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Item 5. Market for Registrant’s Common Equity

2024-07-01 compared with 2023-07-31 · 27 added, 82 removed, 16 unchanged (87% of the section changed)

MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our authorized capital stock consists of 200,000,000 shares of common stock, par value $0.01 per share, and 5,000,000 shares of preferred stock, par value $0.01 per share.

As of April 27, 2024, our authorized capital stock consisted of 200,000,000 shares of common stock, par value $0.01 per share, and 5,000,000 shares of preferred stock, par value $0.01 per share.

Our common stock trades on the New York Stock Exchange (“NYSE”) under the symbol “BNED.”

On October 5, 2023, our shareholders approved an amendment and restatement of the Equity Incentive Plan to increase the number of shares available for issuance by an additional 4,500,000 of our Common Stock.

We have reserved an aggregate of 17,909,345 shares of common stock for future grants in accordance with the Barnes & Noble Education Inc.

2 unchanged sentences

Long-Term Incentive Compensation Expense .

On June 5, 2024, our shareholders approved an amendment to our Amended and Restated Certificate of Incorporation, as amended, to increase the aggregate number of authorized shares of Common Stock from 200,000,000 shares to 10,000,000,000 shares.

On June 10, 2024, subsequent to the end of Fiscal 2024, we completed various transactions, including an equity rights offering, private equity investment, Term Loan debt conversion, and Credit Facility refinancing, to substantially deleverage our consolidated balance sheet.

These transactions raised additional capital for repayment of indebtedness and provide additional flexibility for working capital needs, which will also allow us to strategically invest in innovation and continue to execute our strategic initiatives, including but not limited to the growth of our First Day Complete program.

For additional information, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 17.

Subsequent Events.

Because the rights issuance was offered to all existing stockholders at an exercise price that was less than the fair value of our Common Stock, as of such time, the weighted average shares outstanding and basic and diluted earnings (loss) per share were adjusted retroactively to reflect the bonus element of the rights offering for all periods presented by a factor of 5.03.

On June 11, 2024, we completed a reverse stock split of the Company’s outstanding shares of common stock at a ratio of 1-for-100 (the “Reverse Stock Split”), which was previously approved by stockholders at a special meeting held on June 5, 2024.

In connection with the Reverse Stock Split, every 100 shares of the common stock issued and outstanding was converted into one share of the Company’s common stock.

No change will be made to the trading symbol for the Company’s shares of Common Stock, “BNED,” in connection with the Reverse Stock Split.

The Reverse Stock Split is part of the Company’s plan to regain compliance with the minimum bid price requirement of $1.00 per share required to maintain continued listing on the NYSE.

Weighted average shares for both basic and diluted, prior to giving effect to the bonus element of the rights offering and the Reverse Stock Split was 52,935,533 for the 52 weeks ended April 27, 2024.

As of April 27, 2024, there were approximately 672 registered holders of record of our common stock.

A substantially greater number of holders of our common stock are “street name” or beneficial holders, whose shares of record are held by banks, brokers, and other financial institutions.

Repurchase of Shares

5 unchanged sentences

As of April 27, 2024, approximately $26.7 million remains available under the stock repurchase program.

During the years ended April 29, 2023, April 30, 2022, and May 1, 2021, we also repurchased 347,808 shares, 239,751 shares, and 414,174 shares, respectively, of our common stock in connection with employee tax withholding obligations for vested stock awards.

We paid no other dividends to common stockholders during the years ended April 29, 2023, April 30, 2022, and May 1, 2021.

During the years ended April 27, 2024 and April 29, 2023, we also repurchased 147,885 shares and 347,808 shares, respectively, of our common stock in connection with employee tax withholding obligations for vested stock awards.

We paid no other dividends to common stockholders during the years ended April 27, 2024 and April 29, 2023.

We do not intend to pay dividends on our common stock in the foreseeable future and dividend payments are not permitted under current or future financing arrangements.

Index to Form 10-K Index to FS

SELECTED FINANCIAL DATA

The selected financial information presented below should be read in conjunction with Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations and Item 8.

Financial Statements and Supplementary Data .

Fiscal Year (a)(b)

(In thousands of dollars,

except for share and per share amounts) 2023 2022 (c)

STATEMENT OF OPERATIONS DATA:

Total sales $ 1,543,208 $ 1,495,734 $ 1,406,516 $ 1,827,402 $ 2,013,304

Cost of sales (exclusive of depreciation and amortization expense):

1,193,769 1,152,902 1,176,173 1,404,166 1,505,608

Gross profit 349,439 342,832 230,343 423,236 507,696

Selling and administrative expenses 357,611 353,968 316,164 385,300 409,376

Depreciation and amortization expense 42,163 42,124 45,204 53,190 57,891

Impairment loss (non-cash) (d)

6,008 6,411 27,630 433 57,748

Restructuring and other charges (d)

10,103 944 10,107 18,567 6,836

Transaction costs — — — — 154

Operating loss (66,446) (60,615) (168,762) (34,254) (24,309)

Interest expense, net 22,683 10,096 8,087 7,445 9,780

Loss from continuing operations before income taxes (89,129) (70,711) (176,849) (41,699) (34,089)

Income tax expense (benefit) 1,011 (9,152) (43,280) (9,895) (12,263)

Loss from continuing operations, net of tax (90,140) (61,559) (133,569) (31,804) (21,826)

Loss from discontinued operations, net of tax (b)

(11,722) (7,298) (6,241) (6,446) (2,548)

Net loss $ (101,862) $ (68,857) $ (139,810) $ (38,250) $ (24,374)

Loss per common share:

Basic and Diluted

Continuing operations $ (1.72) $ (1.19) $ (2.69) $ (0.66) $ (0.46)

Discontinued operations (b)

(0.22) (0.14) (0.12) (0.14) (0.06)

Total Basic and Diluted Earnings per share $ (1.94) $ (1.33) $ (2.81) $ (0.80) $ (0.52)

Weighted average common shares - Basic and Diluted (thousands):

52,454 51,797 49,669 48,013 47,306

Fiscal Year (a)(b)

(In thousands of dollars,

except for share and per share amounts) 2023 2022 (c)

OTHER OPERATING DATA

- Continuing Operations:

Adjusted EBITDA (non-GAAP) (e)

Retail $ 10,640 $ 8,679 $ (66,827) $ 36,227 $ 89,094

Wholesale 3,239 3,782 18,598 21,567 35,018

Corporate Services and Eliminations (22,025) (22,777) (21,887) (19,044) (25,339)

Total Adjusted EBITDA (non-GAAP) $ (8,146) $ (10,316) $ (70,116) $ 38,750 $ 98,773

Adjusted Earnings (non-GAAP) (e)

$ (74,003) $ (53,384) $ (93,890) $ (17,104) $ 26,811

Capital expenditures $ 25,092 $ 33,607 $ 27,562 $ 30,767 $ 34,976

OTHER OPERATING DATA - STORE COUNT:

Number of physical stores at period end 774 805 769 772 772

Number of virtual stores at period end 592 622 648 647 676

Total number of stores at period end 1,366 1,427 1,417 1,419 1,448

Index to Form 10-K Index to FS

Fiscal Year (a)(b)

(In thousands of dollars,

except for share and per share amounts) 2023 2022 (c)

BALANCE SHEET DATA

(at period end):

Merchandise and rental inventory $ 353,328 $ 323,466 $ 309,804 $ 469,649 $ 467,323

Total assets (b)

$ 980,779 $ 1,071,553 $ 1,031,113 $ 1,158,138 $ 952,337

Total liabilities (b)

$ 850,028 $ 843,179 $ 738,102 $ 740,387 $ 501,709

Short-term debt $ — $ 40,000 $ 50,000 $ 75,000 $ 100,000

Long-term debt $ 182,151 $ 185,700 $ 127,600 $ 99,700 $ 33,500

Total stockholders' equity $ 130,751 $ 228,374 $ 293,011 $ 417,751 $ 450,628

(a) Our fiscal year is comprised of 52 or 53 weeks, ending on the Saturday closest to the last day of April.

“Fiscal 2023” means the 52 weeks ended April 29, 2023, “Fiscal 2022” means the 52 weeks ended April 30, 2022, “Fiscal 2021” means the 52 weeks ended May 1, 2021, “Fiscal 2020” means the 53 weeks ended May 2, 2020, and “Fiscal 2019” means the 52 weeks ended April 27, 2019.

(b) During the fourth quarter of Fiscal 2023, assets related to our Digital Student Solutions ("DSS") Segment met the criteria for classification as Assets Held for Sale and Discontinued Operations.

The results of operations related to the DSS Segment are included in the consolidated statements of operations as "Loss from discontinued operations, net of tax" for all periods presented.

Certain assets and liabilities associated with the DSS Segment are presented in our consolidated balance sheets as "Assets Held for Sale" and "Liabilities Held for Sale."

(c) During Fiscal 2022, Fiscal 2021 and Fiscal 2020, our business experienced an unprecedented and significant impact as a result of the COVID-19 pandemic.

The impact of which affects the comparability of our results of operations and cash flows.

(d) For additional information, see Item 8.

Financial Statements and Supplementary Data - Note 2.

Summary of Significant Accounting Policies and Note 9.

Supplementary Information.

(e) To supplement our results prepared in accordance with GAAP, we use the measure of Adjusted EBITDA and Adjusted Earnings, which are non-GAAP financial measures as defined by the Securities and Exchange Commission (the “SEC”).

Management's Discussion and Analysis of Financial Condition and Results of Operations - Adjusted Earnings (non-GAAP) and - Adjusted EBITDA (non-GAAP).

On April 16, 2024, our Board of Directors approved the adoption of a short-term stockholder rights plan and declared a dividend distribution of one preferred share purchase right on each outstanding share of the Company's common stock.

Each right will entitle stockholders to buy one one-thousandth of a share of our preferred stock at an established exercise price.

The dividend was payable to holders of record as of the close of business on April 29, 2024.

The rights will be exercisable only if a person or group acquires 10% or more of our outstanding common stock and various other criteria are met (the “Distribution Date”).

Until the Distribution Date, the rights will not be exercisable;

the rights will not be evidenced by separate rights certificates;

and the rights will be transferable by, and only in connection with, the transfer of common stock.

The rights will expire no later than January 31, 2025.

SELECTED FINANCIAL DATA [RESERVED]

Index to Form 10-K Index to FS

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity