Barnes & Noble.com Reports Record Full-Year Sales of $423 Million.Business Editors NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , NY--(BUSINESS WIRE)--Jan. 27, 2003 Barnes Barnes, former municipal borough, SE England. See Richmond upon Thames. & 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): -- Consumer Sales Up 15% in Q4 -- Q4 Total Sales Increase 11% -- Beats Sales and Net Loss Forecasts Barnes & Noble.com (Nasdaq: BNBN) (www.bn.com) announced today that 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: 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 for the fourth quarter ended December December: see month. 31, 2002 were $127.9 million, an increase of 11.2 percent, as compared with the fourth quarter of 2001. Sales to consumers rose 15.0 percent during the fourth quarter. Full-year 2002 consolidated sales increased 4.5 percent to $422.8 million and exceeded the company's October October: see month. 25, 2002 forecast of $400 million to $420 million. The company's net loss on a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis for the fourth quarter improved to ($15.0) million, or ($0.09) per share, from a net loss of ($127.8) million, or ($0.81) per share, in the fourth quarter of 2001. The full-year 2002 net loss improved to ($73.7) million, or ($0.46) per share, from a prior year net loss of ($244.4) million, or ($1.54) per share and was less than the company's October 25, 2002 forecast of a net loss of ($0.48) to ($0.49) per share. The company's 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, equity losses, and impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. and special charges) declined to ($6.4) million from ($21.4) million in the fourth quarter of 2001. The EBITDA loss for 2002 was ($38.2) million, down from ($92.5) million in 2001. 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 72.0 percent quarter over quarter and 50.1 percent year over year, as all expenses were reduced in absolute dollars and as a percentage of sales. The significant improvement in the fourth quarter and full-year operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. is attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to improved efficiencies, greater productivity, cost control measures and the absence of impairment and special charges in 2002. "Our strong fourth-quarter performance was the result of our highly effective holiday merchandising merchandising Element of marketing concerned especially with the sale of goods and services to customers. One aspect of merchandising is advertising, which aims to capture the interest of the segment of the population most likely to buy the product. and advertising programs, our targeted marketing strategy as well as a robust online holiday shopping season," said Marie Toulantis, chief executive officer of Barnes & Noble.com. "In addition, we achieved all of the strategic and financial goals we established at the beginning of 2002." Business Outlook "We are very pleased with the significant progress we made in 2002 towards our goal of reaching profitability and with the strength of our year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. balance sheet. We finished the year with $70 million in cash and no debt," said Kevin KEVIN Keepers of the Eternal Vigilance of the Islamic Nation (fictional, from White Teeth by Zadie Smith) Frain, chief financial officer of Barnes & Noble.com. "As we move into 2003, we will continue to focus on maximizing max·i·mize tr.v. max·i·mized, max·i·miz·ing, max·i·miz·es 1. To increase or make as great as possible: efficiency across all of our expense categories while increasing our top line, and as a result, we expect to reach slightly positive EBITDA in the fourth quarter of 2003." First Quarter Outlook Net sales are expected to range between $105 million and $115 million, resulting in a net loss per share of ($0.10) to ($0.12) per share. This compares with first-quarter 2002 results of $106.5 million in sales and a net loss per share of ($0.13). Full Year Outlook Full-year 2003 net sales are expected to be between $430 million and $470 million, EBITDA loss between ($16.0) million and ($20.0) million, with a net loss per share of ($0.28) to ($0.34). About Barnes & Noble.com Barnes & Noble.com is a leading online retailer of books, music and DVD/video. Since opening its online store (www.bn.com) in March 1997, Barnes & Noble.com has attracted more than 13 million customers in 232 countries. Barnes & Noble.com's online bookstore includes the largest in-stock selection of in-print book titles with access to over one million titles for immediate delivery, supplemented by more than 20 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:
barnesandnoble.com inc.
Consolidated Statements of Operations
(thousands of dollars, except per share data)
(unaudited)
Three Months Ended
-------------------------
December 31, December 31,
2002 2001
------------ ------------
Consumer sales $120,513 $ 104,819
Corporate sales 7,367 10,218
------------- -----------
Net sales 127,880 115,037
Cost of sales 100,224 90,599
------------- -----------
Gross profit 27,656 24,438
------------- -----------
Operating expenses:
Fulfillment and customer service 9,753 12,817
Marketing, sales and editorial 9,030 13,859
Technology and web site
development 8,765 10,439
General and administrative 6,463 8,736
Depreciation and amortization 8,549 10,846
Impairment and special charges - 88,213
Equity in net loss of equity investments
including amortization of goodwill 358 8,140
-------------- -----------
Total operating expenses 42,918 153,050
-------------- -----------
Operating loss (15,262) (128,612)
Interest income, net 220 776
-------------- -----------
Net loss $(15,042) $(127,836)
============== ===========
Basic and diluted net loss per
common share ($0.09) ($0.81)
Average shares
(diluted -- if converted) (1) 158,795 158,787
barnesandnoble.com inc.
Consolidated Statements of Operations (continued)
(thousands of dollars, except per share data)
(unaudited)
Three Months Ended
--------------------------
December 31, December 31,
2002 2001
------------- ------------
Percent of sales:
Gross margin 21.6% 21.2%
Operating expenses:
Fulfillment and customer service 7.6 11.1
Marketing, sales and editorial 7.1 12.0
Technology and web site
development 6.8 9.1
General and administrative 5.0 7.6
Depreciation and amortization 6.7 9.4
Impairment and special charges - 76.7
Equity in net loss of equity investments
including amortization of goodwill 0.3 7.1
------------ ------------
Total operating expenses 33.5 133.0
------------ ------------
Operating loss (11.9) (111.8)
Interest income, net 0.1 0.7
------------ ------------
Net loss (11.8)% (111.1)%
============ ============
(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
(thousands of dollars, except per share data)
(unaudited)
Twelve Months Ended
-------------------------
December 31, December 31,
2002 2001
------------ ------------
Consumer sales $ 390,799 $ 348,512
Corporate sales 32,028 56,088
------------ ------------
Net sales 422,827 404,600
Cost of sales 327,258 313,365
------------ ------------
Gross profit 95,569 91,235
------------ ------------
Operating expenses:
Fulfillment and customer service 35,990 44,637
Marketing, sales and editorial 35,760 61,418
Technology and web site
development 35,787 45,298
General and administrative 26,265 32,362
Depreciation and amortization 33,502 41,981
Impairment and special charges - 88,213
Equity in net loss of equity investments
including amortization of goodwill 3,537 28,733
------------ -----------
Total operating expenses 170,841 342,642
------------ -----------
Operating loss (75,272) (251,407)
Interest income, net 1,615 7,041
------------ -----------
Net loss $ (73,657) $(244,366)
============ ===========
Basic and diluted net loss per
common share ($0.46) ($1.54)
Average shares
(diluted -- if converted) (1) 158,791 158,787
barnesandnoble.com inc.
Consolidated Statements of Operations (continued)
(thousands of dollars, except per share data)
(unaudited)
Twelve Months Ended
----------------------------
December 31, December 31,
2002 2001
------------ -------------
Percent of sales:
Gross margin 22.6% 22.5%
Operating expenses:
Fulfillment and customer service 8.5 11.0
Marketing, sales and editorial 8.5 15.2
Technology and web site
development 8.5 11.2
General and administrative 6.2 8.0
Depreciation and amortization 7.9 10.4
Impairment and special charges - 21.8
Equity in net loss of equity
investments including
amortization of goodwill 0.8 7.1
------------ ------------
Total operating expenses 40.4 84.7
------------ ------------
Operating loss (17.8) (62.1)
Interest income, net 0.4 1.7
------------ ------------
Net loss (17.4)% (60.4)%
============ ============
(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)
December 31, December 31,
2002 2001
------------ ------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 70,144 $ 105,125
Marketable securities - 10,141
Receivables, net 14,631 15,698
Merchandise inventories 54,592 48,563
Prepaid expenses and other current assets 3,991 3,874
------------ -----------
Total current assets 143,358 183,401
------------ -----------
Fixed assets, net 58,871 85,771
Goodwill, net 13,777 16,777
Other non-current assets 17 1,427
------------ -----------
Total assets $ 216,023 $ 287,376
============ ===========
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 16,071 $ 4,652
Accrued liabilities 76,745 90,590
Payable to affiliate 48,261 43,531
------------ -----------
Total current liabilities 141,077 138,773
------------ -----------
Minority interest 52,305 105,845
------------ -----------
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 189,294 189,279
Accumulated deficit (1) (166,697) (146,565)
----------- ----------
Total stockholders' equity 22,641 42,758
----------- ----------
Commitments and contingencies
Total liabilities and stockholders' equity $ 216,023 $ 287,376
=========== ==========
(1) Represents accumulated deficit of barnesandnoble.com inc. since
the Company's initial public offering.
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