Exhibit 99.1
Barnes & Noble.com Reports Third Quarter 2003 Results;
Third Quarter EBITDA Loss Improves 36 Percent
NEW YORK--(BUSINESS WIRE)--Oct. 28, 2003--Barnes & Noble.com
(Nasdaq:BNBN) (www.bn.com) announced today that the company's net
sales for third quarter 2003 were $99.0 million, within the previous
estimates of $97 million to $102 million.
The company's third quarter gross margin improved to 24.6 percent
from 24.0 percent in the third quarter of 2002 as a result of an
increase in the company's internal fulfillment rate as well as the
change in the model for used and out-of-print books, which results in
higher gross margins and lower reported sales.
During third quarter 2003, the company reduced its total operating
expenses on both a dollar basis and as a percentage of net sales as it
continued to realize greater efficiencies across its operations. Total
operating expenses decreased 13.8 percent quarter over quarter and
improved as a percentage of net sales to 36.9 percent in the third
quarter of 2003 from 41.3 percent in the third quarter of 2002.
The company's EBITDA loss (loss before interest, taxes,
depreciation and amortization) for the third quarter improved 36.1
percent to ($6.0) million from ($9.3) million in the third quarter of
2002.(1)
The net loss for the third quarter was ($12.2) million, or ($0.08)
per share, which was at the low end of the company's forecast for an
EPS loss of ($0.08) to ($0.10) per share. The third quarter 2003
results represent a 30.4 percent improvement from a net loss of
($17.5) million or ($0.11) per share for the third quarter of 2002.
"We are well-positioned for a strong holiday season," said Marie
Toulantis, chief executive officer of Barnes & Noble.com. "We have
exciting merchandising and marketing programs planned for this
holiday, and we remain focused on EBITDA profitability for the fourth
quarter 2003 by continuing to build on the strong operational
efficiencies realized throughout the year."
Full Year
Full year 2003 sales are expected to be in the range of $415
million to $435 million. Full year net loss per share remains
unchanged: the full year 2003 net loss per share is expected to be
between ($0.28) to ($0.32).
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
15.8 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.
(1) The third quarter 2003 EBITDA loss of ($5.97) million
consisted of a net loss of ($12.16) million before interest
income of $0.02 million and depreciation and amortization of
($6.21) million. The third quarter 2002 EBITDA loss of ($9.33)
million consisted of a net loss of ($17.46) million before
interest income of $0.30 million and depreciation and
amortization of ($8.43) million. The company's management
considers EBITDA to be an important measure in evaluating the
company's financial performance and uses this measure in
managing ongoing operations.
-- Two tables to follow--
barnesandnoble.com inc.
Consolidated Statements of Operations
(thousands of dollars, except per share data)
(unaudited)
Three months ended Nine months ended
------------------- -------------------
September September September September
30, 30, 30, 30,
2003 2002 2003 2002
-------- -------- -------- --------
Net sales 98,993 102,575 291,433 294,947
Cost of sales 74,688 77,997 219,915 227,034
-------- -------- -------- --------
Gross profit 24,305 24,578 71,518 67,913
-------- -------- -------- --------
Operating expenses:
Fulfillment and
customer service 8,457 8,240 25,413 26,237
Marketing, sales and
editorial 7,187 8,682 22,945 26,731
Technology and web
site development 8,056 8,190 23,168 27,022
General and
administrative 6,572 6,998 19,338 19,802
Depreciation and
amortization 6,210 8,428 20,322 24,953
Equity in net loss of
equity investments
including related
amortization of
intangibles - 1,805 - 3,179
-------- -------- -------- --------
Total operating
expenses 36,482 42,343 111,186 127,924
Operating loss (12,177) (17,765) (39,668) (60,011)
Interest income, net 22 303 186 1,395
-------- -------- -------- --------
Net loss $(12,155) $(17,462) $(39,482) $(58,616)
-------- -------- -------- --------
Basic net loss per common
share ($0.08) ($0.11) ($0.25) ($0.37)
Average shares (diluted if
converted) (1) 159,385 158,788 159,035 158,788
barnesandnoble.com inc.
Consolidated Statements of Operations (continued)
(thousands of dollars, except per share data)
(unaudited)
Three months ended Nine months ended
------------------- -------------------
September September September September
30, 30, 30, 30,
2003 2002 2003 2002
--------- --------- --------- ---------
Percent of net sales:
Gross margin 24.6% 24.0% 24.5% 23.0%
Operating expenses:
Fulfillment and customer
service 8.5 8.0 8.7 8.9
Marketing, sales and
editorial 7.3 8.5 7.9 9.1
Technology and web site
development 8.1 8.0 7.9 9.2
General and administrative 6.6 6.8 6.6 6.7
Depreciation and
amortization 6.3 8.2 7.0 8.5
Equity in net loss of
equity investments
including related
amortization of
intangibles - 1.8 - 1.1
--------- --------- --------- ---------
Total operating expenses 36.9 41.3 38.2 43.4
Operating loss (12.3) (17.3) (13.6) (20.4)
Interest income, net 0.0 0.3 0.1 0.5
--------- --------- --------- ---------
Net loss (12.3)% (17.0)% (13.5)% (19.9)%
--------- --------- --------- ---------
(1) Includes the conversion of outstanding membership units of
barnesandnoble.com llc converted into outstanding shares of
barnesandnoble.com inc.
barnesandnoble.com inc.
Consolidated Balance Sheets
(thousands of dollars, except share and per share data)
September 30, December 31,
2003 2002
------------- ------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 37,959 $ 70,144
Receivables, net 5,524 14,631
Merchandise inventories 47,993 48,303
Prepaid expenses and other current
assets 4,122 3,991
----------- ---------
Total current assets 95,598 137,069
----------- ---------
Fixed assets, net 46,395 58,871
Goodwill, net 13,777 13,777
Other non-current assets 20 17
----------- ---------
Total assets $ 155,790 $ 209,734
=========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 12,536 $ 16,071
Accrued liabilities 54,871 70,456
Payable to affiliate 51,715 48,261
----------- ---------
Total current liabilities 119,122 134,788
----------- ---------
Minority interest 22,706 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;
44,594,993 and 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 190,555 189,294
Accumulated deficit (176,637) (166,697)
----------- ---------
Total stockholders' equity 13,962 22,641
----------- ---------
Total liabilities and stockholders'
equity $ 155,790 $ 209,734
=========== =========
CONTACT: Barnes & Noble.com
Carolyn Brown, 212-633-4062
cbrown@bn.com
or
Kevin Frain, 212-414-6093
kfrain@book.com