Exhibit 99.1
Barnes & Noble.com Reports Q1 2004 Results; Q1 Comparable Sales Increase
13.4 Percent
Business Editors
NEW YORK--April 27, 2004--Barnes & Noble.com (Nasdaq:BNBN) (www.bn.com)
announced today that its comparable sales for first quarter 2004 were
$120.2 million, a 13.4 percent increase over the prior year period.
Comparable sales reflect the gross amount of used and out-of-print sales,
consistent with how these sales were recorded in the prior year period.
First quarter 2004 net sales increased 8.4 percent to $114.9 million
as compared with the first quarter of 2003.
The net loss for the first quarter was ($9.8) million, or ($0.06)
per share, a 25.6 percent improvement from a net loss of ($13.1)
million, or ($0.08) per share for the first quarter of 2003. EBITDA
loss (loss before interest, taxes, depreciation and amortization) for
the first quarter of 2004 was ($3.7) million, a 36.8 percent
improvement, as compared with an EBITDA loss of ($5.9) million in
the first quarter of 2003.(1)
During first quarter 2004, the company continued reducing and
leveraging its expense base. Total operating expenses decreased 4.7
percent quarter over quarter and decreased as a percentage of net
sales to 32.6 percent in the first quarter 2004 from 37.1 percent in
the first quarter 2003.
"We are extremely pleased with our first-quarter results," said
Marie Toulantis, chief executive officer of Barnes & Noble.com. "We
realized strong sales momentum in the quarter with a comparable sales
increase of 13.4 percent, and we enter the second quarter well
positioned to reach our target of full-year EBITDA profitability."
Second Quarter 2004 Outlook
Net sales are expected to range between $85 million and $95
million, resulting in a net loss per share of ($0.06) to ($0.08).
Full-Year 2004 Outlook
Net sales are expected to range between $435 million and $475
million, resulting in a net loss per share of ($0.13) to ($0.18).
Merger Update
Barnes & Noble.com expects to file a definitive proxy statement
with the Securities and Exchange Commission regarding the proposed
merger with a subsidiary of Barnes & Noble, Inc. by Monday, May 3,
2004.
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
approximately 18 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 first quarter 2004 EBITDA loss of ($3.7) million consisted
of a net loss of ($9.8) million before interest income of $0.09
million and depreciation and amortization of ($6.1) million. The first
quarter 2003 EBITDA loss of ($5.9) million consisted of a net loss of
($13.1) million before interest income of $0.14 million and
depreciation and amortization of ($7.3) 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.
barnesandnoble.com inc.
Consolidated Statements of Operations
(thousands of dollars, except per share data)
(unaudited)
Three Months Ended
-------------------------------------
March 31, March 31,
2004 2003
------------- -------------
Net sales $ 114,893 $ 105,964
Cost of sales 87,319 79,968
------------ --------------
Gross profit 27,574 25,996
------------ --------------
Operating expenses:
Fulfillment and customer service 9,654 9,005
Marketing, sales and editorial 7,746 9,129
Technology and web site
development 7,664 7,390
General and administrative 6,250 6,392
Depreciation and amortization 6,122 7,354
------------ --------------
Total operating expenses 37,436 39,270
------------ --------------
Operating loss (9,862) (13,274)
Interest income, net 89 137
------------ --------------
Net loss $ (9,773) $ (13,137)
============ ==============
Basic and diluted net loss per
common share ($0.06) ($0.08)
Average shares
(diluted -- if converted) (1) 163,315 158,802
(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 Statements of Operations (continued)
(thousands of dollars, except per share data)
(unaudited)
Three Months Ended
-------------------------------------
March 31, March 31,
2004 2003
------------ ------------
Percent of sales:
Gross margin 24.0% 24.5%
Operating expenses:
Fulfillment and customer service 8.4 8.5
Marketing, sales and editorial 6.7 8.6
Technology and web site
development 6.7 7.0
General and administrative 5.4 6.0
Depreciation and amortization 5.3 6.9
----------- -------------
Total operating expenses 32.6 37.1
----------- -------------
Operating loss (8.6) (12.5)
Interest income, net 0.1 0.1
----------- -------------
Net loss (8.5)% (12.4)%
=========== =============
barnesandnoble.com inc.
Consolidated Balance Sheets
(thousands of dollars, except share and per share data)
Restated
March 31, December 31,
2004 2003
------------ --------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 28,803 $ 68,344
Receivables, net 5,171 5,368
Merchandise inventories 45,024 57,900
Prepaid expenses and other
current assets 4,550 4,072
------------ --------------
Total current assets 83,548 135,684
------------ --------------
Fixed assets, net 59,711 61,874
Goodwill 102,137 102,137
Trade name 44,700 44,700
Intangible assets, net 2,546 3,500
Other non-current assets 114 23
------------ --------------
Total assets $ 292,756 $ 347,918
============ ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 10,861 $ 13,277
Accrued liabilities 53,362 77,197
Payable to affiliate 52,689 71,957
------------ --------------
Total current liabilities 116,912 162,431
------------ --------------
Minority interest 165,223 172,516
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; 48,320,237
and 48,280,087 shares issued
and outstanding 48 48
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 191,001 190,966
Accumulated deficit (180,428) (178,043)
------------- --------------
Total stockholders' equity 10,621 12,971
------------ --------------
Total liabilities and
stockholders' equity $ 292,756 $ 347,918
============ ==============
CONTACT: Barnes & Noble.com
Carolyn Brown, 212-633-4062
cbrown@bn.com
or
Kevin Frain, 212-414-6093
kfrain@book.com