AmendmentOn July 28, 2023, we amended our existing Credit Agreement to (i) extend the maturity date of the Credit Agreement to December 28, 2024, (ii) reduce advance rates with respect to the borrowing base by 1000 basis points on September 2, 2024 (in lieu of the reductions previously contemplated for September 2023), (iii) subject to the conditions set forth in such amendment, add a CARES Act tax refund claim to the borrowing base, from April 1, 2024 through July 31, 2024, (iv) amend the financial maintenance covenant to require Availability (as defined in the Credit Agreement) at all times greater than the greater of (x) 10% of the Aggregate Loan Cap (as defined in the Credit Agreement) and (y) (A) $32,500 minus, subject to the conditions set forth in such amendment, (B) (a) $7,500 for the period of April 1, 2024 through and including April 30, 2024, (b) $2,500 for the period of May 1, 2024 through and including May 31, 2024 and (c) $0 at all other times, (v) add a minimum Consolidated EBITDA (as defined in the Credit Agreement) financial maintenance covenant, and (vi) amend certain negative and affirmative covenants and add certain additional covenants, all as more particularly set forth in such amendment. The amendment also requires that we appoint a Chief Restructuring Officer and that, by August 11, 2023, we (i) appoint two independent members to the board of directors of the Company from prospective candidates that have been previously disclosed to the Administrative Agent and the Lenders and (ii) appoint a committee of the board of directors of the Company to consist of three board members (two of whom will be the new independent directors). The committee’s responsibilities will include, among other things, to explore, consider, solicit expressions of interest or proposals for, respond to any communications, inquiries or proposals regarding, and advise as to all strategic alternatives to effect a “Specified Liquidity Transaction” (as defined in the Credit Agreement). There can be no guarantee or assurances that any such transaction or transactions be consummated. We must pay (i) a fee of 0.50% of the outstanding principal amount of the commitments under the Credit Agreement March 2023 amendment (as defined in the Credit Agreement) on the closing date (in lieu of the deferred fee previously contemplated in connection with the March 2023 amendment (as defined in the Credit Agreement)) and (ii) a fee of 1.00% of the outstanding principal amount of the commitments under the Credit Agreement as of the closing date on the earlier to occur of September 2, 2024 and an Event of Default (as defined in the Credit Agreement).During the 13 weeks ended July 29, 2023, we incurred debt issuance costs totaling $10,979 related to the July 2023 Credit Agreement amendment. The debt issuance costs have been deferred and are presented as prepaid and other current assets and other noncurrent assets in the condensed consolidated balance sheets, and subsequently amortized ratably over the term of the credit agreement. | May 2023 Credit Agreement AmendmentOn May 24, 2023, we amended our existing Credit Agreement to (i) increase the applicable margin with respect to the interest rate under the Credit Agreement to 3.75% per annum, in the case of interest accruing based on SOFR, and 2.75%, in the case of interest accruing based on an alternative base rate, in each case, without regard to a pricing grid, (ii) defer the reduction of advance rates used to calculate our borrowing capacity by an amount equal to 500 basis points previously required on May 31, 2023 to September 1, 2023, (iii) require cash flow reporting and variance testing commencing June 3, 2023 and (iv) defer partial prepayment of the term loan from the DSS segment sale proceeds to September 1, 2023. We did not incur debt issuance costs related to the May 2023 Credit Agreement amendment. For additional information related to the Credit Agreement amendment, see the Company’s Report on Form 8-K dated May 24, 2023 and filed with the SEC on May 31, 2023. | March 2023 Credit Agreement AmendmentOn March 8, 2023, we amended our existing Credit Agreement to (i) extend the maturity date of the Credit Agreement by six months to August 29, 2024, (ii) reduce the commitments under the Credit Agreement by $20,000 to $380,000, (iii) increase the applicable margin with respect to the interest rate under the Credit Agreement to 3.375% per annum, in the case of interest accruing based on a Secured Overnight Financing Rate, and 2.375%, in the case of interest accruing based on an alternative base rate, in each case, without regard to a pricing grid, (iv) reduce advance rates with respect to the borrowing base (x) by 500 basis points upon the achievement of certain liquidity events, which may include a sale of equity interests or of assets (a “Specified Event”), or, if such a Specified Event shall not have occurred, on May 31, 2023 (see discussion below) and (y) by an additional 500 basis points on September 29, 2023, (v) amend certain negative covenants and add certain additional covenants, (vi) amend the financial maintenance covenant to require Availability (as defined in the Credit Agreement) to be at all times greater than the greater of 10% of the Aggregate Loan Cap (as defined in the Credit Agreement) and $32,500 and (vii) require repayment of the loans under the Credit Agreement upon a Specified Event. For additional information related to the Credit Agreement amendment, see the Company’s Report on Form 8-K dated March 8, 2023 and filed with the SEC on March 9, 2023. As noted above, the amendment requires the achievement of a Special Event by no later than May 31, 2023 (as such date may be extended pursuant to the terms of the Credit Agreement). See Note 2. Summary of Significant Accounting Policies for information related to the sale of our DSS segment on May 31, 2023. We paid a fee of 0.25% of the outstanding principal amount of the commitments under the Credit Agreement on the amendment closing date and we will pay an additional fee of 1.00% of the outstanding principal amount of the commitments under the Credit Agreement on September 29, 2023.During the 52 weeks ended April 29, 2023, we incurred debt issuance costs totaling $4,081 related to the March 2023 Credit Agreement amendment. The debt issuance costs have been deferred and are presented as prepaid and other current assets and other noncurrent assets in the condensed consolidated balance sheets, and subsequently amortized ratably over the term of the credit agreement. | |||||
DSS [Member] | ||||||||
content amortization costs | $ 0 | $ 1,551 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Jul. 29, 2023 | Jul. 30, 2022 | Apr. 29, 2023 | Apr. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 264,161 | $ 254,674 | ||
Rental income | 11,511 | |||
Product sales and other | 252,650 | 243,762 | ||
Deferred Revenue | 15,768 | 18,675 | $ 15,356 | $ 16,475 |
Deferred Revenue, Current | 11,769 | 14,120 | ||
Deferred Revenue, Noncurrent | 3,999 | 4,555 | ||
Deferred Revenue, Additions | 12,856 | 17,502 | ||
Contract with Customer, Liability, Revenue Recognized | (12,444) | (15,302) | ||
Deferred Revenue, Additions | 12,856 | 17,502 | ||
Contract with Customer, Liability, Revenue Recognized | (12,444) | (15,302) | ||
Intersegment Eliminations [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | (20,090) | (18,916) | ||
Retail Segment [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 245,460 | 236,507 | ||
Retail Segment [Member] | Transferred at Point in Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Product sales and other | 233,949 | 225,595 | ||
Retail Segment [Member] | Transferred over Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Rental income | 10,912 | |||
Retail Segment [Member] | Service and Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 6,733 | 9,278 | ||
Retail Segment [Member] | Course Materials Product | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 138,536 | 127,493 | ||
Retail Segment [Member] | General Merchandise Product | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 88,680 | 88,824 | ||
Wholesale [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 38,791 | $ 37,083 |
Segment Reporting Segment Rep_2
Segment Reporting Segment Reporting (Details) $ in Thousands | 3 Months Ended | |
Jul. 29, 2023 USD ($) segment Store | Jul. 30, 2022 USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of Reportable Segments | segment | 2 | |
Number of Stores | Store | 1,289 | |
Revenues | $ 264,161 | $ 254,674 |
Gross Profit | 50,634 | 56,005 |
Depreciation and amortization expense | 10,253 | 10,896 |
Operating Income (Loss) | (41,728) | (45,607) |
Interest expense, net | 8,254 | 3,868 |
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | (49,982) | (49,475) |
Selling and administrative expenses | 77,476 | 90,341 |
Restructuring and other charges | 4,633 | 375 |
Corporate, Non-Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Depreciation and amortization expense | 10 | 18 |
Operating Income (Loss) | (8,509) | (7,607) |
Selling and administrative expenses | 4,918 | 7,214 |
Restructuring and other charges | 3,581 | 375 |
Intersegment Eliminations [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | (20,090) | (18,916) |
Gross Profit | (5,451) | (4,887) |
Operating Income (Loss) | (5,448) | (4,879) |
Selling and administrative expenses | (3) | (8) |
Retail Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 245,460 | 236,507 |
Gross Profit | 50,291 | 53,993 |
Depreciation and amortization expense | 8,966 | 9,529 |
Operating Income (Loss) | (28,374) | (34,540) |
Selling and administrative expenses | 69,173 | 79,004 |
Restructuring and other charges | $ 526 | 0 |
Wholesale [Member] | ||
Segment Reporting Information [Line Items] | ||
Number of Wholesale Customers | Store | 2,900 | |
Number of System Customers | Store | 330 | |
Revenues | $ 38,791 | 37,083 |
Gross Profit | 5,794 | 6,899 |
Depreciation and amortization expense | 1,277 | 1,349 |
Operating Income (Loss) | 603 | 1,419 |
Selling and administrative expenses | 3,388 | 4,131 |
Restructuring and other charges | $ 526 | $ 0 |
Physical Stores [Member] | ||
Segment Reporting Information [Line Items] | ||
Number of Stores | Store | 726 | |
Virtual Stores [Member] | ||
Segment Reporting Information [Line Items] | ||
Number of Stores | Store | 563 |
Net Earnings (Loss) Per Share -
Net Earnings (Loss) Per Share - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Jul. 29, 2023 | Jul. 30, 2022 | Apr. 29, 2023 | Apr. 30, 2022 | May 01, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Shares Paid for Tax Withholding for Share Based Compensation | 77,898 | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,698,357 | 4,722,668 | |||
Earnings Per Share, Basic | $ (0.96) | $ (1.01) | |||
Earnings Per Share, Diluted | $ (0.96) | $ (1.01) | |||
Basic | 52,642,000 | 52,172,000 | |||
Weighted Average Number of Shares Outstanding, Diluted | 52,642,000 | 52,172,000 | |||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 26,669 | ||||
Net Income (Loss) Attributable to Parent | (50,388) | $ (52,707) | |||
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent | (49,971) | (50,322) | $ (90,140) | $ (61,559) | $ (133,569) |
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | $ (417) | $ (2,385) | |||
Income (Loss) from Continuing Operations, Per Diluted Share | $ (0.95) | $ (0.96) | |||
Income (Loss) from Discontinued Operations and Disposal of Discontinued Operations, Net of Tax, Per Diluted Share | (0.01) | (0.05) | |||
Income (Loss) from Continuing Operations, Per Basic Share | (0.95) | (0.96) | |||
Discontinued Operation, Income (Loss) from Discontinued Operation, Net of Tax, Per Basic Share | $ (0.01) | $ (0.05) |
Fair Values of Financial Inst_2
Fair Values of Financial Instruments Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands | Jul. 29, 2023 | Jul. 30, 2022 |
Fair Value Disclosures [Abstract] | ||
Other Deferred Compensation Arrangements, Liability, Classified, Noncurrent | $ 1,166 | |
Other Deferred Compensation Arrangements, Liability, Current and Noncurrent | 2,976 | |
Other Deferred Compensation Arrangements, Liability, Current | 1,810 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other Deferred Compensation Arrangements, Liability, Current | 1,810 | |
Other Deferred Compensation Arrangements, Liability, Classified, Noncurrent | 1,166 | |
Other Deferred Compensation Arrangements, Liability, Current and Noncurrent | $ 2,976 | |
Phantom Share Units (PSUs) | ||
Fair Value Disclosures [Abstract] | ||
Other Deferred Compensation Arrangements, Liability, Classified, Noncurrent | $ 38 | |
Other Deferred Compensation Arrangements, Liability, Current and Noncurrent | 633 | |
Other Deferred Compensation Arrangements, Liability, Current | 595 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other Deferred Compensation Arrangements, Liability, Current | 595 | |
Other Deferred Compensation Arrangements, Liability, Classified, Noncurrent | 38 | |
Other Deferred Compensation Arrangements, Liability, Current and Noncurrent | $ 633 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |||||||
Jul. 28, 2023 | May 24, 2023 | Mar. 08, 2023 | Jul. 29, 2023 | Jul. 30, 2022 | Apr. 29, 2023 | Jul. 31, 2022 | Jun. 07, 2022 | |
Line of Credit Facility [Line Items] | ||||||||
Line Of Credit Potential Increase Amount | $ 100,000 | |||||||
Proceeds from Lines of Credit | 145,187 | $ 117,200 | ||||||
Repayments of Lines of Credit | 49,606 | |||||||
Short-term Debt | 0 | 40,000 | $ 0 | |||||
Letters of Credit Outstanding, Amount | 575 | 4,759 | ||||||
Debt, Long-term and Short-term, Combined Amount | 277,663 | 258,550 | ||||||
Long-Term Debt | 277,663 | 218,550 | $ 182,151 | |||||
Proceeds from (Repayments of) Secured Debt | 49,606 | 112,600 | ||||||
Long-term Line of Credit, Noncurrent | 249,735 | |||||||
Total Debt excluding Deferred Financing Costs | $ 279,735 | 260,300 | ||||||
Term Loan | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Long-term Debt, Description | July 2023 Term Loan Credit Agreement AmendmentOn July 28, 2023, we amended our Term Loan to (i) extend the maturity date of the Term Loan Agreement to April 7, 2025, (ii) allow for interest to be paid in kind until September 2, 2024, (iii) amend the 1.50% anniversary fee to recur on June 7 of each year that the Term Loan Agreement remains outstanding, with 2024 fee deferred to the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement) and (iv) amend certain negative covenants and affirmative and add certain additional covenants. We must pay a fee of $50 to the lenders under the Term Loan Agreement on the earlier of September 2, 2024 and the Termination Date (as defined in the Term Loan Agreement).During the 13 weeks ended July 29, 2023, we incurred debt issuance costs totaling $369 related to the July 2023 Term Loan Credit Agreement amendment. The debt issuance costs have been deferred and are presented as a reduction to long-term borrowings in the condensed consolidated balance sheets, and subsequently amortized ratably over the term of the Term Loan Facility. | March 2023 Term Loan Credit Agreement AmendmentOn March 8, 2023, we amended the Term Loan Credit Agreement to (i) extend the maturity date of the Term Loan Credit Agreement by six months to December 7, 2024, (ii) permit the application of certain proceeds to the repayment of the loans under Credit Agreement and (iii) amend certain negative covenants and add certain additional covenants to conform to the Credit Agreement. In addition, the amendment requires the achievement of a Specified Event (as described above) by no later than May 31, 2023 (as such date may be extended under the Credit Agreement, but no later than August 31, 2023 without consent from lenders under the Term Loan Credit Agreement). During the 52 weeks ended April 29, 2023, we incurred debt issuance costs totaling $431 related to the March 2023 Term Loan Credit Agreement amendment. We paid a fee of $50 on the amendment closing date to the lenders under the Term Loan Credit Agreement. The debt issuance costs have been deferred and are presented as prepaid and other current assets and other noncurrent assets in the condensed consolidated balance sheets, and subsequently amortized ratably over the term of the credit agreement. | The Term Loans accrue interest at a rate equal to 11.25%, payable quarterly. To date, all interest on the term loan has been paid in cash. The Term Loans do not amortize prior to maturity. The Term Loan Credit Agreement does not contain a financial covenant, but otherwise contains representations and warranties, covenants and events of default that are substantially the same as those in the Credit Agreement, including restrictions on the ability of the Company and its subsidiaries to incur additional debt, incur or permit liens on assets, make investments and acquisitions, consolidate or merge with any other company, engage in asset sales and make dividends and distributions. The Term Loan Facility is secured by second-priority liens on all assets securing the obligations under the Credit Agreement, which is all of the assets of the Company and the Guarantors, subject to customary exclusions and limitations set forth in the Term Loan Credit Agreement and the other loan documents executed in connection therewith.The Credit Agreement amendment permitted us to incur the Term Loan Facility and also provides that, upon repayment of the Term Loan Credit Agreement (and, if applicable, any replacement credit facility thereof), we may incur second lien secured debt in an aggregate principal amount not to exceed $75,000. | |||||
Long-Term Debt | $ 30,000 | $ 30,000 | ||||||
Repayments of Long-Term Debt | 0 | 0 | ||||||
Proceeds from Issuance of Debt | 0 | 30,000 | ||||||
Revolving Credit Facility [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 500,000 | |||||||
New Credit Facility [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Credit Facility Maturity Term | 5 years | |||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 400,000 | |||||||
Debt, Long-term and Short-term, Combined Amount | 230,300 | |||||||
Long-term Debt, Description | July 2023 Credit Agreement AmendmentOn July 28, 2023, we amended our existing Credit Agreement to (i) extend the maturity date of the Credit Agreement to December 28, 2024, (ii) reduce advance rates with respect to the borrowing base by 1000 basis points on September 2, 2024 (in lieu of the reductions previously contemplated for September 2023), (iii) subject to the conditions set forth in such amendment, add a CARES Act tax refund claim to the borrowing base, from April 1, 2024 through July 31, 2024, (iv) amend the financial maintenance covenant to require Availability (as defined in the Credit Agreement) at all times greater than the greater of (x) 10% of the Aggregate Loan Cap (as defined in the Credit Agreement) and (y) (A) $32,500 minus, subject to the conditions set forth in such amendment, (B) (a) $7,500 for the period of April 1, 2024 through and including April 30, 2024, (b) $2,500 for the period of May 1, 2024 through and including May 31, 2024 and (c) $0 at all other times, (v) add a minimum Consolidated EBITDA (as defined in the Credit Agreement) financial maintenance covenant, and (vi) amend certain negative and affirmative covenants and add certain additional covenants, all as more particularly set forth in such amendment. The amendment also requires that we appoint a Chief Restructuring Officer and that, by August 11, 2023, we (i) appoint two independent members to the board of directors of the Company from prospective candidates that have been previously disclosed to the Administrative Agent and the Lenders and (ii) appoint a committee of the board of directors of the Company to consist of three board members (two of whom will be the new independent directors). The committee’s responsibilities will include, among other things, to explore, consider, solicit expressions of interest or proposals for, respond to any communications, inquiries or proposals regarding, and advise as to all strategic alternatives to effect a “Specified Liquidity Transaction” (as defined in the Credit Agreement). There can be no guarantee or assurances that any such transaction or transactions be consummated. We must pay (i) a fee of 0.50% of the outstanding principal amount of the commitments under the Credit Agreement March 2023 amendment (as defined in the Credit Agreement) on the closing date (in lieu of the deferred fee previously contemplated in connection with the March 2023 amendment (as defined in the Credit Agreement)) and (ii) a fee of 1.00% of the outstanding principal amount of the commitments under the Credit Agreement as of the closing date on the earlier to occur of September 2, 2024 and an Event of Default (as defined in the Credit Agreement).During the 13 weeks ended July 29, 2023, we incurred debt issuance costs totaling $10,979 related to the July 2023 Credit Agreement amendment. The debt issuance costs have been deferred and are presented as prepaid and other current assets and other noncurrent assets in the condensed consolidated balance sheets, and subsequently amortized ratably over the term of the credit agreement. | May 2023 Credit Agreement AmendmentOn May 24, 2023, we amended our existing Credit Agreement to (i) increase the applicable margin with respect to the interest rate under the Credit Agreement to 3.75% per annum, in the case of interest accruing based on SOFR, and 2.75%, in the case of interest accruing based on an alternative base rate, in each case, without regard to a pricing grid, (ii) defer the reduction of advance rates used to calculate our borrowing capacity by an amount equal to 500 basis points previously required on May 31, 2023 to September 1, 2023, (iii) require cash flow reporting and variance testing commencing June 3, 2023 and (iv) defer partial prepayment of the term loan from the DSS segment sale proceeds to September 1, 2023. We did not incur debt issuance costs related to the May 2023 Credit Agreement amendment. For additional information related to the Credit Agreement amendment, see the Company’s Report on Form 8-K dated May 24, 2023 and filed with the SEC on May 31, 2023. | March 2023 Credit Agreement AmendmentOn March 8, 2023, we amended our existing Credit Agreement to (i) extend the maturity date of the Credit Agreement by six months to August 29, 2024, (ii) reduce the commitments under the Credit Agreement by $20,000 to $380,000, (iii) increase the applicable margin with respect to the interest rate under the Credit Agreement to 3.375% per annum, in the case of interest accruing based on a Secured Overnight Financing Rate, and 2.375%, in the case of interest accruing based on an alternative base rate, in each case, without regard to a pricing grid, (iv) reduce advance rates with respect to the borrowing base (x) by 500 basis points upon the achievement of certain liquidity events, which may include a sale of equity interests or of assets (a “Specified Event”), or, if such a Specified Event shall not have occurred, on May 31, 2023 (see discussion below) and (y) by an additional 500 basis points on September 29, 2023, (v) amend certain negative covenants and add certain additional covenants, (vi) amend the financial maintenance covenant to require Availability (as defined in the Credit Agreement) to be at all times greater than the greater of 10% of the Aggregate Loan Cap (as defined in the Credit Agreement) and $32,500 and (vii) require repayment of the loans under the Credit Agreement upon a Specified Event. For additional information related to the Credit Agreement amendment, see the Company’s Report on Form 8-K dated March 8, 2023 and filed with the SEC on March 9, 2023. As noted above, the amendment requires the achievement of a Special Event by no later than May 31, 2023 (as such date may be extended pursuant to the terms of the Credit Agreement). See Note 2. Summary of Significant Accounting Policies for information related to the sale of our DSS segment on May 31, 2023. We paid a fee of 0.25% of the outstanding principal amount of the commitments under the Credit Agreement on the amendment closing date and we will pay an additional fee of 1.00% of the outstanding principal amount of the commitments under the Credit Agreement on September 29, 2023.During the 52 weeks ended April 29, 2023, we incurred debt issuance costs totaling $4,081 related to the March 2023 Credit Agreement amendment. The debt issuance costs have been deferred and are presented as prepaid and other current assets and other noncurrent assets in the condensed consolidated balance sheets, and subsequently amortized ratably over the term of the credit agreement. | |||||
Long-term Line of Credit, Noncurrent | 249,735 | 190,300 | ||||||
FILO [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 100,000 | $ 0 | ||||||
Term Loan | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt Issuance Costs, Net | (2,072) | (1,750) | ||||||
Long-term Line of Credit, Noncurrent | $ 30,000 | $ 30,000 |
Leases Leases (Details)
Leases Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 29, 2023 | Jul. 30, 2022 | |
Leases [Abstract] | ||
Operating Lease, Weighted Average Remaining Lease Term | 4 years 7 months 6 days | 5 years 3 months 18 days |
Variable Lease, Cost | $ 12,229 | $ 15,183 |
Lease, Cost | 22,389 | 22,862 |
Operating Lease, Expense | 34,618 | $ 38,045 |
Lessee, Operating Lease, Liability, Payments, Due Year Two | 53,542 | |
Lessee, Operating Lease, Liability, Payments, Due Year Three | 39,072 | |
Lessee, Operating Lease, Liability, Payments, Due Year Four | 31,399 | |
Lessee, Operating Lease, Liability, Payments, Due Year Five | 24,316 | |
Lessee, Operating Lease, Liability, Payments, Due after Year Five | 59,227 | |
Lessee, Operating Lease, Liability, Payments, Due | 355,909 | |
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | 33,838 | |
Operating Lease, Liability | $ 322,071 | |
Operating Lease, Weighted Average Discount Rate, Percent | 4.10% | 4.20% |
Operating Lease, Payments | $ 22,804 | $ 25,073 |
ROU Asst Obtained in Exchange for Lease Liabilites | 59,304 | $ 64,211 |
Lessee, Operating Lease, Liability, to be Paid, Year One | $ 148,353 |
Supplementary Information (Deta
Supplementary Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 29, 2023 | Jul. 30, 2022 | |
Restructuring and other charges | $ 4,633 | $ 375 |
Employee Severance [Member] | ||
Restructuring and other charges | 1,051 | |
Other Restructuring [Member] | ||
Restructuring and other charges | 3,582 | |
Employee Severance [Member] | ||
Accrued Salaries | $ 1,007 |
Stock-Based Compensation Stoc_3
Stock-Based Compensation Stock-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 29, 2023 | Jul. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation | $ 957 | $ 1,576 |
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 5,131 | |
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 1 year 7 months 6 days | |
Selling, General and Administrative Expenses [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation | $ 957 | 1,576 |
us-gaap_LongTermIncentivePlanCompensation [Line Items] | 868 | 1,764 |
Selling, General and Administrative Expenses [Member] | Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation | 7 | 94 |
Selling, General and Administrative Expenses [Member] | Restricted Stock Units (RSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation | 568 | 866 |
Selling, General and Administrative Expenses [Member] | Performance Share Units (PSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation | 0 | 10 |
Selling, General and Administrative Expenses [Member] | Equity Option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation | 382 | 606 |
Selling, General and Administrative Expenses [Member] | Phantom Share Units (PSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Deferred Compensation Arrangement with Individual, Compensation Expense | $ (89) | $ 188 |
Income Taxes Income Taxes (Deta
Income Taxes Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 29, 2023 | Jul. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||
Income Tax Expense (Benefit) | $ (11) | $ 847 |
Effective Income Tax Rate Reconciliation, Percent | 0% | (1.70%) |
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | $ (49,982) | $ (49,475) |