Exhibit 99.1
Barnes & Noble Announces First Quarter Results
NEW YORK--(BUSINESS WIRE)--May 22, 2003--Barnes & Noble, Inc.
(NYSE: BKS), the world's largest bookseller, today reported financial
results for the first quarter ended May 3, 2003.
FIRST QUARTER RESULTS
Barnes & Noble Booksellers
For the first quarter, sales were $863.9 million and net loss was
$(3.2) million or $(0.05) per share.
-- Barnes & Noble store sales were $803.5 million for the
quarter. Comparable store sales decreased (1.8)% for the month
of April and (5.2)% for the first quarter. The company opened
four new Barnes & Noble stores and closed two locations ending
the quarter with 630 stores.
-- B. Dalton sales, which comprise approximately 5.0% of total
bookstore sales, were $45.9 million for the quarter, a
decrease of (24.1)%. Comparable store sales decreased (11.7)%
for the month of April and (14.0)% for the first quarter. The
company closed 13 B. Dalton stores.
The results include the effect of the newly adopted Emerging
Issues Task Force Issue No. 02-16 (EITF 02-16), which addresses the
accounting for cooperative advertising and other vendor incentive
programs. The impact of EITF 02-16 was less than $(0.01) per share for
the first quarter and is expected to be approximately $(0.02) per
share for the full year.
"An improvement in April sales enabled us to outperform our
revised guidance, in spite of the difficulties all retailers
experienced in the first quarter," said Steve Riggio, chief executive
officer of Barnes & Noble, Inc. "However, we remain cautious about
sales trends for the balance of the year due to the current uncertain
retail climate."
GameStop
GameStop, the nation's largest video game and entertainment
software specialty retailer, reported a comparable store sales
increase of 3.5% during the quarter, on top of a 28.7% comparable
store sales increase during the first quarter of fiscal 2002. GameStop
sales were $321.7 million for the quarter, an increase of 18.5%. The
company's share of net earnings for the first quarter (based upon
Barnes & Noble, Inc.'s basic ownership interest of approximately 63%)
was $4.2 million or $0.06 per share.
Barnes & Noble.com
Barnes & Noble.com reported a first quarter EBITDA loss (loss
before interest, taxes, depreciation, amortization and equity losses)
of $(5.9) million, a 52.8% improvement from the first quarter 2002
EBITDA loss. Total operating expenses decreased 11.4%
quarter-over-quarter, as Barnes & Noble.com continues to reduce and
leverage its operating expense base.
The company's share of net losses for Barnes & Noble.com was
$(3.0) million or $(0.04) per share for the quarter.
Consolidated
Consolidated net loss for the first quarter was $(2.0) million or
$(0.03) per share compared with $(1.4) million or $(0.02) per share,
prior to a non-cash impairment charge of $(0.23) per share, in the
previous year.
GUIDANCE FOR THE SECOND QUARTER
Barnes & Noble Booksellers
The company expects comparable store sales at Barnes & Noble
stores to range from flat to 2.0%. Based upon these projections, the
company expects earnings to range between $0.10 and $0.14 per share
for the second quarter of 2003, versus an equivalent $0.16 for the
same period last year.
GameStop
The company's share of net earnings in GameStop is expected to
range from $0.05 to $0.06 per share.
Barnes & Noble.com
The company's share of second quarter net losses in Barnes &
Noble.com is expected to be in the range of $(0.05) to $(0.06) per
share.
Consolidated
Consolidated results for the second quarter are expected to range
from $0.09 to $0.15 per share, based upon a share count of
approximately 67 million shares. Full year guidance remains unchanged,
in a range of $1.87 to $1.95 per share.
A conference call with Barnes & Noble, Inc.'s management will be
simulcast on the Web at (www.companyboardroom.com) beginning at 11
A.M. ET on Thursday, May 22, 2003, and is accessible at
(http://www.barnesandnobleinc.com/financials), where it will be
archived until June 20, 2003.
The next scheduled press release will be the May sales release on
June 5, 2003.
ABOUT BARNES & NOBLE, INC.
Barnes & Noble, Inc. (NYSE: BKS) is the world's largest
bookseller, operating 630 Barnes & Noble stores in 49 states. It also
operates 245 B. Dalton Bookseller stores, primarily in regional
shopping malls. The company offers titles from more than 50,000
publisher imprints, including thousands of small, independent
publishers and university presses. It conducts its e-commerce business
through Barnes & Noble.com (NASDAQ: BNBN) (http://www.bn.com) in which
it owns an approximate 38% interest.
Barnes & Noble also has approximately a 60% interest in GameStop
(NYSE: GME), the nation's largest video game and entertainment
software specialty retailer with 1,309 stores.
General financial information on Barnes & Noble, Inc. can be
obtained via the Internet by visiting the company's corporate Web
site: http://www.barnesandnobleinc.com/financials.
SAFE HARBOR
This press release contains "forward-looking statements." Barnes &
Noble is including this statement for the express purpose of availing
itself of the protections of the safe harbor provided by the Private
Securities Litigation Reform Act of 1995 with respect to all such
forward-looking statements. These forward-looking statements are based
on currently available information and represent the beliefs of the
management of the company. These statements are subject to risks and
uncertainties that could cause actual results to differ materially.
These risks include, but are not limited to, general economic and
market conditions, decreased consumer demand for the company's
products, possible disruptions in the company's computer or telephone
systems, possible work stoppages or increases in labor costs, possible
increases in shipping rates or interruptions in shipping service,
effects of competition, possible disruptions or delays in the opening
of new stores or the inability to obtain suitable sites for new
stores, higher than anticipated store closing or relocation costs,
higher interest rates, the performance of the company's online and
other initiatives, the successful integration of acquired businesses,
unanticipated increases in merchandise or occupancy costs,
unanticipated adverse litigation results or effects, product
shortages, and other factors which may be outside of the company's
control. Please refer to the company's annual, quarterly and periodic
reports on file with the SEC for a more detailed discussion of these
and other risks that could cause results to differ materially.
BARNES & NOBLE, INC. AND SUBSIDIARIES
First Quarter Summary
($ in millions, except per share amounts)
13 weeks ended
------------------------
May 3, 2003 May 4, 2002
----------- -----------
BARNES & NOBLE RETAIL OPERATIONS
BARNES & NOBLE BOOKSELLERS
(Bookstores - includes Calendar Club and
Sterling Publishing)
Sales $ 864 862
Operating loss (1) (19)
Depreciation and amortization 33 31
Impairment charge - 25
------- --------
EBITDA (operating loss + depreciation
and amortization + impairment charge) 32 37
======= ========
EPS (0.05) 0.01
GAMESTOP
(Video Game & Entertainment Software Stores)
Sales 322 271
Operating profit 11 9
Depreciation and amortization 6 5
------- --------
EBITDA (operating profit + depreciation and
amortization) 17 14
======= ========
Barnes & Noble, Inc.'s percentage ownership
in GameStop (basic) 63.1% 66.3%
------- --------
Barnes & Noble, Inc.'s portion of GameStop's
EBITDA 11 9
======= ========
EPS 0.06 0.05
TOTAL RETAIL EPS 0.01 0.06
INVESTING ACTIVITIES
Share of net losses of Barnes & Noble.com (0.04) (0.07)
Share of net loss from other investments - (0.01)
------- --------
CONSOLIDATED EPS BEFORE GEMSTAR IMPAIRMENT
CHARGE (0.03) (0.02)
Impairment charge (Gemstar International
Ltd.) (1) - (0.23)
------- --------
CONSOLIDATED EPS $ (0.03) (0.25)
======= ========
Weighted average shares outstanding 64,867,000 67,252,000
(1) In fiscal 1998, Barnes & Noble, Inc. purchased an investment in
NuvoMedia, Inc. for $4.8 million. In fiscal 1999, NuvoMedia was
acquired by Gemstar International Ltd. (Gemstar). In connection
with this sale, Barnes & Noble, Inc. recognized a pre-tax gain of
$22.4 million (which was recorded as stock in Gemstar). As a
result of Gemstar's financial difficulties, the Company believed
that the decline in the value of its investment in Gemstar was
other than temporary, and recorded an impairment charge in the
first quarter of fiscal 2002. The investment was sold in the
second quarter of fiscal 2002.
BARNES & NOBLE, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(thousands of dollars, except per share data)
- ----------------------------------------------------------------------
13 weeks ended
-----------------
May 3, 2003 May 4, 2002
----------- -----------
Sales $1,185,605 1,133,126
Cost of sales and occupancy 884,960 849,990
---------- ----------
Gross profit 300,645 283,136
---------- ----------
Selling and administrative expenses 250,673 230,544
Depreciation and amortization 39,040 35,750
Pre-opening expenses 1,502 1,750
Impairment charge - 25,328
---------- ----------
Operating profit (loss) 9,430 (10,236)
Interest expense, net (4,643) (5,406)
Equity in net loss of Barnes & Noble.com (4,972) (7,435)
Other expense, net - (1,813)
---------- ----------
Loss before taxes and minority interest (185) (24,890)
Income taxes (75) (10,227)
----------- -----------
Loss before minority interest (110) (14,663)
Minority interest (1,916) (1,658)
---------- ----------
Net loss $ (2,026) (16,321)
========== ==========
Loss per common share:
Basic $ (0.03) (0.25)
Diluted $ (0.03) (0.25)
Weighted average common shares outstanding
Basic 64,867,000 67,252,000
Diluted 64,867,000 67,252,000
Percentage of sales:
Sales 100.0% 100.0%
Cost of sales and occupancy 74.6% 75.0%
---------- ----------
Gross profit 25.4% 25.0%
---------- ----------
Selling and administrative expenses 21.1% 20.3%
Depreciation and amortization 3.3% 3.2%
Pre-opening expenses 0.2% 0.2%
Impairment charge 0.0% 2.2%
---------- ----------
Operating profit (loss) 0.8% -0.9%
Interest expense, net -0.4% -0.5%
Equity in net loss of Barnes & Noble.com -0.4% -0.6%
Other expense, net 0.0% -0.2%
---------- ----------
Loss before taxes and minority interest 0.0% -2.2%
Income taxes 0.0% -0.9%
---------- ----------
Loss before minority interest 0.0% -1.3%
Minority interest -0.2% -0.1%
---------- ----------
Net loss -0.2% -1.4%
========== ==========
BARNES & NOBLE, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(thousands of dollars, except per share data)
- ----------------------------------------------------------------------
May 3, May 4, February 1,
2003 2002 2003
-------- -------- ---------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 195,987 183,262 267,642
Receivables, net 64,014 52,474 66,948
Barnes & Noble.com receivable 35,920 43,618 55,174
Merchandise inventories 1,418,377 1,354,708 1,395,872
Prepaid expenses and other current
assets 103,539 105,964 101,232
---------- --------- ---------
Total current assets 1,817,837 1,740,026 1,886,868
---------- --------- ---------
Property and equipment:
Land and land improvements 3,247 3,247 3,247
Buildings and leasehold improvements 491,278 466,174 495,499
Fixtures and equipment 949,266 842,373 936,136
---------- --------- ---------
1,443,791 1,311,794 1,434,882
Less accumulated depreciation and
amortization 842,580 719,777 812,579
---------- --------- ---------
Net property and equipment 601,211 592,017 622,303
---------- --------- ---------
Goodwill 391,704 340,881 390,396
Intangible assets, net 47,713 - 48,176
Investment in Barnes & Noble.com 19,782 40,782 23,280
Other noncurrent assets 23,009 39,317 24,404
---------- --------- ---------
Total assets $2,901,256 2,753,023 2,995,427
========== ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 661,556 677,850 710,907
Accrued liabilities 420,861 335,200 520,541
---------- --------- ---------
Total current liabilities 1,082,417 1,013,050 1,231,448
---------- --------- ---------
Long-term debt 357,000 355,000 300,000
Deferred income taxes 119,845 115,079 119,823
Other long-term liabilities 115,142 107,462 115,415
Minority interest 202,979 183,664 200,951
Shareholders' equity:
Common stock; $.001 par value;
300,000,000 shares authorized;
73,470,067, 72,856,628 and
73,110,740 shares issued,
respectively 73 73 73
Additional paid-in capital 832,339 821,504 828,522
Accumulated other comprehensive
loss (11,032) (813) (11,064)
Retained earnings 389,624 275,381 391,650
Treasury stock, at cost, 8,807,700,
5,504,700 and 8,502,700 shares,
respectively (187,131) (117,377) (181,391)
---------- --------- ---------
Total shareholders' equity 1,023,873 978,768 1,027,790
---------- --------- ---------
Commitments and contingencies - - -
---------- --------- ---------
Total liabilities and
shareholders' equity $2,901,256 2,753,023 2,995,427
========== ========= =========
CONTACT: Media Contact:
Mary Ellen Keating
Senior Vice President
Corporate Communications
Barnes & Noble, Inc.
(212) 633-3323
or
Investor Contact:
Joseph J. Lombardi
Chief Financial Officer
Barnes & Noble, Inc.
(212) 633-3215