Exhibit 99.1
Barnes & Noble Reports Preliminary 2006 Results:
Issues First Quarter 2007 Guidance
NEW YORK--(BUSINESS WIRE)--March 22, 2007--Barnes & Noble, Inc.
(NYSE: BKS), the world's largest bookseller, today reported sales and
preliminary financial results for the fourth quarter and the full year
ended February 3, 2007, which consisted of fourteen weeks and
fifty-three weeks, respectively.
2006 RESULTS
As previously reported, Barnes & Noble store sales were $1,549
million for the quarter and $4,534 million for the full year.
Excluding the impact of the extra week in this year's fiscal calendar,
Barnes & Noble store sales increased 2% for the quarter and the full
year as compared to the same periods in fiscal 2005. Comparable store
sales decreased 0.1% for the quarter and 0.3% for the year.
B. Dalton store sales were $36 million for the quarter and $102
million for the full year. Excluding the impact of the extra week in
this year's fiscal calendar, B. Dalton store sales decreased 30% for
the quarter and 29% for the full year as compared to the same periods
in fiscal 2005, primarily due to the closing of 20 stores since the
fourth quarter of 2005. Comparable store sales decreased 7.5% for the
quarter and 6.1% for the year.
Barnes & Noble.com sales were $164 million for the quarter and
$433 million for the full year. Excluding the impact of the extra week
in this year's fiscal calendar, Barnes & Noble.com comparable sales
increased 5.1% for the quarter and decreased 1.1% for the full year as
compared to the same periods in fiscal 2005.
Consolidated sales were $1,878 million for the quarter and $5,261
million for the full year.
As previously announced, the company will close its Memphis,
Tennessee, Internet distribution center in 2007, and as a result, the
company incurred charges, net of tax benefits, of $2.2 million in
2006, or $0.03 per share, related to accelerated depreciation and
severance associated with the close-down of the Memphis facility.
Preliminary net earnings increased 3% to $127.0 million, or $1.84
per share for the fourth quarter, and increased 3% to $150.8 million,
or $2.18 per share, for the full year, in line with guidance updated
on March 5, 2007. The company has adopted Statement of Financial
Accounting Standards No. 123(R) (As Amended), "Share-Based Payment"
(SFAS 123(R)), and began expensing stock options at the beginning of
fiscal year 2006. Fourth quarter and full-year results include stock
compensation expenses of $0.03 per share and $0.14 per share,
respectively.
2007 GUIDANCE
The company expects first quarter comparable store sales at Barnes
& Noble stores to be flat to slightly positive, and as previously
announced, full-year comparable store sales are also expected to be
flat to slightly positive.
Barnes & Noble, Inc.'s first quarter loss is expected to be in a
range of $(0.08) to $(0.12) per share. The first quarter loss will
include charges, net of tax benefits, of $3.7 million, or $0.06 per
share, related to the previously mentioned closing of its Internet
distribution center. The first quarter loss will also include charges
related to legal expenses in the company's review of its stock option
practices, net of tax benefits, of between $3.0 million and $4.5
million, or $0.05 to $0.07 per share. Excluding these charges, first
quarter earnings (loss) per share are expected to be in a range of
$(0.01) to $0.05 per share.
As previously announced, Barnes & Noble, Inc.'s full-year earnings
are expected to be in a range of $1.49 to $1.67 per share. The
full-year earnings include expected charges, net of tax benefits, of
$4.9 million, or $0.07 per share, related to the closing of its
Internet distribution center. The full-year earnings also include
expected charges related to legal expenses in the company's review of
its stock option practices, net of tax benefits, of between $4 million
and $6 million, or $0.06 to $0.09 per share. Excluding these charges,
full-year earnings per share are expected to be in a range of $1.65 to
$1.80 per share.
The share count used in the computation of earnings per share is
based on a basic weighted average share count of 65.1 million shares
for the first quarter, and a fully diluted weighted average share
count of 70.0 million shares for the full year.
As of February 3, 2007, the company operated 695 Barnes & Noble
stores and 98 B. Dalton stores. During the fourth quarter, nine Barnes
& Noble stores were opened and six were closed. Eleven B. Dalton
stores were closed during the quarter.
REVIEW OF STOCK OPTION PRACTICES
The special committee of Barnes & Noble's Board of Directors and
its independent legal counsel have not yet finished their review of
the company's stock option practices. Accordingly, the company has not
yet determined the amount of any additional non-cash stock-based
compensation expense related to stock option grants that may be
recorded, and the preliminary results and guidance set forth herein do
not include any such additional charges and are subject to adjustment
based on the results of the internal review.
A conference call with Barnes & Noble, Inc.'s senior management
will be webcast beginning at 10:00 A.M. ET on Thursday, March 22,
2007, and is accessible at www.barnesandnobleinc.com/webcasts. The
call will also be archived at www.earnings.com for one year.
Barnes & Noble, Inc. will report first quarter earnings on or
about May 24, 2007.
ABOUT BARNES & NOBLE, INC.
Barnes & Noble, Inc. (NYSE: BKS), the world's largest bookseller
and a Fortune 500 company, operates 793 bookstores in 50 states. For
the fifth 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 online bookseller for quality among
e-commerce companies, according to the latest EquiTrend survey.
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, the results of the
internal review of the company's stock option practices and the
related inquiries by the Securities and Exchange Commission and the
U.S. Department of Justice and related stockholder derivative
lawsuits, 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 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)
- ----------------------------------------------------------------------
14 weeks 13 weeks 53 weeks 52 weeks
ended ended ended ended
--------------------------------- ----------
February 3, January February January
2007 28, 2006 3, 2007 28, 2006
--------------------------------------------
Sales $1,878,402 1,753,249 5,261,254 5,103,004
Cost of sales and
occupancy 1,259,407 1,176,720 3,622,962 3,535,837
----------- ---------- ---------- ----------
Gross profit 618,995 576,529 1,638,292 1,567,167
----------- ---------- ---------- ----------
Selling and
administrative expenses 351,049 317,727 1,201,261 1,131,448
Depreciation and
amortization 46,872 42,556 170,338 172,957
Pre-opening expenses 2,411 1,668 12,897 10,938
----------- ---------- ---------- ----------
Operating profit 218,663 214,578 253,796 251,824
Interest (income)
expense, net 1,645 496 1,537 (1,415)
----------- ---------- ---------- ----------
Income before taxes
and minority interest 220,308 215,074 255,333 250,409
Income taxes 88,499 87,643 102,772 102,042
----------- ---------- ---------- ----------
Income before minority
interest 131,809 127,431 152,561 148,367
Minority interest (4,831) (4,450) (1,788) (1,686)
----------- ---------- ---------- ----------
Net income $ 126,978 122,981 150,773 146,681
=========== ========== ========== ==========
Income per common share:
Basic $ 1.95 1.88 2.31 2.17
Diluted $ 1.84 1.76 2.18 2.03
Weighted average common
shares outstanding
Basic 65,095 65,374 65,212 67,560
Diluted 69,131 69,855 69,226 72,150
Percentage of sales:
Sales 100.0% 100.0% 100.0% 100.0%
Cost of sales and
occupancy 67.0% 67.1% 68.9% 69.3%
----------- ---------- ---------- ----------
Gross profit 33.0% 32.9% 31.1% 30.7%
----------- ---------- ---------- ----------
Selling and
administrative expenses 18.7% 18.1% 22.8% 22.2%
Depreciation and
amortization 2.5% 2.4% 3.2% 3.4%
Pre-opening expenses 0.1% 0.1% 0.2% 0.2%
----------- ---------- ---------- ----------
Operating profit 11.6% 12.2% 4.8% 4.9%
Interest (income)
expense, net 0.1% 0.0% 0.0% 0.0%
----------- ---------- ---------- ----------
Income before taxes
and minority interest 11.7% 12.3% 4.9% 4.9%
Income taxes 4.7% 5.0% 2.0% 2.0%
----------- ---------- ---------- ----------
Income before minority
interest 7.0% 7.3% 2.9% 2.9%
Minority interest -0.3% -0.3% 0.0% 0.0%
----------- ---------- ---------- ----------
Net income 6.8% 7.0% 2.9% 2.9%
=========== ========== ========== ==========
BARNES & NOBLE, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except per share data)
- ----------------------------------------------------------------------
February 3, January 28,
2007 2006
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 348,767 372,586
Receivables, net 100,467 99,117
Merchandise inventories 1,354,580 1,313,997
Prepaid expenses and other current assets 132,781 74,476
------------ ------------
Total current assets 1,936,595 1,860,176
------------ ------------
Property and equipment:
Land and land improvements 3,247 3,247
Buildings and leasehold improvements 990,058 984,535
Fixtures and equipment 1,310,026 1,174,973
------------ ------------
2,303,331 2,162,755
Less accumulated depreciation and
amortization 1,497,275 1,356,379
------------ ------------
Net property and equipment 806,056 806,376
------------ ------------
Goodwill 259,683 263,731
Intangible assets, net 91,176 93,834
Deferred taxes 140,318 114,046
Other noncurrent assets 13,342 25,969
------------ ------------
Total assets $3,247,170 3,164,132
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 792,977 828,852
Accrued liabilities 728,393 683,816
------------ ------------
Total current liabilities 1,521,370 1,512,668
------------ ------------
Long-term debt - -
Deferred taxes 192,050 158,035
Other long-term liabilities 364,002 367,531
Minority interest 10,660 10,057
Shareholders' equity:
Common stock; $.001 par value; 300,000
shares authorized; 84,608 and 83,370
shares issued, respectively 85 83
Additional paid-in capital 1,140,337 1,091,018
Accumulated other comprehensive loss (7,086) (9,085)
Retained earnings 623,457 512,594
Treasury stock, at cost, 19,520 and 16,690
shares, respectively (597,705) (478,769)
------------ ------------
Total shareholders' equity 1,159,088 1,115,841
------------ ------------
Commitments and contingencies - -
------------ ------------
Total liabilities and shareholders' equity $3,247,170 3,164,132
============ ============
CONTACT: Media:
Barnes & Noble, Inc.
Mary Ellen Keating, 212-633-3323
Senior Vice President
Corporate Communications
or
Investors:
Barnes & Noble, Inc.
Joseph J. Lombardi, 212-633-3215
Chief Financial Officer