Exhibit 99.1
Barnes & Noble.Com Consumer Sales up 4.7 Percent; EPS Exceeds Forecast
NEW YORK--(BUSINESS WIRE)--April 30, 2003--Barnes & Noble.com
(Nasdaq: BNBN) (www.bn.com) announced today that the company's
first-quarter sales of books, music and DVD/video direct to consumers
increased 4.7 percent to $99.5 million; consolidated sales were $106.0
million, in line with the company's estimates.
The net loss for the first quarter was ($13.1) million, or ($0.08)
per share, exceeding the company's previous forecast of an EPS loss of
($0.10) to ($0.12) per share. The first-quarter results represent a
36.0 percent improvement from a net loss of ($20.5) million, or
($0.13) per share, in the first quarter of 2002.
EBITDA loss (loss before interest, taxes, depreciation,
amortization and equity losses) declined to ($5.9) million, a 52.8
percent improvement from the first quarter 2002 EBITDA loss of ($12.6)
million.
The gross margin improved to 24.5 percent from 21.7 percent in the
comparable period last year due to an increase in the company's
internal fulfillment rate and the more efficient utilization of
shipping providers.
The company continues to reduce and leverage its operating expense
base. Increased operating efficiencies and greater cost control
measures across the company's most significant expense categories led
to lower expenses quarter over quarter, in both absolute dollars and
as a percentage of sales. Total operating expenses decreased 11.4
percent quarter over quarter and improved as a percentage of sales to
37.1 percent from 41.6 percent.
"We are pleased with our first-quarter results as we made
significant progress towards our goal of profitability," said Marie
Toulantis, chief executive officer of Barnes & Noble.com. "Despite a
difficult retail environment, we achieved solid sales growth in our
core consumer business, significantly increased our gross margin,
reduced operating expenses and improved our bottom line."
Second Quarter
In April, Barnes & Noble.com launched a new and improved offering
for its used and out-of-print book service. Through the Barnes &
Noble.com web site, customers are able to buy directly from a network
comprised of thousands of independent third-party book dealers located
around the world. The new service, called Barnes & Noble BookQuest,
offers more than 30 million used and out-of-print book listings
available for sale and direct delivery to customers by the dealers in
the network. The company receives a commission on each sale from the
third-party sellers. Since the company is acting as an agent to
facilitate these sales, commissions earned are included in reported
net sales. Previously, the company recorded the full amount of the
sale, and the related costs, when selling used and out-of-print books.
This change in the used and out-of-print business will result in lower
net sales going forward. However, due to greater efficiencies inherent
in the new process, the company expects the lower sales to have a
slightly positive to neutral effect on the bottom line. The effect on
sales will be a decrease of approximately $5 million per quarter.
For the second quarter, net sales are expected to range between
$80 million to $85 million, resulting in a net loss per share of
($0.10) to ($0.12). This compares with second-quarter 2002 sales of
$85.8 million and a net loss per share of ($0.13).
Full Year
Full-year 2003 net sales are expected to be between $415 million
and $450 million, generating an EBITDA loss between ($16.0) million
and ($20.0) million, and a net loss per share of ($0.28) to ($0.34).
The EBITDA and net loss per share guidance remains unchanged from the
company's previous forecasts.
About Barnes & Noble.com
Barnes & Noble.com is a leading Internet-based retailer of books,
music, DVD/video and online courses. Since opening its online store
(www.bn.com) in March 1997, Barnes & Noble.com has attracted more than
14.4 million customers in 230 countries. Barnes & Noble.com's
bookstore includes the largest in-stock selection of in-print book
titles with access to approximately one million titles for immediate
delivery, supplemented by more than 30 million listings from its
nationwide network of out-of-print, rare and used book dealers. Barnes
& Noble.com offers its customers fast delivery, easy and secure
ordering, and rich editorial content.
SAFE HARBOR
This release may contain forward-looking statements regarding
expectations of the company. These statements are based on the beliefs
of the management of the company as well as assumptions made by and
information currently available to the management of the company. Such
statements reflect the current views of the company with respect to
future events, the outcome of which is subject to certain risks,
including among others general economic and market conditions, changes
in product demand, the growth rate of Internet usage and e-commerce,
possible disruptions in the company's computer or telephone systems,
possible increases in shipping rates or interruptions in shipping
service, effects of competition, the level and volatility of interest
rates, the performance of the company's new product initiatives, the
successful integration of acquired businesses, unanticipated adverse
litigation results or effects, product shortages, changes in tax and
other governmental rules and regulations applicable to the company and
other factors, risks and uncertainties more specifically set forth in
the company's public filings with the Securities and Exchange
Commission. The forward-looking statements herein speak only as of the
date of this release. The company expressly disclaims any obligation
or undertaking to release publicly any updates or revisions to any
forward-looking statement included in this release to reflect any
changes in the company's expectations or any changes in events,
conditions, or circumstances on which any such statement is based.
Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results or
outcomes may vary materially from those described herein.
-- Two tables to follow --
barnesandnoble.com inc.
Consolidated Statements of Operations
(thousands of dollars, except per share data)
(unaudited)
Three Months Ended
-----------------------
March 31, March 31,
2003 2002
----------- -----------
Consumer sales $ 99,549 $ 95,125
Corporate sales 6,415 11,410
----------- -----------
Net sales 105,964 106,535
Cost of sales 79,968 83,373
----------- -----------
Gross profit 25,996 23,162
----------- -----------
Operating expenses:
Fulfillment and customer service 9,005 9,472
Marketing, sales and editorial 9,129 10,277
Technology and web site development 7,390 9,576
General and administrative 6,392 6,388
Depreciation and amortization 7,354 8,092
Equity in net loss of equity investments
including amortization of goodwill - 528
----------- -----------
Total operating expenses 39,270 44,333
----------- -----------
Operating loss (13,274) (21,171)
Interest income, net 137 634
----------- -----------
Net loss $ (13,137) $ (20,537)
=========== ===========
Basic and diluted net loss per common share ($0.08) ($0.13)
Average shares
(diluted -- if converted) (1) 158,802 158,787
barnesandnoble.com inc.
Consolidated Statements of Operations (continued)
(thousands of dollars, except per share data)
(unaudited)
Three Months Ended
-----------------------
March 31, March 31,
2003 2002
----------- -----------
Percent of sales:
Gross margin 24.5% 21.7%
Operating expenses:
Fulfillment and customer service 8.5 8.9
Marketing, sales and editorial 8.6 9.6
Technology and web site development 7.0 9.0
General and administrative 6.0 6.0
Depreciation and amortization 6.9 7.6
Equity in net loss of equity investments
including amortization of goodwill - 0.5
----------- -----------
Total operating expenses 37.1 41.6
----------- -----------
Operating loss (12.5) (19.9)
Interest income, net 0.1 0.6
----------- -----------
Net loss (12.4)% (19.3)%
=========== ===========
(1) Reflects the assumed conversion of outstanding membership units of
barnesandnoble.com llc into outstanding shares of
barnesandnoble.com inc. for all periods presented.
barnesandnoble.com inc.
Consolidated Balance Sheets
(thousands of dollars, except share and per share data)
March 31, December 31,
2003 2002
------------ ------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 47,027 $ 70,144
Receivables, net 4,848 14,631
Merchandise inventories 45,420 48,303
Prepaid expenses and other current assets 3,496 3,991
------------ ------------
Total current assets 100,791 137,069
------------ ------------
Fixed assets, net 52,463 58,871
Goodwill, net 13,777 13,777
Other non-current assets 19 17
------------ ------------
Total assets $ 167,050 $ 209,734
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 10,016 $ 16,071
Accrued liabilities 49,605 70,456
Payable to affiliate 45,620 48,261
------------ ------------
Total current liabilities 105,241 134,788
------------ ------------
Minority interest 42,489 52,305
------------ ------------
Commitments and contingencies
Stockholders' equity:
Preferred Stock: $0.001 par value;
50,000,000 shares authorized; none issued
and outstanding - -
Common Stock Series A; $0.001 par value;
750,000,000 shares authorized; 43,802,228
shares issued and outstanding 44 44
Common Stock Series B; $0.001 par value;
1,000 shares authorized; 1 share issued
and outstanding - -
Common Stock Series C; $0.001 par value;
1,000 shares authorized; 1 share issued
and outstanding - -
Paid-in capital 189,294 189,294
Accumulated deficit (1) (170,018) (166,697)
------------ ------------
Total stockholders' equity 19,320 22,641
------------ ------------
Total liabilities and stockholders' equity $ 167,050 $ 209,734
============ ============
(1) Represents accumulated deficit of barnesandnoble.com llc since
barnesandnoble.com inc.'s initial public offering.
CONTACT: Carolyn Brown
Director
Corporate Communications
Barnes & Noble.com
212-633-4062
cbrown@bn.com
or
Kevin Frain
Chief Financial Officer
Barnes & Noble.com
212-414-6093
kfrain@book.com