Exhibit 99.1
Barnes & Noble Reports First Quarter Financial Results;
Achieves Earnings of $0.13 Per Share
NEW YORK--(BUSINESS WIRE)--May 17, 2005--Barnes & Noble, Inc.
(NYSE:BKS), the world's largest bookseller, today reported sales and
earnings for the first quarter ended April 30, 2005.
Net earnings from continuing operations increased 37% to $9.9
million or $0.13 per share, versus guidance of $0.11 to $0.13 per
share. Consolidated net earnings decreased $0.03 per share versus last
year due to the $0.06 per share earned from the company's investment
in GameStop in the first quarter a year ago, prior to the tax-free
spin-off of GameStop in the fourth quarter of 2004.
Comparable store sales at Barnes & Noble were 2.2% for the
quarter, in line with company guidance for a low single digit
increase.
Total first quarter sales were $1,097.2 million, increasing 4%
from $1,058.2 million a year ago. Barnes & Noble store sales were
$959.2 million, increasing 5% over the prior year. Barnes & Noble.com
sales were $91.4 million, decreasing (0.6%) from the prior year. B.
Dalton sales were $31.5 million, a decrease of (21%) over the prior
year, due primarily to store closings and a (0.3%) comparable store
sales decline.
As previously announced, the company completed a $250 million
share repurchase program and had a new $200 million share repurchase
program authorized during the first quarter. The company repurchased
approximately $75 million of shares in the first quarter under both
programs.
"We are pleased with the company's sales and earnings
performance," said Steve Riggio, chief executive officer of Barnes &
Noble, Inc. "The overall tone of business was as expected, and we
anticipate accelerated sales growth in the second quarter with the
arrival of the sixth Harry Potter book on July 16th."
As of April 30, 2005, the company operated 671 Barnes & Noble
stores and 150 B. Dalton stores. During the first quarter, seven
Barnes & Noble stores were opened and two were closed. B. Dalton
closed four stores during the quarter.
GUIDANCE
For the second quarter, the company expects comparable store sales
at Barnes & Noble stores to be in the mid-single digits. For the full
year, the company continues to expect comparable store sales to
increase approximately 3%. Sales at Barnes & Noble.com are expected to
increase at similar levels.
Barnes & Noble, Inc.'s second quarter earnings per share is
expected to be in a range of $0.19 to $0.21, and for the full year the
company continues to expect earnings per share to be in a range of
$1.94 to $1.98.
A conference call with Barnes & Noble, Inc.'s senior management
will be webcast beginning at 11:00 A.M. ET on Tuesday, May 17, 2005,
and is accessible at www.barnesandnobleinc.com/webcasts. The call will
also be archived at www.fulldisclosure.com for one year.
Barnes & Noble, Inc. will report second quarter earnings on or
about August 18, 2005.
ABOUT BARNES & NOBLE, INC.
Barnes & Noble, Inc. (NYSE:BKS), the world's largest bookseller
and a Fortune 500 company, operates 821 bookstores in 50 states. For
the third year in a row, the company is the nation's top retail brand
for quality, according to the EquiTrend(R) Brand Study by Harris
Interactive(R). Barnes & Noble conducts its online business through
Barnes & Noble.com (www.bn.com), one of the Web's largest e-commerce
sites and the number-one brand among e-commerce companies, according
to the latest EquiTrend survey. In addition to its retail operations,
Barnes & Noble is one of the largest book publishers in the world. Its
subsidiary, Sterling Publishing, publishes over 1,100 new titles a
year and has an active list of over 5,000 titles.
General information on Barnes & Noble, Inc. can be obtained via
the Internet by visiting the company's corporate Web site:
http://www.barnesandnobleinc.com.
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,
the successful and timely completion and integration of the company's
new New Jersey distribution center, 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
Consolidated Statements of Operations
(In thousands, except per share data)
- ----------------------------------------------------------------------
13 weeks ended
----------------------
April 30, May 1,
2005 2004
Restated
(a) (b)
----------- -----------
Sales $1,097,170 1,058,197
Cost of sales and occupancy 769,819 750,414
----------- ----------
Gross profit 327,351 307,783
----------- ----------
Selling and administrative expenses 266,059 244,434
Depreciation and amortization 43,311 44,925
Pre-opening expenses 2,447 2,648
----------- ----------
Operating profit 15,534 15,776
Interest expense, net (329) (4,497)
----------- ----------
Income before taxes and minority interest 15,205 11,279
Income taxes 6,196 4,587
----------- ----------
Income before minority interest 9,009 6,692
Minority interest 897 538
----------- ----------
Income from continuing operations 9,906 7,230
Income from discontinued operations (net of
income tax) - 4,215
----------- ----------
Net income $9,906 11,445
=========== ==========
Basic income per common share:
Income from continuing operations $0.14 0.11
Income from discontinued operations - 0.06
----------- ----------
Net income $0.14 0.17
=========== ==========
Diluted income per common share:
Income from continuing operations $0.13 0.10
Income from discontinued operations - 0.06
----------- ----------
Net income $0.13 0.16
=========== ==========
Weighted average common shares outstanding
Basic 69,722 68,146
Diluted 74,400 70,717
Percentage of sales:
Sales 100.0% 100.0%
Cost of sales and occupancy 70.2% 70.9%
----------- ----------
Gross profit 29.8% 29.1%
----------- ----------
Selling and administrative expenses 24.2% 23.1%
Depreciation and amortization 3.9% 4.2%
Pre-opening expenses 0.2% 0.3%
----------- ----------
Operating profit 1.4% 1.5%
Interest expense, net 0.0% -0.4%
----------- ----------
Income before taxes and minority interest 1.4% 1.1%
Income taxes 0.6% 0.4%
----------- ----------
Income before minority interest 0.8% 0.6%
Minority interest 0.1% 0.1%
----------- ----------
Income from continuing operations 0.9% 0.7%
=========== ==========
(a) Restated to reflect certain adjustments relating to
lease accounting.
(b) Reflects the change in the reporting period used to consolidate
the results of Barnes & Noble.com.
BARNES & NOBLE, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except per share data)
- ----------------------------------------------------------------------
April 30, May 1, 2004 January 29,
2005 Restated 2005
(a)(b)
----------- ---------- -----------
ASSETS
Current assets:
Cash and cash equivalents $322,095 177,701 535,652
Receivables, net 94,292 45,225 74,640
Merchandise inventories 1,307,421 1,314,306 1,274,578
Prepaid expenses and other
current assets 125,733 101,744 85,140
Current assets of discontinued
operations - 388,818 -
----------- ---------- ----------
Total current assets 1,849,541 2,027,794 1,970,010
Property and equipment:
Land and land improvements 3,247 3,247 3,247
Buildings and leasehold
improvements 958,827 875,238 940,616
Fixtures and equipment 1,083,330 1,017,296 1,081,966
----------- ---------- ----------
2,045,404 1,895,781 2,025,829
Less accumulated depreciation and
amortization 1,250,446 1,105,747 1,221,169
----------- ---------- ----------
Net property and equipment 794,958 790,034 804,660
----------- ---------- ----------
Goodwill 267,311 175,775 268,379
Intangible assets, net 96,196 93,222 97,538
Deferred taxes 123,682 83,248 123,231
Other noncurrent assets 36,881 21,386 37,710
Noncurrent assets of discontinued
operations - 458,842 -
----------- ---------- ----------
Total assets $3,168,569 3,650,301 3,301,528
=========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $729,779 640,706 745,073
Accrued liabilities 496,852 404,101 580,509
Current liabilities of
discontinued operations - 205,545 -
----------- ---------- ----------
Total current liabilities 1,226,631 1,250,352 1,325,582
Long-term debt 245,000 300,000 245,000
Deferred income taxes 193,743 162,737 193,743
Other long-term liabilities 370,812 362,605 362,319
Noncurrent liabilities of
discontinued operations - 298,680 -
Minority interest 8,044 18,873 8,942
Shareholders' equity:
Common stock; $.001 par value;
300,000 shares authorized;
80,270, 77,213 and 79,276
shares issued, respectively 80 77 79
Additional paid-in capital 1,007,922 926,944 985,609
Accumulated other comprehensive
loss (9,781) (8,775) (9,857)
Retained earnings 396,040 534,831 386,134
Treasury stock, at cost, 11,162,
9,008 and 9,008 shares,
respectively (269,922) (196,023) (196,023)
----------- ---------- ----------
Total shareholders' equity 1,124,339 1,257,054 1,165,942
----------- ---------- ----------
Commitments and contingencies - - -
----------- ---------- ----------
Total liabilities and
shareholders' equity $3,168,569 3,650,301 3,301,528
=========== ========== ==========
(a) Restated to reflect certain adjustments relating to lease
accounting.
(b) Reflects the change in the reporting period used to consolidate
the results of Barnes & Noble.com.
CONTACT: Barnes & Noble, Inc.
Media Contact:
Mary Ellen Keating, Senior Vice President,
Corporate Communications, 212-633-3323
or
Investor Contact:
Joseph J. Lombardi, Chief Financial Officer, 212-633-3215