Barnes & Noble Achieves EPS Guidance of $2.07 for 2003.Business Editors NEW YORK--(BUSINESS WIRE)--March 18, 2004 Barnes Barnes, former municipal borough, SE England. See Richmond upon Thames. & Noble, Inc. (NYSE NYSE See: New York Stock Exchange : BKS BKS Barracks BKS Best Kept Secret (gaming) BKS Bildung, Kultur Und Sport (German) BKS Brookside (city) BKS Bergen Kirurgiske Sykehus (Bergen, Norway) ) Issues 2004 Guidance: Pro Forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma Net Earnings to Increase 22% to 26% GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). Net Earnings to Increase 11% to 15% Barnes & Noble, Inc. (NYSE: BKS), the world's largest bookseller, today reported sales and earnings for the fourth quarter and for the full year ended January January: see month. 31, 2004. 2003 RESULTS Barnes & Noble store sales were $1.3 billion for the quarter and $3.9 billion for the year, reflecting increases of 10% and 8%, respectively, over the prior year periods. Comparable store sales increased 6.4% for the fourth quarter and increased 3.2% for the year. The company opened 31 new Barnes & Noble stores for the year and closed 12 locations ending the year with 647 stores. B. Dalton Dalton, city (1990 pop. 21,761), seat of Whitfield co., extreme NW Ga., in the Appalachian valley; inc. 1847. It is a highly industrialized city in a farm area. sales, which comprise To embrace, cover, or include; to confine within; to consist of. In the law governing patents—grants of an exclusive right or privilege to make, use, or sell an invention or product for a term of years—the term comprise approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 5% of total bookstore sales, were $79.7 million for the quarter, a decrease of (10%) over the prior year, and $221.0 million for the year, a decrease of (15%) over 2002, due primarily to the closing of 63 stores. Comparable store sales increased 4.1% for the fourth quarter and decreased (2.0%) for the year. Earnings per share for the bookstore business, including publishing, increased 9% to $1.40 during the fourth quarter and increased 15% to $1.75 for the full year. Led by strong working capital management, the bookstore business generated free cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses of $290 million which is net of $93 million of capital expenditures. This robust cash flow enabled the company to prepay pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. its $82 million note to Bertelsmann For the foundation, see .Bertelsmann AG is a transnational media corporation founded in 1835, based in Gütersloh, Germany. The company operates in 63 countries and employs over 100,000 workers (as of June 30, 2007). In 2006 the company reported a € 19. , which was issued in connection with the company's acquisition of Bertelsmann's interest in Barnes & Noble.com. Inventory turns improved approximately 5% due to increased emphasis on more efficient supply chain management. On January 29, 2004, Barnes & Noble.com reported a fourth quarter sales increase of 4.3%, as compared with the year-ago period. Full year 2003 sales were $424.8 million. The company's share of net losses for Barnes & Noble.com was $(3.8) million or $(0.05) per share for the quarter and $(13.6) million or $(0.18) per share for the year. Barnes & Noble.com's results were accounted for under the equity accounting method up to September September: see month. 15, 2003, and were consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: thereafter. On March 17, 2004, GameStop GameStop Corporation (NYSE: GME), headquartered in Grapevine, Texas, a suburb of Dallas, is the world's largest video game and entertainment software retailer. The company operates over 4,900 retail stores throughout Japan, U.S. , the nation's largest video-game and entertainment-software specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. retailer, reported sales of $625.4 million for the quarter and $1.6 billion for the year, an increase of 20% and 17%, respectively, over the prior year periods. Comparable store sales increased 3.9% for the fourth quarter and increased 0.8% for the year. The company's share of net earnings was $24.1 million or $0.30 per share for the fourth quarter and $38.2 million or $0.50 per share for the year. Consolidated net earnings for the fourth quarter increased 17% to $130.0 million or $1.65 per share. Consolidated net earnings for the year increased 21% to $151.9 million or $2.07 per share compared to $1.71 in the prior year, excluding charges of $(0.32) recorded in 2002 to write down certain of the company's investments. "Although 2003 began as a difficult year, with the first quarter being strongly impacted by the war in Iraq Iraq or Irak (both: ēräk`, ĭrăk`), officially Republic of Iraq, republic (2005 est. pop. 26,075,000), 167,924 sq mi (434,924 sq km), SW Asia. , we were extremely pleased with the rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective in the bookselling Book´sell`ing n. 1. The employment of selling books. business that began during the second quarter," said Steve v. t. 1. To pack or stow, as cargo in a ship's hold. See Steeve. Riggio, Chief Executive Officer of Barnes & Noble, Inc. "Barnes & Noble's superior store execution enabled the company to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the strength of the book business when it returned. The tremendous success of bestsellers, combined with the continued growth of the membership program, enabled the company to increase its market share. The company also achieved a double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. percentage increase in sales of self-published self-pub·lished adj. Having one's writings published by oneself: a self-published memoir; a self-published poet. product. We look forward to the completion of the merger with Barnes & Noble.com, which will further integrate our two companies, and enable us to more fully realize the opportunities inherent in a multi-channel See multichannel. strategy." GUIDANCE FOR 2004 For the first quarter, the company expects comparable store sales at Barnes & Noble stores to increase between 5.0% and 7.0%, and for the full year comparable store sales are expected to increase approximately 2.0%. On January 8, 2004, the company announced that it entered into a merger agreement with Barnes & Noble.com. As a result of the merger, Barnes & Noble.com will become a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of Barnes & Noble, Inc. Barnes & Noble, Inc. expects to complete the acquisition of Barnes & Noble.com during the company's first quarter. For the first quarter, GameStop expects comparable store sales to range from flat to 2.0%, and for the full year comparable store sales are expected to increase between 4.0% and 6.0%. Consolidated net earnings are expected to be between $168 and $174 million, or an increase of 11% to 15% on a GAAP basis. On a pro forma basis, if the company consolidated 100% of Barnes & Noble.com for all of 2003, net earnings are expected to increase 22% to 26%. The following tables present EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. guidance for the first quarter and the full year. EPS guidance for GameStop is based on the company's approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. 65% ownership interest.
FIRST QUARTER EPS 2004 Guidance(a) 2003
----------------- --------------------
Low High Pro Forma(b)
-------- ---------- ------------
Barnes & Noble Bookstores $ 0.13 $ 0.16 $(0.05)
Barnes & Noble.com (0.11) (0.09) (0.12)
-------- ---------- ------------
Total Book Operating Segment 0.02 0.07 (0.17)
Total Video Game Operating
Segment 0.07 0.07 0.06
-------- ---------- ------------
Consolidated $ 0.09 $ 0.14 $(0.11)
FULL YEAR EPS 2004 Guidance(c) 2003
------------- --------------------
Low High Pro Forma(b)
-------- ---------- ------------
Barnes & Noble Bookstores(d) $ 1.88 $ 1.90 $ 1.75
Barnes & Noble.com (0.21) (0.18) (0.35)
-------- ---------- ------------
Total Book Operating Segment(d) 1.67 1.72 1.40
Total Video Game Operating
Segment 0.53 0.55 0.50
-------- ---------- ------------
Consolidated(d) $ 2.20 $ 2.27 $ 1.90
(a) Based on a weighted average share count of approximately 71
million.
(b) Pro forma as if the company consolidated 100% of Barnes &
Noble.com for the full year.
(c) Based on a weighted average share count of approximately 81
million.
(d) Includes the impact of $10.2 million interest addback on the
convertible notes.
A conference call with Barnes & Noble, Inc.'s senior management will be webcast beginning at 11 A.M. ET on Thursday Thursday: see week. , March 18, 2004, and is accessible at www.barnesandnobleinc.com/financials, where it will be archived until April 23, 2004. The call will also be archived at www.fulldisclosure.com for one year. Barnes & Noble, Inc. will report first quarter sales and earnings on or about May 20, 2004. ABOUT BARNES & NOBLE, INC. Barnes & Noble, Inc. (NYSE: BKS) is the world's largest bookseller, operating 647 Barnes & Noble stores in 49 states. It also operates 195 B. Dalton Bookseller stores, primarily in regional shopping malls shopping mall or shopping centre Collection of independent retail stores, services, and parking areas constructed and maintained by a management firm as a unit. It is a 20th-century adaptation of the historical marketplace. In the U.S. . 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 e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. business through Barnes & Noble.com (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : BNBN) (http://www.bn.com). Barnes & Noble also has approximately a 65% interest in GameStop (NYSE: GME GME granulomatous meningoencephalitis. GME Graduate medical education, see there ), the nation's largest video game and entertainment software specialty retailer with 1,514 stores. General financial information on Barnes & Noble, Inc. can be obtained via the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the by visiting the company's corporate Web site: http://www.barnesandnobleinc.com/financials. SAFE HARBOR Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. This press release contains "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. ." 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 The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a 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 MERCHANDISE. By this term is understood all those things which merchants sell either wholesale or retail, as dry goods, hardware, groceries, drugs, &c. It is usually applied to personal chattels only, and to those which are not required for food or immediate support, but such as remain or occupancy costs Occupancy costs are the whole life costs of buildings and their associated land from occupancy until disposal. These costs may be incurred on a regular or irregular basis. Occupancy costs are those costs related to occupying a space including; rent, real estate taxes, personal , unanticipated adverse litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called 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
Fourth Quarter Summary
($ in millions, except per share amounts)
13 weeks ended 52 weeks ended
---------------- ----------------
Jan. 31, Feb. 1, Jan. 31, Feb. 1,
2004 2003 2004 2003
-------- ------- -------- -------
Sales
Barnes & Noble Bookstores (a) $1,454 1,326 4,221 3,917
Barnes & Noble.com (b) 133 - 151 -
-------- ------- -------- -------
Total Book operating segment 1,587 1,326 4,372 3,917
GameStop
Total Video Game operating
segment 625 520 1,579 1,353
-------- ------- -------- -------
Total sales 2,212 1,846 5,951 5,270
-------- ------- -------- -------
Operating profit (loss)
Barnes & Noble Bookstores (a) 194 164 233 202
Barnes & Noble.com (b) (6) - (7) -
-------- ------- -------- -------
Total Book operating segment 188 164 226 202
GameStop
Total Video Game operating
segment 65 53 104 87
-------- ------- -------- -------
Total operating profit (loss) 253 217 330 289
-------- ------- -------- -------
Depreciation and amortization
Barnes & Noble Bookstores (a) 31 32 128 126
Barnes & Noble.com (b) 6 - 7 -
-------- ------- -------- -------
Total Book operating segment 37 32 135 126
GameStop
Total Video Game operating
segment 8 6 29 23
-------- ------- -------- -------
Total depreciation and
amortization 45 38 164 149
-------- ------- -------- -------
EBITDA (Operating profit (loss) +
depreciation and amortization)
Barnes & Noble Bookstores (a) 225 196 361 328
Barnes & Noble.com (b) - - - -
-------- ------- -------- -------
Total Book operating segment 225 196 361 328
GameStop
Total Video Game operating
segment (c) 47 37 85 70
-------- ------- -------- -------
Total EBITDA 272 233 446 398
-------- ------- -------- -------
EPS
Barnes & Noble Bookstores (a) 1.40 1.28 1.75 1.52
Barnes & Noble.com (d) (0.05) (0.04) (0.18) (0.21)
-------- ------- -------- -------
Total Book operating segment 1.35 1.24 1.57 1.31
GameStop
Total Video Game operating
segment (c) 0.30 0.25 0.50 0.40
Gemstar impairment charge - - - (0.19)
Other investments - - - (0.13)
-------- ------- -------- -------
Total EPS $1.65 1.49 2.07 1.39
-------- ------- -------- -------
Weighted average shares
outstanding 79,514 75,245 77,105 77,680
(a) Includes Calendar Club and Sterling Publishing. Operating
profit and EBITDA excludes non-cash charge recorded in the
first quarter of 2002 from the impairment in the company's
investment in Gemstar-TV Guide International Inc.
(b) From date of acquisition of Bertelsmann's interest.
(c) Based on Barnes & Noble, Inc.'s percentage ownership interest
in GameStop, approximately 65%.
(d) Results accounted for under the equity method through
September 15, 2003, and consolidated thereafter.
BARNES & NOBLE, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(thousands of dollars, except per share data)
----------------------------------------------------------------------
13 weeks ended 52 weeks ended
----------------------- -----------------------
January 31, February 1, January 31, February 1,
2004 2003 2004 2003
----------- ----------- ----------- -----------
Sales $2,212,095 1,846,110 5,951,015 5,269,335
Cost of sales and
occupancy 1,570,714 1,307,735 4,323,767 3,847,482
----------- ----------- ----------- -----------
Gross profit 641,381 538,375 1,627,248 1,421,853
----------- ----------- ----------- -----------
Selling and
administrative
expenses 341,632 281,490 1,124,551 973,495
Depreciation and
amortization 44,851 38,339 163,629 148,691
Pre-opening expenses 1,632 2,150 8,778 10,227
Impairment charge - - - 25,328
----------- ----------- ----------- -----------
Operating profit 253,266 216,396 330,290 264,112
Interest expense, net (5,357) (5,536) (20,140) (21,506)
Equity in net loss of
Barnes & Noble.com - (5,568) (14,311) (26,795)
Other expense, net - - - (16,498)
----------- ----------- ----------- -----------
Income before taxes
and minority
interest 247,909 205,292 295,839 199,313
Income taxes 101,262 82,634 120,554 80,223
----------- ----------- ----------- -----------
Income before
minority interest 146,647 122,658 175,285 119,090
Minority interest (16,604) (11,647) (23,432) (19,142)
----------- ----------- ----------- -----------
Net income 130,043 111,011 151,853 99,948
=========== =========== =========== ===========
Income per common
share:
Basic $1.92 1.72 2.30 1.51
Diluted $1.65 1.49 2.07 1.39
Weighted average common
shares outstanding
Basic 67,575,000 64,578,000 65,989,000 66,362,000
Diluted 79,514,000 75,245,000 77,105,000 77,680,000
Percentage of sales:
Sales 100.0% 100.0% 100.0% 100.0%
Cost of sales and
occupancy 71.0% 70.8% 72.7% 73.0%
----------- ----------- ----------- -----------
Gross profit 29.0% 29.2% 27.3% 27.0%
----------- ----------- ----------- -----------
Selling and
administrative
expenses 15.4% 15.3% 18.9% 18.5%
Depreciation and
amortization 2.0% 2.1% 2.7% 2.8%
Pre-opening expenses 0.1% 0.1% 0.1% 0.2%
Impairment charge 0.0% 0.0% 0.0% 0.5%
----------- ----------- ----------- -----------
Operating profit 11.5% 11.7% 5.6% 5.0%
Interest expense, net -0.3% -0.3% -0.4% -0.4%
Equity in net loss of
Barnes & Noble.com 0.0% -0.3% -0.2% -0.5%
Other expense, net 0.0% 0.0% 0.0% -0.3%
----------- ----------- ----------- -----------
Income before taxes
and minority
interest 11.2% 11.1% 5.0% 3.8%
Income taxes 4.6% 4.5% 2.0% 1.5%
----------- ----------- ----------- -----------
Income before
minority interest 6.6% 6.6% 3.0% 2.3%
Minority interest -0.7% -0.6% -0.4% -0.4%
----------- ----------- ----------- -----------
Net income 5.9% 6.0% 2.6% 1.9%
=========== =========== =========== ===========
BARNES & NOBLE, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(thousands of dollars, except per share data)
----------------------------------------------------------------------
Jan. 31, Feb. 1,
2004 2003
----------- ----------
ASSETS
Current assets:
Cash and cash equivalents $487,200 267,642
Receivables, net 60,529 66,948
Barnes & Noble.com receivable - 55,174
Merchandise inventories 1,526,156 1,395,872
Prepaid expenses and other current
assets 119,604 101,232
----------- ----------
Total current assets 2,193,489 1,886,868
----------- ----------
Property and equipment:
Land and land improvements 3,247 3,247
Buildings and leasehold improvements 533,272 495,499
Fixtures and equipment 1,127,855 936,136
----------- ----------
1,664,374 1,434,882
Less accumulated depreciation and
amortization 991,187 812,579
----------- ----------
Net property and equipment 673,187 622,303
----------- ----------
Goodwill 572,206 (a) 390,396
Intangible assets, net 46,374 48,176
Investment in Barnes & Noble.com - 23,280
Other noncurrent assets 23,338 24,404
----------- ----------
Total assets $3,508,594 2,995,427
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $858,068 710,907
Accrued liabilities 585,073 520,541
----------- ----------
Total current liabilities 1,443,141 1,231,448
----------- ----------
Long-term debt 300,000 300,000
Deferred income taxes 170,066 119,823
Other long-term liabilities 108,441 115,415
Minority interest 227,287 200,951
Shareholders' equity:
Common stock; $.001 par value;
300,000,000 shares authorized;
76,854,856 and 73,110,740
shares issued, respectively 77 73
Additional paid-in capital 914,319 828,522
Accumulated other comprehensive loss (8,579) (11,064)
Retained earnings 543,503 391,650
Treasury stock, at cost, 8,807,700
and 8,502,700 shares, respectively (189,661) (181,391)
----------- ----------
Total shareholders' equity 1,259,659 1,027,790
----------- ----------
Commitments and contingencies - -
----------- ----------
Total liabilities and shareholders'
equity $3,508,594 2,995,427
=========== ==========
(a) Includes approximately $165 million of goodwill resulting from
the September 15, 2003 acquisition of Barnes & Noble.com which
is subject to final allocation based upon an independent
valuation being performed in accordance with Statement of
Financial Accounting Standard No. 141.
BARNES & NOBLE, INC. AND SUBSIDIARIES
Fourth Quarter Summary
Pro Forma as if the Company Owned 100% of Barnes & Noble.com
at the Beginning of Fiscal 2002
($ in millions, except per share amounts)
13 weeks ended 52 weeks ended
---------------- ----------------
Jan. 31, Feb. 1, Jan. 31, Feb. 1,
2004 2003 2004 2003
-------- ------- -------- -------
Sales
Barnes & Noble Bookstores (a) $1,454 1,326 4,221 3,917
Barnes & Noble.com (b) 133 128 425 423
-------- ------- -------- -------
Total Book operating segment 1,587 1,454 4,646 4,340
GameStop
Total Video Game operating
segment 625 520 1,579 1,353
-------- ------- -------- -------
Total sales 2,212 1,974 6,225 5,693
-------- ------- -------- -------
Operating profit (loss)
Barnes & Noble Bookstores (a) 194 164 233 202
Barnes & Noble.com (b) (6) (15) (45) (72)
-------- ------- -------- -------
Total Book operating segment 188 149 188 130
GameStop
Total Video Game operating
segment 65 53 104 87
-------- ------- -------- -------
Total operating profit (loss) 253 202 292 217
-------- ------- -------- -------
Depreciation and amortization
Barnes & Noble Bookstores (a) 31 32 128 126
Barnes & Noble.com (b) 6 9 26 34
-------- ------- -------- -------
Total Book operating segment 37 41 154 160
GameStop
Total Video Game operating
segment 8 6 29 23
-------- ------- -------- -------
Total depreciation and
amortization 45 47 183 183
-------- ------- -------- -------
EBITDA (Operating profit (loss) +
depreciation and amortization)
Barnes & Noble Bookstores (a) 225 196 361 328
Barnes & Noble.com (b) - (6) (19) (38)
-------- ------- -------- -------
Total Book operating segment 225 190 342 290
GameStop
Total Video Game operating
segment (c) 47 37 85 70
-------- ------- -------- -------
Total EBITDA 272 227 427 360
-------- ------- -------- -------
EPS
Barnes & Noble Bookstores (a) 1.40 1.28 1.75 1.52
Barnes & Noble.com (0.05) (0.11) (0.35) (0.57)
-------- ------- -------- -------
Total Book operating segment 1.35 1.17 1.40 0.95
GameStop
Total Video Game operating
segment (c) 0.30 0.25 0.50 0.40
Gemstar impairment charge - - - (0.19)
Other investments - - - (0.13)
-------- ------- -------- -------
Total EPS $1.65 1.42 1.90 1.03
-------- ------- -------- -------
Weighted average shares
outstanding 79,514 75,245 77,105 77,680
(a) Includes Calendar Club and Sterling Publishing. Operating
profit and EBITDA excludes non-cash charge recorded in
the first quarter of 2002 from the impairment in the company's
investment in Gemstar-TV Guide International Inc.
(b) For pro forma purposes only, the company has included 100% of
the results of Barnes & Noble.com for all periods presented.
(c) Based on Barnes & Noble, Inc.'s percentage ownership interest
in GameStop, approximately 65%.
BARNES & NOBLE, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
Pro Forma as if the Company Owned 100% of Barnes & Noble.com
at the Beginning of Fiscal 2002
(thousands of dollars, except per share data)
----------------------------------------------------------------------
13 weeks ended 52 weeks ended
----------------------- -----------------------
Jan. 31, Feb. 1, Jan. 31, Feb. 1,
2004 2003 2004 2003
----------- ----------- ----------- -----------
Sales $2,212,095 1,973,990 6,224,601 5,692,162
Cost of sales and
occupancy 1,570,714 1,410,222 4,537,294 4,184,980
----------- ----------- ----------- -----------
Gross profit 641,381 563,768 1,687,307 1,507,182
----------- ----------- ----------- -----------
Selling and
administrative
expenses 341,632 313,243 1,203,192 1,097,075
Depreciation and
amortization 44,851 46,888 182,903 182,193
Pre-opening expenses 1,632 2,150 8,778 10,227
Impairment charge - - - 25,328
----------- ----------- ----------- -----------
Operating profit 253,266 201,487 292,434 192,359
Interest expense, net (5,357) (5,316) (19,973) (19,891)
Equity in net loss of
Barnes & Noble.com - - - -
Other expense, net - (358) - (20,035)
----------- ----------- ----------- -----------
Income before taxes
and minority
interest 247,909 195,813 272,461 152,433
Income taxes 101,262 78,815 111,028 61,354
----------- ----------- ----------- -----------
Income before
minority interest 146,647 116,998 161,433 91,079
Minority interest (16,604) (11,647) (23,432) (19,142)
----------- ----------- ----------- -----------
Net income 130,043 105,351 138,001 71,937
=========== =========== =========== ===========
Income per common
share:
Basic $1.92 1.63 2.09 1.08
Diluted $1.65 1.42 1.90 1.03
Weighted average common
shares outstanding
Basic 67,575,000 64,578,000 65,989,000 66,362,000
Diluted 79,514,000 75,245,000 77,105,000 77,680,000
Percentage of sales:
Sales 100.0% 100.0% 100.0% 100.0%
Cost of sales and
occupancy 71.0% 71.4% 72.9% 73.5%
----------- ----------- ----------- -----------
Gross profit 29.0% 28.6% 27.1% 26.5%
----------- ----------- ----------- -----------
Selling and
administrative
expenses 15.4% 15.9% 19.3% 19.3%
Depreciation and
amortization 2.0% 2.4% 2.9% 3.2%
Pre-opening expenses 0.1% 0.1% 0.2% 0.2%
Impairment charge 0.0% 0.0% 0.0% 0.4%
----------- ----------- ----------- -----------
Operating profit 11.5% 10.2% 4.7% 3.4%
Interest expense, net -0.2% -0.3% -0.3% -0.3%
Equity in net loss of
Barnes & Noble.com 0.0% 0.0% 0.0% 0.0%
Other expense, net 0.0% 0.0% 0.0% -0.4%
----------- ----------- ----------- -----------
Income before taxes
and minority
interest 11.3% 9.9% 4.4% 2.7%
Income taxes 4.6% 4.0% 1.8% 1.1%
----------- ----------- ----------- -----------
Income before
minority interest 6.7% 5.9% 2.6% 1.6%
Minority interest -0.8% -0.6% -0.4% -0.3%
----------- ----------- ----------- -----------
Net income 5.9% 5.3% 2.2% 1.3%
=========== =========== =========== ===========
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