Barnes & Noble.Com Consumer Sales up 4.7 Percent; EPS Exceeds Forecast.Business Editors NEW YORK--(BUSINESS WIRE)--April 30, 2003 Barnes Barnes, former municipal borough, SE England. See Richmond upon Thames. & Noble.com (Nasdaq: BNBN) (www.bn.com) announced today that the company's first-quarter sales of books, music and DVD/video direct to consumers increased 4.7 percent to $99.5 million; 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: sales were $106.0 million, in line with the company's estimates. The net loss for the first quarter was ($13.1) million, or ($0.08) per share, exceeding the company's previous forecast of an 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. loss of ($0.10) to ($0.12) per share. The first-quarter results represent a 36.0 percent improvement from a net loss of ($20.5) million, or ($0.13) per share, in the first quarter of 2002. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become loss (loss before interest, taxes, depreciation, amortization and equity losses) declined to ($5.9) million, a 52.8 percent improvement from the first quarter 2002 EBITDA loss of ($12.6) million. The gross margin improved to 24.5 percent from 21.7 percent in the comparable period last year due to an increase in the company's internal fulfillment ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. rate and the more efficient utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be of shipping providers. The company continues to reduce and leverage its operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. base. Increased operating efficiencies and greater cost control measures across the company's most significant expense categories led to lower expenses quarter over quarter, in both absolute dollars and as a percentage of sales. Total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. decreased 11.4 percent quarter over quarter and improved as a percentage of sales to 37.1 percent from 41.6 percent. "We are pleased with our first-quarter results as we made significant progress towards our goal of profitability," said Marie Toulantis, chief executive officer of Barnes & Noble.com. "Despite a difficult retail environment, we achieved solid sales growth in our core consumer business, significantly increased our gross margin, reduced operating expenses and improved our bottom line." Second Quarter In April, Barnes & Noble.com launched a new and improved offering for its used and out-of-print book service. Through the Barnes & Noble.com web site, customers are able to buy directly from a network comprised of thousands of independent third-party book dealers located around the world. The new service, called Barnes & Noble BookQuest, offers more than 30 million used and out-of-print book listings available for sale and direct delivery to customers by the dealers in the network. The company receives a commission on each sale from the third-party sellers. Since the company is acting as an agent to facilitate these sales, commissions earned are included in reported net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight . Previously, the company recorded the full amount of the sale, and the related costs, when selling used and out-of-print books. This change in the used and out-of-print business will result in lower net sales going forward. However, due to greater efficiencies inherent in the new process, the company expects the lower sales to have a slightly positive to neutral effect on the bottom line. The effect on sales will be a decrease of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $5 million per quarter. For the second quarter, net sales are expected to range between $80 million to $85 million, resulting in a net loss per share of ($0.10) to ($0.12). This compares with second-quarter 2002 sales of $85.8 million and a net loss per share of ($0.13). Full Year Full-year 2003 net sales are expected to be between $415 million and $450 million, generating an EBITDA loss between ($16.0) million and ($20.0) million, and a net loss per share of ($0.28) to ($0.34). The EBITDA and net loss per share guidance remains unchanged from the company's previous forecasts. 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 14.4 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 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 release may contain 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. 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 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 usage and 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. , 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 Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the of interest rates, the performance of the company's new product initiatives, the successful integration of acquired businesses, 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, 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 ReVisions is a 2004 anthology of alternate history short-stories. It is edited by Julie E. Czerneda and Isaac Szpindel. Contents Title Author The Resonance of Light James Alan Gardner Out of China Julie E. 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 CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or on which any such statement is based. Should one or more of these risks or uncertainties materialize ma·te·ri·al·ize v. ma·te·ri·al·ized, ma·te·ri·al·iz·ing, ma·te·ri·al·iz·es v.tr. 1. To cause to become real or actual: By building the house, we materialized a dream. , or should underlying assumptions prove incorrect Incorrect means to not be correct and may also refer to:
-- Two tables to follow --
barnesandnoble.com inc.
Consolidated Statements of Operations
(thousands of dollars, except per share data)
(unaudited)
Three Months Ended
-----------------------
March 31, March 31,
2003 2002
----------- -----------
Consumer sales $ 99,549 $ 95,125
Corporate sales 6,415 11,410
----------- -----------
Net sales 105,964 106,535
Cost of sales 79,968 83,373
----------- -----------
Gross profit 25,996 23,162
----------- -----------
Operating expenses:
Fulfillment and customer service 9,005 9,472
Marketing, sales and editorial 9,129 10,277
Technology and web site development 7,390 9,576
General and administrative 6,392 6,388
Depreciation and amortization 7,354 8,092
Equity in net loss of equity investments
including amortization of goodwill - 528
----------- -----------
Total operating expenses 39,270 44,333
----------- -----------
Operating loss (13,274) (21,171)
Interest income, net 137 634
----------- -----------
Net loss $ (13,137) $ (20,537)
=========== ===========
Basic and diluted net loss per common share ($0.08) ($0.13)
Average shares
(diluted -- if converted) (1) 158,802 158,787
barnesandnoble.com inc.
Consolidated Statements of Operations (continued)
(thousands of dollars, except per share data)
(unaudited)
Three Months Ended
-----------------------
March 31, March 31,
2003 2002
----------- -----------
Percent of sales:
Gross margin 24.5% 21.7%
Operating expenses:
Fulfillment and customer service 8.5 8.9
Marketing, sales and editorial 8.6 9.6
Technology and web site development 7.0 9.0
General and administrative 6.0 6.0
Depreciation and amortization 6.9 7.6
Equity in net loss of equity investments
including amortization of goodwill - 0.5
----------- -----------
Total operating expenses 37.1 41.6
----------- -----------
Operating loss (12.5) (19.9)
Interest income, net 0.1 0.6
----------- -----------
Net loss (12.4)% (19.3)%
=========== ===========
(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 Balance Sheets
(thousands of dollars, except share and per share data)
March 31, December 31,
2003 2002
------------ ------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 47,027 $ 70,144
Receivables, net 4,848 14,631
Merchandise inventories 45,420 48,303
Prepaid expenses and other current assets 3,496 3,991
------------ ------------
Total current assets 100,791 137,069
------------ ------------
Fixed assets, net 52,463 58,871
Goodwill, net 13,777 13,777
Other non-current assets 19 17
------------ ------------
Total assets $ 167,050 $ 209,734
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 10,016 $ 16,071
Accrued liabilities 49,605 70,456
Payable to affiliate 45,620 48,261
------------ ------------
Total current liabilities 105,241 134,788
------------ ------------
Minority interest 42,489 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; 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 189,294 189,294
Accumulated deficit (1) (170,018) (166,697)
------------ ------------
Total stockholders' equity 19,320 22,641
------------ ------------
Total liabilities and stockholders' equity $ 167,050 $ 209,734
============ ============
(1) Represents accumulated deficit of barnesandnoble.com llc since
barnesandnoble.com inc.'s initial public offering.
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