Barnes & Noble.com Reports Results for Q4 2003; Q4 Comparable Sales Increase 8.2 Percent; EBITDA Profit Achieved.Business Editors NEW YORK--(BUSINESS WIRE)--Jan. 29, 2004 Barnes Barnes, former municipal borough, SE England. See Richmond upon Thames. & Noble.com (Nasdaq:BNBN) (www.bn.com) announced today its 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 (earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
The company's comparable sales for fourth quarter 2003 were $138.4 million, an 8.2 percent increase over the prior year period. Full-year comparable sales were $437.2 million, a 3.4 percent increase over fiscal 2002. Comparable sales reflect the gross amount of used and out-of-print sales, consistent with how these sales were recorded in the prior year. The company has been recording used and out-of-print sales on a net commission basis since April 2003 due to the launch of a new business arrangement for the used and out-of-print business whereby the company acts as an agent on those sales. Fourth quarter 2003 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 were $133.4 million, a 4.3 percent increase, as compared with the fourth quarter of 2002. Full-year 2003 net sales were $424.8 million. The fourth quarter gross margin was 24.5 percent, a significant increase from 21.6 percent in the fourth quarter of 2002. Full year gross margin increased to 24.5 percent from 22.6 percent in 2002. The substantial gross margin improvement resulted from increased efficiencies realized from 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. operations, the change in the model for used and out-of-print books, as well as less promotional activity during the holiday season. The company continued to realize greater operational efficiency, reducing its 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. on both a dollar basis and as a percentage of net sales for the fourth quarter of 2003 and for the full-year 2003. Total operating expenses decreased 10.9 percent quarter over quarter and 12.5 percent year over year. As a percentage of net sales, operating expenses decreased to 28.7 percent in fourth quarter 2003 from 33.5 percent in fourth quarter 2002 and decreased to 35.2 percent for full-year 2003 from 40.4 percent for full-year 2002. The net loss for the fourth quarter was ($5.5) million, or ($0.03) per share, a 63.2 percent improvement from a net loss of ($15.0) million, or ($0.09) per share for the fourth quarter of 2002. Full-year 2003 net loss was ($45.0) million, or ($0.28) per share, a 38.9 percent improvement from full-year 2002 results. "We are extremely pleased with our fourth-quarter results," said Marie Toulantis, chief executive officer of Barnes & Noble.com. "Our customers responded to our strong marketing and 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. programs driving sales to increase over eight percent on a comparable basis. We were able to expand our gross margins and leverage our operating expenses on a higher sales base, which enabled us to reach our stated goal of EBITDA profitability." First Quarter 2004 Outlook Net sales are expected to range between $105 million and $115 million, resulting in a net loss per share of ($0.06) to ($0.08) per share. Full-Year 2004 Outlook Net sales are expected to range between $435.0 million and $475 million, resulting in a net loss per share of ($0.13) to ($0.18) per share. 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 17 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 ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 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 edit To make a change to existing data. See update. (application) edit - Use of some kind of editor program to modify a document. Also used to refer to the modification itself, e.g. "my last edit only made things worse". orial 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:
(1) The fourth quarter 2003 EBITDA of $0.3 million consisted of a net loss of ($5.5) million before interest income of $0.04 million and depreciation and amortization of ($5.8) million. The fourth quarter 2002 EBITDA loss of ($6.7) million consisted of a net loss of ($15.0) million before interest income of $0.22 million and depreciation and amortization of ($8.5) million. The company's management considers EBITDA to be an important measure in evaluating the company's financial performance and uses this measure in managing ongoing operations. --Two tables to follow--
barnesandnoble.com inc.
Consolidated Statements of Operations
(thousands of dollars, except per share data)
(unaudited)
Three months ended Twelve months ended
--------------------- ---------------------
December December December December
31, 2003 31, 2002 31, 2003 31, 2002
---------- ---------- ---------- ----------
Net sales $133,381 $127,880 $424,815 $422,827
Cost of sales 100,712 100,224 320,627 327,258
---------- ---------- ---------- ----------
Gross profit 32,669 27,656 104,188 95,569
---------- ---------- ---------- ----------
Operating expenses:
Fulfillment and
customer service 11,182 9,753 36,595 35,990
Marketing, sales and
editorial 7,444 9,030 30,390 35,760
Technology and web site
development 7,557 8,765 30,725 35,787
General and administrative 6,210 6,463 25,548 26,265
Depreciation and
amortization 5,845 8,549 26,167 33,502
Equity in net loss of
equity investments
including related
amortization of
intangibles - 358 - 3,537
---------- ---------- ---------- ----------
Total operating
expenses 38,238 42,918 149,425 170,841
Operating loss (5,569) (15,262) (45,237) (75,272)
Interest income, net 40 220 226 1,615
---------- ---------- ---------- ----------
Net loss $(5,529) $(15,042) $(45,011) $(73,657)
---------- ---------- ---------- ----------
Basic net loss per
common share ($0.03) ($0.09) ($0.28) ($0.46)
Average shares (diluted if
converted) (1) 161,666 158,795 159,994 158,791
barnesandnoble.com inc.
Consolidated Statements of Operations (continued)
(thousands of dollars, except per share data)
(unaudited)
Three months ended Twelve months ended
------------------- --------------------
December December December December
31, 2003 31, 2002 31, 2003 31, 2002
-------- -------- -------- --------
Percent of net sales:
Gross margin 24.5% 21.6% 24.5% 22.6%
Operating expenses:
Fulfillment and
customer service 8.4 7.6 8.6 8.5
Marketing, sales and editorial 5.6 7.1 7.2 8.5
Technology and web site
development 5.7 6.8 7.2 8.5
General and administrative 4.7 5.0 6.0 6.2
Depreciation and amortization 4.4 6.7 6.2 7.9
Equity in net loss of equity
investments including related
amortization of intangibles - 0.3 - 0.8
------ ------- ------- -------
Total operating expenses 28.7 33.5 35.2 40.4
Operating loss (4.1) (11.9) (10.6) (17.8)
Interest income, net 0.0 0.1 0.0 0.4
------- -------- -------- --------
Net loss (4.1)% (11.8)% (10.6)% (17.4)%
-------- -------- -------- --------
(1) Includes the conversion of outstanding membership units of
barnesandnoble.com llc converted into outstanding shares of
barnesandnoble.com inc.
barnesandnoble.com inc.
Consolidated Balance Sheets
(thousands of dollars, except share and per share data)
December 31, December 31,
2003 2002
-------------- --------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 68,344 $ 70,144
Receivables, net 5,368 14,631
Merchandise inventories 57,900 48,303
Prepaid expenses and other
current assets 4,072 3,991
---------- -----------
Total current assets 135,684 137,069
---------- -----------
Fixed assets, net 48,474 58,871
Goodwill, net 13,777 13,777
Other non-current assets 23 17
---------- -----------
Total assets $ 197,958 $ 209,734
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 13,277 $ 16,071
Accrued liabilities 77,142 70,456
Payable to affiliate 71,957 48,261
---------- -----------
Total current liabilities 162,376 134,788
---------- -----------
Minority interest 18,581 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;
48,280,087 and 43,802,228 shares
issued and outstanding 48 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 194,996 189,294
Accumulated deficit (178,043) (166,697)
---------- -----------
Total stockholders' equity 17,001 22,641
---------- -----------
Total liabilities and
stockholders' equity $ 197,958 $ 209,734
========== ===========
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