What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-12-23 compared with 2024-07-01 · 435 added, 491 removed, 379 unchanged (71% of the section changed)

5 unchanged sentences

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

“Fiscal 2024” means the 52 weeks ended April 27, 2024, “Fiscal 2023” means the 52 weeks ended April 29, 2023.

“Fiscal 2025” means the 53 weeks ended May 3, 2025, “Fiscal 2024” means the 52 weeks ended April 27, 2024.

The following should be read in conjunction with "Explanatory Note", "Disclosures Regarding Forward-Looking Statements" and our consolidated financial statements and notes thereto included in Item 15 of this Annual Report on Form 10-K (this “Form 10-K”).

Restatement of Previously Issued Consolidated Financial Statements

This Management’s Discussion and Analysis of Financial Condition and Results of Operations gives effect to the restatement of the Company’s previously issued consolidated financial statements and related disclosures as of and for the fiscal year ended April 27, 2024, contained in its previously filed Annual Report on Form 10-K.

The restatement is made to correct errors associated with the recording of cost of digital sales and leases associated with our store operating agreements.

Detailed restatements of the Company's consolidated financial statements for Fiscal 2024 are provided in Note 3.

Restatement of Previously Issued Audited Consolidated Financial Statements in the Notes to Consolidated Financial Statements of this Form 10-K.

The Company’s previously issued unaudited interim Consolidated Statements of Operations for the first fiscal quarter ended July 29, 2023, second fiscal quarter and six months ended October 28, 2023, third fiscal quarter and nine months ended January 27, 2024, fiscal first quarter ended July 27, 2024, fiscal second quarter and six months ended October 26, 2024, and the fiscal third quarter and nine months ended January 25, 2025, contained in its previously filed Quarterly Reports on Form 10-Q have also been restated due to these errors.

Detailed restatements of the Company's unaudited interim condensed consolidated financial statements are provided in Note 21.

Restatement of Quarterly Financial Information (Unaudited) in the Notes to Consolidated Financial Statements of this Form 10-K.

See Explanatory Note at the beginning of this Form 10-K for additional background on the restatement, the fiscal periods impacted, control considerations, and other information.

Description of Business

2 unchanged sentences

We are also one of the largest textbook wholesalers and inventory management hardware and software providers.

We operate 1,245 physical, virtual, and custom bookstores and serve more than 5.8 million students, delivering essential educational content, tools and general merchandise within a dynamic omnichannel retail environment.

For a discussion of our business, see Part I - Item 1.

We operate 1,146 physical and virtual bookstores, delivering essential educational content and general merchandise within a dynamic omnichannel retail environment .

The strengths of our business include our ability to compete by developing new products and solutions to meet market needs, our large operating footprint with direct access to students and faculty, our well-established, deep relationships with academic partners and stable, long-term contracts and our well-recognized brands.

We provide product and service offerings designed to address the most pressing issues in higher education, including equitable access, enhanced convenience and improved affordability through innovative course material delivery models designed to drive improved student experiences and outcomes.

We offer our BNC First Day ® equitable and inclusive access programs, consisting of First Day Complete and First Day , which provide faculty required course materials on or before the first day of class at below market rates, as compared to the total retail price for the same course materials if purchased separately (a la carte), and students are billed the below market rate directly by the institution as a course charge or included in tuition.

During the 52 weeks ended April 27, 2024, BNC First Day total revenue increased by $127 million, or 37%, to $474 million compared to $347 million during the prior year period.

We provide product and service offerings designed to address the most pressing issues in higher education, including affordable access, enhanced convenience and improved affordability through innovative course material delivery models designed to drive improved student experiences and outcomes.

We offer our BNC First Day ® affordable access course material programs, consisting of First Day Complete and First Day , which provide faculty required course materials on or before the first day of class at below market rates, as compared to the total retail price for the same course materials if purchased separately (a la carte), and students are billed the below market rate directly by the institution as a course charge or included in tuition.

During the 53 weeks ended May 3, 2025, BNC First Day ® total revenue increased by $119.9 million, or 25.3%, to $593.8 million compared to $473.9 million during the prior year period.

These programs have allowed us to reverse historical long-term trends in course materials revenue declines, which has been observed at those schools where such programs have been adopted, and improve predictability of our future results.

1 unchanged sentence

We are moving quickly to accelerate our First Day Complete strategy.

Many institutions adopted First Day Complete in Fiscal 2024, and we plan to continue to scale the number of schools adopting First Day Complete in Fiscal 2025 and beyond.

Many institutions adopted First Day Complete in Fiscal 2025, and we continue to scale the number of schools adopting First Day Complete.

We expect to continue to introduce scalable and advanced solutions focused largely on the student and customer experience, expand our e-commerce capabilities and accelerate such capabilities through our service providers, Fanatics Retail Group Fulfillment, LLC (“Fanatics”) and Fanatics Lids College, Inc.

D/B/A “Lids” (“Lids”) (collectively referred to herein as the “F/L Relationship”), win new accounts, and expand our revenue opportunities through strategic relationships.

We expect gross comparable store general merchandise sales to increase over the long term, as our product assortments continue to emphasize and reflect changing consumer trends, and we evolve our presentation concepts and merchandising of products in stores and online, which we expect to be further enhanced and accelerated through the F/L Relationship.

D/B/A “Lids” (“Lids”, and together with Fanatics, referred to herein as the “F/L Relationship”), win new accounts, and expand our revenue opportunities through strategic relationships.

We expect gross comparable store general merchandise sales to increase over the long term, as our product assortments

Index to Form 10-K Index to FS

continue to emphasize and reflect changing consumer trends, and we evolve our presentation concepts and merchandising of products in stores and online, which we expect to be further enhanced and accelerated through the F/L Relationship.

Fanatics and Lids, acting on our behalf as our service providers, provide unparalleled product assortment, e-commerce capabilities and powerful digital marketing tools to drive increased value for customers and accelerate growth of our logo general merchandise business.

1 unchanged sentence

Our large college footprint, reputation, and credibility in the marketplace not only support our marketing efforts to universities, students, and faculty, but are also important to our relationship with leading publishers who rely on us as one of their primary distribution channels.

BNC First Day Equitable and Inclusive Access Programs

BNC First Day ® Affordable Access Course Material Programs

• First Day Complete is adopted by an institution and includes all or the majority of undergraduate classes (and on occasion graduate classes), providing students both physical and digital materials.

The First Day Complete model drives

Index to Form 10-K Index to FS

substantially greater unit sales and sell-through for the bookstore.

The First Day Complete model drives substantially greater unit sales and sell-through for the bookstore.

• First Day is adopted by a faculty member for a single course, and students receive primarily digital course materials through their school's learning management system ("LMS").

Offering course materials through our equitable and inclusive access First Day Complete and First Day models is an important strategic initiative of ours to meet the market demands of substantially reduced pricing to students, as well as the opportunity to improve student outcomes, while, at the same time, increasing our market share, revenue and relative gross profits of course material sales given the higher volumes of units sold in such models as compared to historical sales models that rely on individual student marketing and sales.

Offering course materials through our affordable access First Day Complete and First Day models is an important strategic initiative of ours to meet the market demands of substantially reduced pricing to students, as well as the opportunity to improve student outcomes, while, at the same time, increasing our market share, revenue and relative gross profits of course material sales given the higher volumes of units sold in such models as compared to historical sales models that rely on individual student marketing and sales.

1 unchanged sentence

We are moving quickly to accelerate our First Day Complete strategy.

Many institutions adopted First Day Complete in Fiscal 2024, and we plan to continue to scale the number of schools adopting First Day Complete in Fiscal 2025 and beyond.

The following table summarizes our BNC First Day sales for the 52 weeks ended April 27, 2024 and April 29, 2023:

Dollars in millions 52 weeks ended

April 27, 2024 April 29, 2023 $ Increase

Many institutions adopted First Day Complete in Fiscal 2025, and we continue to scale the number of schools adopting First Day Complete.

The following table summarizes our BNC First Day ® sales for the 53 weeks ended May 3, 2025 and the 52 weeks ended April 27, 2024:

Dollars in millions 53 weeks ended 52 weeks ended

May 3, 2025 April 27, 2024 $ Increase

First Day Complete Sales

4 unchanged sentences

$ 593.8 $ 473.9 $ 119.9 25%

First Day Complete Spring 2024 Spring 2023 # Increase

First Day Complete Spring 2025

Number of campus stores 191 160 31 19%

1 unchanged sentence

957,000 803,000 154,000 19%

(a) Total undergraduate and graduate student enrollment as reported by National Center for Education Statistics (NCES) as of October 26, 2023.

(a) Total undergraduate and graduate student enrollment as reported by National Center for Education Statistics (NCES) as of January 7, 2025.

Index to Form 10-K Index to FS

Relationship with Fanatics and Lids

7 unchanged sentences

Lids manages in-store assortment planning and merchandising of emblematic apparel, headwear, and gift products for our partner campus stores, and Lids owns the inventory it manages, relieving us of the obligation to finance inventory purchases from working capital.

As the logo and emblematic general merchandise sales are fulfilled by Lids and Fanatics, we recognize commission revenue earned for these sales on a net basis in our consolidated financial statements, as compared to the recognition of logo and emblematic general merchandise sales on a gross basis prior to April 2021.

Index to Form 10-K Index to FS

Financing Arrangements

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.

On June 10, 2024, we completed various transactions (the "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.

Cost Savings Initiative

During Fiscal 2023, we implemented a significant cost reduction program designed to streamline our operations, maximize productivity and drive profitability.

We reduced our workforce, eliminated duplicate administrative headcounts at all levels, implemented improved system development processes to reduce maintenance costs, reduced capital expenditures, and evaluated operating contractual obligations for cost savings.

Over the course of Fiscal 2024, we have achieved annualized savings of approximately $30 million to $35 million from the Fiscal 2023 cost savings initiatives.

Additionally, during Fiscal 2024, Management's implemented further cost savings measures, including reduction of gross capital expenditures, amounting to approximately $29 million in savings.

We have two reportable segments:

Retail and Wholesale.

Additionally, unallocated shared-service costs, which include various corporate level expenses and other governance functions, are not allocated to a specific reporting segment and continue to be presented as “Corporate Services”.

The following discussion provides information regarding the three segments.

Retail Segment

The Retail Segment operates 1,245 college, university, and K-12 school bookstores, comprised of 707 physical bookstores and 538 virtual bookstores.

Our bookstores typically operate under agreements with the colleges, universities, or K-12 schools to be the official bookstore and the exclusive seller of course materials and supplies, including physical and digital products.

The majority of the physical campus bookstores have school-branded e-commerce websites, which we operate independently or along with our merchant service providers, and which offer students access to required and recommended course materials and affinity products, including emblematic apparel and gifts.

The Retail Segment offers our BNC First Day ® equitable and inclusive access programs, consisting of First Day Complete and First Day , which provide faculty required course materials on or before the first day of class at below market rates, as compared to the total retail price for the same course materials if purchased separately (a la carte), and students are billed the below market rate directly by the institution as a course charge or included in tuition.

Additionally, the Retail Segment offers a suite of digital content and services to colleges and universities, including a variety of open educational resource-based courseware.

During the 52 weeks ended April 27, 2024, we opened 46 stores and closed 167 stores in the Retail Segment with estimated net annual sales of $(74) million.

The Company’s strategic initiative is to close under-performing and less profitable stores.

Many institutions adopted First Day Complete in Fiscal 2024, and we plan to continue to scale the number of schools adopting First Day Complete in Fiscal 2025 and beyond.

These programs have allowed us to reverse historical long-term trends in course materials revenue declines as the growth of our BNC First Day programs offsets declines in a la carte courseware sales and closed store sales.

Wholesale Segment

The Wholesale Segment is comprised of our wholesale textbook business and is one of the largest textbook wholesalers in the country.

The Wholesale Segment centrally sources, sells, and distributes new and used textbooks to approximately 2,750 physical bookstores (including our Retail Segment's 707 physical bookstores) and sources and distributes new and used textbooks to our 538 virtual bookstores.

Additionally, the Wholesale Segment sells hardware and a software suite of applications that provides inventory management and point-of-sale solutions to approximately 325 college bookstores.

Corporate Services represents unallocated shared-service costs which include corporate level expenses and other governance functions, including executive functions, such as accounting, legal, treasury, information technology, and human resources.

Our business is highly seasonal.

For example, our retail business is seasonal, particularly with respect to textbook sales and rentals, with the major portion of sales and operating profit realized during the second and third fiscal quarters when college students generally purchase and rent textbooks for the upcoming semesters and lowest in the first and fourth fiscal quarters.

Our quarterly results also may fluctuate depending on the timing of the start of the various schools’ semesters, the revenue impact of accounting principles with respect to the recognition of revenue associated with our equitable and inclusive access programs,

Upon closing of the Transactions on June 10, 2024:

• We received gross proceeds of $95.0 million of new equity capital through a $50.0 million new private equity investment (the “Private Investment”) led by Immersion a $45.0 million equity rights offering (the "Rights Offering").

The Private Investment and the Rights Offering infused approximately $85.5 million of net cash proceeds after transaction costs, and resulted in Immersion obtaining a controlling interest in the Company.

• Our existing Term Loan lenders, TopLids and VitalSource, converted approximately $34.0 million of outstanding principal and accrued and unpaid interest into our Common Stock (the “Term Loan Debt Conversion”).

We recognized a loss on extinguishment of debt of $55.2 million in the Consolidated Statement of Operations in connection with the Term Loan Debt Conversion which represents the difference between the debt fair value and net carrying value, plus unamortized deferred financing costs related to the Term Loan.

As a result of the Term Loan Debt Conversion, the Term Loan and its related agreements were terminated.

• We refinanced our existing Credit Facility (the "Credit Facility Refinancing") providing access to a $325.0 million facility maturing in 2028.

The Credit Facility Refinancing has meaningfully enhanced our financial flexibility and reduced our annual interest expense.

On September 19, 2024, we entered into an at-the market ("ATM") sales agreement (the "September ATM Sales Agreement") with BTIG, LLC ("BTIG") under which we sold the maximum of $40.0 million of our Common Stock.

from time to time at a weighted-average price of $10.06 per share and received $39.2 million in proceeds, net of commissions.

BTIG, as the sales agent sold the shares based upon our instructions (including as to price, time or size limits or other customary parameters or conditions).

We paid BTIG a commission of 2% of the gross sales proceeds of the Common Stock sold under the September ATM Sales Agreement.

We were not obligated to make any sales of Common Stock under the September ATM Sales Agreement.

On December 20, 2024, we entered into an additional ATM sales agreement with BTIG (the "December ATM Sales Agreement"), under which we sold the maximum of $40.0 million of our Common Stock from time to time at a weighted-average price of $10.42 per share and received $39.2 million in proceeds, net of commissions.

BTIG, as the sales agent, sold the shares based upon our instructions (including as to price, time or size limits or other customary parameters or conditions).

We paid BTIG a commission of 2% of the gross sales proceeds of the Common Stock sold under the December ATM Sales Agreement.

We were not obligated to make any sales of Common Stock under the December ATM Sales Agreement.

Index to Form 10-K Index to FS

the ability to secure inventory on a timely basis, as well as shifts in our fiscal calendar dates.

Cost Savings Initiative

We continually seek to streamline our operations, maximize productivity and drive profitability to achieve significant cost reductions.

Over the past few fiscal years, we have reduced our workforce, eliminated duplicate administrative headcounts at all levels, implemented improved system development processes to reduce maintenance costs, reduced capital expenditures, and evaluated operating contractual obligations for cost savings.

In addition, we continue to close under-performing stores, and evaluate opportunities to refinance our debt.

During Fiscal 2025 and Fiscal 2024, we achieved savings of approximately $22 million and $29 million, respectively from cost savings initiatives.

We identify our segments in accordance with the way our business is managed.

During the 26 weeks ended October 26, 2024, management determined that a realignment of the Company's operating and reporting segments was necessary to better reflect the operations of the organization.

With the appointment of a new Chief Executive Officer ("CEO") and the completion of milestone financing transactions in June 2024, we streamlined operations to focus on a centralized management structure to support company-wide procurement, marketing and selling, delivery and customer service.

Given the change in how the overall business is managed and how the current CEO (the current Chief Operating Decision Maker ("CODM")) assesses performance and allocates resources, we combined the operating results of the prior two segments, Retail and Wholesale, into one operating and reporting segment.

Prior period disclosures have been restated to reflect the change to one segment.

Our business is highly seasonal, particularly with respect to textbook sales and rentals, with the major portion of sales and operating profit realized during the second and third fiscal quarters when college students generally purchase and rent textbooks for the upcoming semesters and lowest in the first and fourth fiscal quarters.

Our quarterly results also may fluctuate depending on the timing of the start of the various schools’ semesters, as well as shifts in our fiscal calendar dates.

These shifts in timing may affect the comparability of our results across periods.

Sales attributable to our wholesale business are generally highest in our first, second and third quarters, as it sells textbooks and other course materials for retail distribution.

Retail product revenue is recognized when the customer takes physical possession of our products, which occurs either at the point of sale for products purchased at physical locations or upon receipt of our products by our customers for products ordered through our websites and virtual bookstores.

Revenue from the sale of digital textbooks, which contains a single performance obligation, is recognized when the customer accesses the digital content as product revenue in our consolidated financial statements.

Product sales are recognized when the customer takes physical possession of our products, which occurs either at the point of sale for products purchased at physical locations or upon receipt of our products by our customers for products ordered through our websites and virtual bookstores.

Revenue from the sale of digital textbooks, which contains a single performance obligation, is recognized upon delivery of the digital content as product revenue in our consolidated financial statements.

Revenue from the rental of physical textbooks is deferred and recognized over the rental period based on the passage of time commencing at the point of sale, when control of the product transfers to the customer and is recognized as rental income in our consolidated financial statements.

Depending on the product mix offered under the BNC First Day ® offerings, revenue recognized is consistent with our policies for product, digital and rental sales, net of an anticipated opt-out or return provision.

Given the growth of BNC First Day programs, the timing of cash collection from our school partners may shift to periods subsequent to when the revenue is recognized.

When a school adopts our BNC First Day equitable and inclusive access offerings, cash collection from the school generally occurs after the institution's drop/add dates, which is later in the working capital cycle, particularly in our third quarter given the timing of the Spring Term and our quarterly reporting period, as compared to direct-to-student point-of-sale transactions where cash is generally collected during the point-of-sale transaction or within a few days from the credit card processor.

As a higher percentage of our sales shift to BNC First Day equitable and inclusive access offerings, we are focused on efforts to better align the timing of our cash outflows to course material vendors and cash inflows from collections from schools.

As the concentration of digital product sales increases, revenue will be recognized earlier during the academic term as digital textbook revenue is recognized when the customer accesses the digital content compared to:

Given the growth of BNC First Day ® affordable access course material programs, the timing of cash collection from our school partners may shift to periods subsequent to when the revenue is recognized.

When a school adopts our BNC First Day ® affordable access course material offerings, cash collection from the school generally occurs after the institution's drop/add dates, which is later in the working capital cycle, particularly in our third quarter given the timing of the Spring Term and our quarterly reporting period, as compared to direct-to-student point-of-sale transactions where cash is generally collected during the point-of-sale transaction or within a few days from the credit card processor.

As a higher percentage of our sales shift to BNC First Day ® affordable access course material program offerings, we are focused on efforts to better align the timing of our cash outflows to course material vendors and cash inflows from collections from schools.

As the concentration of digital product sales increases, revenue will be recognized earlier during the academic term as digital textbook revenue is recognized when the digital content is made available to the customer compared to:

(i) the rental of physical textbooks where revenue is recognized over the rental period, and (ii) a la carte courseware sales where revenue is recognized when the customer takes physical possession of our products, which occurs either at the point of sale for products purchased at physical locations or upon receipt of our products by our customers for products ordered through our websites and virtual bookstores.

6 unchanged sentences

All material intercompany accounts and transactions have been eliminated in consolidation.

During the fourth quarter of Fiscal 2023, assets related to our DSS Segment met the criteria for classification as Assets Held for Sale and Discontinued Operations.

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

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." The cash flows of the DSS Segment are also presented separately in our consolidated statements of cash flows.

Our sales are primarily derived from the sale of course materials, which include new, used, rental and digital textbooks.

Additionally, at college and university bookstores which we operate, we sell general merchandise, including emblematic apparel and gifts, trade books, computer products, school and dorm supplies, convenience and café items and graduation products.

Index to Form 10-K Index to FS

Our sales are primarily derived from the sale of course materials, which include new, used, rental and digital textbooks, and general merchandise, including emblematic apparel and gifts, trade books, computer products, school and dorm supplies, convenience and café items and graduation products.

Our rental income is primarily derived from the rental of physical textbooks.

3 unchanged sentences

Selling and administrative expenses also include long-term incentive plan compensation expense and general office expenses, such as merchandising, procurement, field support, and finance and accounting.

Shared-service costs such as human resources, legal, treasury, information technology, and various other corporate level expenses and other governance functions, are not allocated to a specific reporting segment and are recorded in Corporate Services as discussed in the Overview - Segments discussion above.

Index to Form 10-K Index to FS

Results of Operations Summary - Continuing Operations (a)

For a detailed discussion of Fiscal 2024 and year-over-year comparison to Fiscal 2023, see Results of Operations - Continuing Operations - 52 weeks ended April 27, 2024 compared with the 52 weeks ended April 29, 2023 below.

52 weeks ended

Dollars in thousands April 27, 2024 April 29, 2023 (a)

For a detailed discussion of Fiscal 2025 and year-over-year comparison to Fiscal 2024, see Results of Operations - Continuing Operations - 53 weeks ended May 3, 2025, compared with the 52 weeks ended April 27, 2024, below.

53 weeks ended 52 weeks ended

Dollars in thousands May 3, 2025 April 27, 2024

Product sales and other $ 1,463,245 $ 1,430,456

$ 1,430,456 $ 1,406,655

Rental income 146,925 136,679

Total sales $ 1,610,170 $ 1,567,135

Gross Profit $ 356,776 $ 349,439

Net loss from continuing operations

$ 337,804 $ 344,913

Adjusted Earnings (non-GAAP) - Continuing Operations (b)

Loss from continuing operations before income taxes $ (61,569) $ (74,161)

Net loss from continuing operations $ (65,825) $ (75,019)

Adjusted Net Loss (non-GAAP) - Continuing Operations (a)

$ (61,717) $ (45,064)

Adjusted EBITDA (non-GAAP) - Continuing Operations (b)

Retail $ 54,488 $ 10,640

Wholesale 9,360 3,239

Corporate Services (19,679) (22,000)

Eliminations 1,033 (25)

Total Adjusted EBITDA (non-GAAP) (b)

Adjusted EBITDA (non-GAAP) - Continuing Operations (a)

Total Adjusted EBITDA (non-GAAP)

$ 59,390 $ 36,233

(a) 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.

Net Loss from Continuing Operations excludes the results of operations related to the DSS Segment for all years reported above.

(b) Adjusted Earnings, Adjusted EBITDA, and Adjusted EBITDA by Segment are non-GAAP financial measures.

See Use of Non-GAAP Measures discussion below.

The following table sets forth, for the periods indicated, the percentage relationship that certain items bear to total sales:

52 weeks ended

Continuing Operations April 27, 2024 April 29, 2023

Product sales and other 91.3 % 91.2 %

Rental income 8.7 8.8

Total sales 100.0 100.0

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

Product and other cost of sales (a)

Rental cost of sales (a)

Total cost of sales 77.2 77.4

Gross margin 22.8 22.6

Selling and administrative expenses 19.9 23.2

Depreciation and amortization expense 2.6 2.7

Impairment loss (non-cash) 0.5 0.4

Restructuring and other charges 1.2 0.7

Operating loss from continuing operations (1.4) % (4.3) %

(a) Represents the percentage these costs bear to the related sales, instead of total sales.

(a) Adjusted Net Loss -Continuing Operations and Adjusted EBITDA - Continuing Operations are non-GAAP financial measures.

See Use of Non-GAAP Measures .

Index to Form 10-K Index to FS

7 unchanged sentences

52 weeks ended

Dollars in thousands April 27, 2024 April 29, 2023

Dollars in thousands April 27, 2024

Total sales $ 2,784

Cost of sales (a)

Gross profit (a)

Cost of sales

Selling and administrative expenses 3,029

1 unchanged sentence

Gain on sale of business (3,545)

Impairment loss (non-cash) (b)

Restructuring costs (c)

Impairment loss (non-cash) (a)

Other (income) expense (b)

Transaction costs 13

2 unchanged sentences

Loss from discontinued operations, net of tax $ (730)

(a) Cost of sales and Gross margin for the DSS Segment includes amortization expense (non-cash) related to content development costs of $0 million and $6.6 million for the 52 weeks ended April 27, 2024 and April 29, 2023, respectively.

(b) During the 52 weeks ended April 27, 2024, we recognized an impairment loss (non-cash) of $0.6 million (both pre-tax and after-tax), comprised of $0.1 million and $0.5 million of property and equipment and operating lease right-of-use assets, respectively, on the consolidated statement of operations as part of discontinued operations.

(c) During the 52 weeks ended April 27, 2024, we recognized restructuring and other charges of $3.3 million, comprised of severance and other employee termination costs, on the consolidated statement of operations as part of discontinued operations.

(a) During the 52 weeks ended April 27, 2024, we recognized an impairment loss (non-cash) of $0.6 million (both pre-tax and after-tax), comprised of $0.1 million and $0.5 million of property and equipment and operating lease right-of-use assets, respectively, on the Consolidated Statement of Operations as part of discontinued operations.

(b) During the 52 weeks ended April 27, 2024, we recognized restructuring and other charges of $3.3 million, comprised of severance and other employee termination costs, on the Consolidated Statement of Operations as part of discontinued operations.

Index to Form 10-K Index to FS

Results of Operations - Continuing Operations

- 52 weeks ended April 27, 2024 compared with the 52 weeks ended April 29, 2023

52 weeks ended, April 27, 2024 (a)

Dollars in thousands Retail Wholesale Corporate Services Eliminations Total

- 53 weeks ended May 3, 2025, compared with the 52 weeks ended April 27, 2024

53 weeks ended 52 weeks ended

Dollars in thousands May 3, 2025 April 27, 2024

Product sales and other $ 1,463,245 $ 1,430,456

3 unchanged sentences

Product and other cost of sales 1,193,015 1,144,973

1,106,987 89,832 — (61,443) 1,135,376

Rental cost of sales 79,351 77,249

Total cost of sales 1,272,366 1,222,222

Gross profit 332,947 22,799 — 1,030 356,776

Selling and administrative expenses

337,804 344,913

Selling and administrative expenses 283,800 311,574

Depreciation and amortization expense 37,939 40,560

35,294 5,228 38 — 40,560

Impairment loss (non-cash) 7,166 — — — 7,166

Restructuring and other charges

571 (813) 19,651 — 19,409

Impairment loss

Other (income) expense (1,572) 19,409

Operating income (loss) from continuing operations

$ 15,924 $ (33,796)

52 weeks ended, April 29, 2023 (a)

Dollars in thousands Retail Wholesale Corporate Services Eliminations Total

Percentage of Total Sales:

53 weeks ended 52 weeks ended

Dollars in thousands May 3, 2025 April 27, 2024

Product sales and other 90.9 % 91.3 %

3 unchanged sentences

Product and other cost of sales 81.5 % 80.0 %

1,086,095 88,091 — (54,704) 1,119,482

Rental cost of sales 54.0 % 56.5 %

Total cost of sales 79.0 % 78.0 %

Gross profit 331,344 18,275 — (180) 349,439

Selling and administrative expenses

21.0 % 22.0 %

Selling and administrative expenses 17.6 % 19.9 %

Depreciation and amortization expense 2.4 % 2.6 %

36,737 5,373 53 — 42,163

Impairment loss (non-cash) 6,008 — — — 6,008

Restructuring and other charges

Impairment loss

Other (income) expense

(0.1) % 1.2 %

Operating loss from continuing operations

Operating income (loss) from continuing operations

1.0 % (2.2) %

(a) 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.

Operating Loss from Continuing Operations excludes the results of operations related to the DSS Segment for all years reported above.

Index to Form 10-K Index to FS

The following table summarizes our sales:

52 weeks ended

Dollars in thousands April 27, 2024 April 29, 2023 $ Increase

53 weeks ended 52 weeks ended

Dollars in thousands May 3, 2025 April 27, 2024 $ Increase

Product sales and other $ 1,463,245 $ 1,430,456 $ 32,789 2.3%

1 unchanged sentence

Total sales $ 1,610,170 $ 1,567,135 $ 43,035 2.7%

Our total sales increased by $23.9 million, or 1.6%, to $1,567.1 million during the 52 weeks ended April 27, 2024 from $1,543.2 million during the 52 weeks ended April 29, 2023 which is primarily related to higher course material sales, primarily at our BNC First Day programs, and higher graduation product sales, offset by declines in a la carte courseware sales, including lower sales resulting from closed stores.

The components of the sales variances for the 52-week period are reflected in the table below.

Our total sales increased by $43.0 million, or 2.7%, to $1,610.2 million during the 53 weeks ended May 3, 2025 from $1,567.1 million during the 52 weeks ended April 27, 2024 which is primarily related to improved comp store sales driven by growth in our BNC First Day ® programs and general merchandise sales, offset by declines in a la carte course material sales and lower sales as a result of closed stores.

The components of the sales variances for the 53 weeks ended versus 52-week

Index to Form 10-K Index to FS

period are reflected in the table below.

Sales variances 53 weeks ended

April 27, 2024

Dollars in millions

3 unchanged sentences

Textbook rental deferral 1.6

Service revenue (b)

Retail Sales subtotal:

Wholesale Sales $ 6.3

Eliminations (d)

Total sales variance:

(a) Logo general merchandise sales for the Retail Segment are recognized on a net basis as commission revenue in the consolidated financial statements.

For Retail Gross Comparable Store Sales details, see below.

(b) Service revenue includes brand marketing programs, shipping and handling, and revenue from other programs.

(c) Other includes inventory liquidation sales to third parties, marketplace sales and certain accounting adjusting items related to return reserves, and other deferred items.

(d) Eliminates Wholesale sales and service fees to Retail and Retail commissions earned from Wholesale.

See discussion of intercompany activities and eliminations below.

The following is a store count summary for physical stores and virtual stores.

Fiscal 2024 Fiscal 2023

(a) Logo general merchandise sales recognized on a net basis as commission revenue in the consolidated financial statements.

For Gross Comparable Store Sales details, see below.

(b) Other includes inventory liquidation sales to third parties, marketplace sales and certain accounting adjusting items related to return reserves, and other deferred items.

The following is a store count summary for physical stores.

May 3, 2025 April 27, 2024

Number of Stores:

4 unchanged sentences

End of period 653 493 1,146 707 538 1,245

During the 52 weeks ended April 27, 2024, we opened 46 stores and closed 167 stores in the Retail Segment, with estimated net annual sales of $(74) million.

During the 53 weeks ended May 3, 2025, we opened 56 stores and closed 155 physical and virtual stores, with estimated net annual sales of $(53.5) million.

The Company’s strategic initiative is to close under-performing and less profitable stores.

Many institutions adopted First Day Complete in Fiscal 2024, and we plan to continue to scale the number of schools adopting First Day Complete in Fiscal 2025 and beyond.

Index to Form 10-K Index to FS

Generally, sales are impacted by revenue from net new/closed stores, conversion to BNC First Day programs, increased campus traffic, and an increase in the number of on campus activities and events, such as graduations, athletic events, alumni events and prospective student campus tours.

Retail total sales increased by $23.2 million, or 1.6%, to $1,514.9 million during the 52 weeks ended April 27, 2024 from $1,491.7 million during the 52 weeks ended April 29, 2023.

• Product sales and other increased by $23.1 million, or 1.7%, to $1,378.2 million during the 52 weeks ended April 27, 2024 from $1,355.1 million during the 52 weeks ended April 29, 2023.

◦ Course material product sales increased by $44.0 million, or 4.7%, to $972.0 million during the 52 weeks ended April 27, 2024, compared to $927.9 million in the prior year period.

The increase was primarily due to the growth of our BNC First Day programs, which increased by $127.2 million, or 36.7%, to $473.9 million, offset by a decline of $83.1 million in a la carte courseware sales, including lower sales resulting from closed stores.

Dollars in millions 52 weeks ended

April 27, 2024 April 29, 2023 $ Increase

Generally, sales are impacted by revenue from net new/closed stores, conversion to BNC First Day ® programs, increased campus and eCommerce website traffic, and an increase in the number of on campus activities and events, such as graduations, athletic events, alumni events and prospective student campus tours.

Our total sales increased by $43.0 million, or 2.7%, to $1,610.2 million during the 53 weeks ended May 3, 2025 from $1,567.1 million during the 52 weeks ended April 27, 2024.

• Product sales and other increased by $32.8 million, or 2.3%, to $1,463.2 million during the 53 weeks ended May 3, 2025 from $1,430.5 million during the 52 weeks ended April 27, 2024.

◦ Course material product sales increased by $49.5 million, or 5.1%, to $1,021.5 million during the 53 weeks ended May 3, 2025, compared to $972.0 million in the prior year period.

The increase was primarily due to the growth of our BNC First Day ® programs, which increased by $119.9 million, or 25.3%, to $593.8 million, offset by a decline in a la carte courseware sales, including lower sales resulting from closed stores.

Dollars in millions 53 weeks ended 52 weeks ended

May 3, 2025 April 27, 2024 $ Increase

First Day Complete Sales

4 unchanged sentences

$ 593.8 $ 473.9 $ 119.9 25%

First Day Complete Spring 2024 Spring 2023 # Increase

First Day Complete Spring 2025

Number of campus stores 191 160 31 19%

1 unchanged sentence

957,000 803,000 154,000 19%

(a) Total undergraduate and graduate student enrollment as reported by National Center for Education Statistics (NCES) as of October 26, 2023.

(a) Total undergraduate and graduate student enrollment as reported by National Center for Education Statistics (NCES) as of January 7, 2025.

Index to Form 10-K Index to FS

◦ General merchandise product net sales decreased by $8.8 million, or 2.4%, to $355.3 million, compared to $364.1 million in the prior year period, primarily due to closed stores, and lower cafe and convenience, trade, and supply product sales, offset by higher graduation product sales and higher emblematic product sales.

Retail Gross Comparable Store Sales for general merchandise increased by $6.6 million, or 1.2%, compared to the prior year period as discussed below.

◦ Service and other revenue increased by $0.4 million, or 1%, to $42.2 million, compared to $41.8 million in the prior year period, primarily due to higher other income for non-return rental penalty fees, offset by lower partnership marketing and marketplace sales.

• Rental income for course materials increased by $0.1 million, or 0.1%, to $136.7 million during the 52 weeks ended April 27, 2024 from $136.6 million during the 52 weeks ended April 29, 2023, primarily due to the growth of our BNC First Day programs, offset by closed stores and the shift to digital products.

Retail Gross Comparable Store Sales

To supplement the Total Sales table presented above, the Company uses Retail Gross Comparable Store Sales as a key performance indicator.

Retail Gross Comparable Store Sales includes sales from physical and virtual stores that have been open for an entire fiscal year period and does not include sales from permanently closed stores for all periods presented.

For Retail Gross Comparable Store Sales, sales for logo general merchandise fulfilled by Lids, Fanatics and digital agency sales are included on a gross basis in Retail Gross Comparable Store Sales compared to a net basis as commission revenue in our consolidated financial statements.

We believe the current Retail Gross Comparable Store Sales calculation method reflects management’s view that such comparable store sales are an important measure of the growth in sales when evaluating how established stores have performed over time.

Gross Comparable Store Sales for general merchandise increased by $10.5 million, or 1.9%, compared to the prior year period as discussed below.

◦ Service and other revenue decreased by $7.9 million, or 8.4%, to $86.5 million, compared to $94.4 million in the prior year period, primarily due to higher other income for non-return rental penalty fees, offset by lower partnership marketing and marketplace sales.

• Rental income for course materials increased by $10.2 million, or 7.5%, to $146.9 million during the 53 weeks ended May 3, 2025 from $136.7 million during the 52 weeks ended April 27, 2024, primarily due to the growth of our BNC First Day ® programs, offset by closed stores and the shift to digital products.

Gross Comparable Store Sales

To supplement the Total Sales table presented above, the Company uses Gross Comparable Store Sales as a key performance indicator.

Gross Comparable Store Sales includes sales from physical and virtual stores that have been open for an entire fiscal year period and does not include sales from permanently closed stores for all periods presented.

For Gross Comparable Store Sales, sales for logo general merchandise fulfilled by Lids, Fanatics and digital agency sales are included on a gross basis in Gross Comparable Store Sales compared to a net basis as commission revenue in our consolidated financial statements.

We believe the current Gross Comparable Store Sales calculation method reflects management’s view that such comparable store sales are an important measure of the growth in sales when evaluating how established stores have performed over time.

We present this metric as additional useful information about the Company’s operational and financial performance and to allow greater transparency with respect to important metrics used by management for operating and financial decision-making.

Retail Gross Comparable Store Sales are also referred to as "same-store" sales by others within the retail industry and the method of calculating comparable store sales varies across the retail industry.

As a result, our calculation of comparable

Index to Form 10-K Index to FS

store sales is not necessarily comparable to similarly titled measures reported by other companies and is intended only as supplemental information and is not a substitute for net sales presented in accordance with GAAP.

The increase in course material sales was primarily due to the growth of BNC First Day equitable and inclusive access programs (as discussed above), offset by declines in a la carte courseware sales.

The decrease in general merchandise sales are primarily related to lower logo product sales, as well as lower trade books and cafe and convenience product sales, offset by higher graduation and supplies product sales.

Retail Gross Comparable Store Sales variances for Retail by category for the 52-week period are as follows:

Dollars in millions 52 weeks ended

April 27, 2024 April 29, 2023

Gross Comparable Store Sales are also referred to as "same-store" sales by others within the retail industry and the method of calculating comparable store sales varies across the retail industry.

As a result, our calculation of comparable store sales is not necessarily comparable to similarly titled measures reported by other companies and is intended only as supplemental information and is not a substitute for net sales presented in accordance with GAAP.

Gross Comparable Store Sales increased by $117.2 million or 7.5% during the 53 weeks ended May 3, 2025.

Course Materials sales increased by $106.7 million or 10.6% primarily due to the growth of BNC First Day® affordable access course material programs (as discussed above), offset by declines in a la carte courseware sales.

The increase in general merchandise sales are primarily related to higher graduation and supplies product sales and cafe and convenience product sales, with logo product sales remaining flat, offset by lower trade books.

Gross Comparable Store Sales variances by category for the 53 and 52 weeks ended May 3, 2025 and April 27, 2024 are as follows:

Dollars in millions 53 weeks ended 52 weeks ended

May 3, 2025 April 27, 2024

Textbooks (Course Materials) $ 106.7 10.6% $ 70.4 7.2%

General Merchandise 10.5 1.9% 6.6 1.2%

Total Retail Gross Comparable Store Sales $ 77.0 5.0% $ 48.0 3.2%

Wholesale sales increased by $6.3 million, or 5.9%, to $112.6 million during the 52 weeks ended April 27, 2024 from $106.3 million during the 52 weeks ended April 29, 2023.

The increase is primarily due to lower returns and allowances of $8.0 million, partially offset by a decline in gross sales of $1.7 million from lower customer demand resulting from a shift in buying patterns from physical textbooks to digital products, and lower demand from other third-party clients.

Total Gross Comparable Store Sales

$ 117.2 7.5% $ 77.0 5.0%

Cost of Sales and Gross Margin

Our cost of sales decreased as a percentage of sales to 77.2% during the 52 weeks ended April 27, 2024 compared to 77.4% during the 52 weeks ended April 29, 2023.

Our gross margin increased by $7.3 million, or 2.1%, to $356.8 million, or 22.8% of sales, during the 52 weeks ended April 27, 2024 from $349.5 million, or 22.6% of sales, during the 52 weeks ended April 29, 2023.

The variances by segment are discussed by segment below.

The following table summarizes the Retail cost of sales:

Our cost of sales increased as a percentage of sales to 79.0% during the 53 weeks ended May 3, 2025 compared to 78.0% during the 52 weeks ended April 27, 2024.

Our gross margin decreased by $7.1 million, or (2.1)%, to $337.8 million, or 21.0% of sales, during the 53 weeks ended May 3, 2025 from $344.9 million, or 22.0% of sales, during the 52 weeks ended April 27, 2024.

Index to Form 10-K Index to FS

The following table summarizes the cost of sales for the 53 and 52 weeks ended May 3, 2025 and April 27, 2024:

53 weeks ended 52 weeks ended

Dollars in thousands April 27, 2024 % of

Dollars in thousands May 3, 2025 % of

Related Sales April 27, 2024 % of

1 unchanged sentence

Product and other cost of sales $ 1,193,015 81.5% $ 1,144,973 80.0%

$ 1,106,987 80.3% $ 1,086,095 80.1%

Rental cost of sales $ 79,351 54.0% $ 77,249 56.5%

74,983 54.9% 74,287 54.4%

Total cost of sales $ 1,272,366 79.0% $ 1,222,222 78.0%

$ 1,181,970 78.0% $ 1,160,382 77.8%

The following table summarizes the Retail gross margin:

The following table summarizes the gross margin for the 53 and 52 weeks ended May 3, 2025 and April 27, 2024:

53 weeks ended 52 weeks ended

Dollars in thousands April 27, 2024 % of

Dollars in thousands May 3, 2025 % of

Related Sales April 27, 2024 % of

3 unchanged sentences

Gross Margin $ 337,804 21.0% $ 344,913 22.0%

For the 52 weeks ended April 27, 2024, the Retail gross margin as a percentage of sales remained flat at 22.2% as discussed below:

• Product and other gross margin decreased (20 basis points) driven primarily by lower margin rates for course materials due to higher markdowns, including markdowns related to closed stores (155 basis points), partially offset by lower contract costs as a percentage of sales related to our college and university contracts as a result of the shift to digital, the adoption of our BNC First Day models, and lower renewals for under-performing school contracts (85 basis points) and favorable product sales mix, including higher margin First Day Complete course material sales (50 basis points).

Index to Form 10-K Index to FS

• Retail Rental gross margin as a percentage of sales decreased (30 basis points), driven primarily by lower rental margin rates, higher markdowns, partially offset by lower contract costs as a percentage of sales related to our college and university contracts as a result of the shift to digital, the adoption of our BNC First Day models, and lower renewals for under-performing school contracts, and a favorable rental sales mix.

The cost of sales and gross margin for Wholesale were $89.8 million, or 79.8% of sales, and $22.8 million, or 20.2% of sales, respectively, during the 52 weeks ended April 27, 2024.

The cost of sales and gross margin for Wholesale were $88.1 million, or 82.8% of sales, and $18.3 million, or 17.2% of sales, respectively, during the 52 weeks ended April 29, 2023.

The increase gross margin was primarily due to lower returns and allowances of $5.3 million, partially offset by higher cost of product of $0.8 million.

Intercompany Eliminations

During the 52 weeks ended April 27, 2024 and 52 weeks ended April 29, 2023, sales eliminations were $60.4 million and $54.9 million, respectively.

These sales eliminations represent the elimination of Wholesale sales and fulfillment service fees to Retail and the elimination of Retail commissions earned from Wholesale.

During the 52 weeks ended April 27, 2024 and 52 weeks ended April 29, 2023, the cost of sales eliminations were $61.4 million and $54.7 million, respectively.

These cost of sales eliminations represent (i) the recognition of intercompany profit for Retail inventory that was purchased from Wholesale in a prior period that was subsequently sold to external customers during the current period and the elimination of Wholesale service fees charged for fulfillment of inventory for virtual store sales, net of (ii) the elimination of intercompany profit for Wholesale inventory purchases by Retail that remain in ending inventory at the end of the current period.

During the 52 weeks periods ended April 27, 2024 and 52 weeks ended April 29, 2023, the gross margin eliminations were $1.0 million and $(0.2) million, respectively.

The gross margin eliminations reflect the net impact of the sales eliminations and cost of sales eliminations during the above mentioned reporting periods.

For the 53 weeks ended May 3, 2025, the gross margin as a percentage of sales decreased as discussed below:

• Product and other gross margin decreased (150 basis points), primarily due to lower margin rates (230 basis points) due to unfavorable non-logo general merchandise, unfavorable shrink reserve, and margin erosion from growth in publisher stock programs, offset by lower contract costs as a percentage of sales (80 basis points) related to our college and university contracts as a result of the shift to digital and First Day models.

• Rental gross margin as a percentage of sales increased (250 basis points), driven primarily by higher rental margin rates, higher markdowns, along with lower contract costs as a percentage of sales related to our college and university contracts as a result of the shift to digital, the adoption of our BNC First Day ® models.

Selling and Administrative Expenses

53 weeks ended 52 weeks ended

Dollars in thousands April 27, 2024 % of

Dollars in thousands May 3, 2025 % of

Sales April 27, 2024 % of

Selling and administrative expenses $ 283,800 17.6% $ 311,574 19.9%

During the 52 weeks ended April 27, 2024, selling and administrative expenses decreased by $46.0 million, or 12.9%, to $311.6 million from $357.6 million during the 52 weeks ended April 29, 2023.

The variances by segment are discussed by segment below.

For Retail, selling and administrative expenses decreased by $42.3 million, or 13.2%, to $278.4 million during the 52 weeks ended April 27, 2024 from $320.7 million during the 52 weeks ended April 29, 2023.

This decrease was primarily due to a $15.0 million decrease in closed stores payroll and related operating costs, cost savings initiatives comprised of a $19.3 million decrease in comparable store payroll expense and related operating costs and a $10.9 million decrease in corporate payroll expense, infrastructure and product development costs, partially offset by a $2.9 million increase in new store payroll expense and related operating costs.

For Wholesale, selling and administrative expenses decreased by $1.6 million, or 10.6%, to $13.4 million during the 52 weeks ended April 27, 2024 from $15.0 million during the 52 weeks ended April 29, 2023.

The decrease was primarily due to cost savings initiatives comprised of lower payroll expense of $1.8 million, partially offset by higher operating expenses of $0.2 million.

Corporate Services

Corporate Services' selling and administrative expenses decreased by $2.3 million, or 10.6%, to $19.7 million during the 52 weeks ended April 27, 2024 from $22.0 million during the 52 weeks ended April 29, 2023.

The decrease was primarily due to cost savings initiatives comprised of lower payroll expense of $1.5 million and lower operating costs of $0.8 million.

Index to Form 10-K Index to FS

During the 53 weeks ended May 3, 2025, selling and administrative expenses decreased by $27.8 million, or 8.9%, to $283.8 million from $311.6 million during the 52 weeks ended April 27, 2024, as a result of our continued cost savings initiatives.

Depreciation and Amortization Expense

53 weeks ended 52 weeks ended

Dollars in thousands April 27, 2024 % of

Dollars in thousands May 3, 2025 % of

Sales April 27, 2024 % of

Depreciation and amortization expense $ 37,939 2.4% $ 40,560 2.6%

Depreciation and amortization expense decreased by $1.6 million to $40.6 million during the 52 weeks ended April 27, 2024 from $42.2 million during the 52 weeks ended April 29, 2023.

Capital expenditures decreased by $11.0 million during the 52 weeks ended April 27, 2024 compared to the prior year period and depreciable assets and intangibles were lower due to the store impairment loss recognized during Fiscal 2024 and Fiscal 2023.

Depreciation and amortization expense decreased by $2.6 million to $37.9 million during the 53 weeks ended May 3, 2025 from $40.6 million during the 52 weeks ended April 27, 2024.

Capital expenditures decreased by $1.7 million during the 53 weeks ended May 3, 2025 compared to the prior year period and depreciable assets and intangibles were lower due to the store impairment loss recognized during Fiscal 2025 and Fiscal 2024.

Impairment loss (non-cash)

We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with ASC 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets .

For information, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 2.

Summary of Significant Accounting Policies and Note 6.

Fair Value Measurements .

During the 52 weeks ended April 27, 2024, we evaluated certain of our store-level long-lived assets in the Retail segment for impairment.

We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

During the 53 weeks ended May 3, 2025, we evaluated certain of our store-level long-lived assets for impairment.

Based on the results of the impairment tests, we recognized an impairment loss (non-cash) of $1.7 million (both pre-tax and after-tax), comprised of $0.3 million, $0.3 million, and $1.1 million of property and equipment, operating lease right-of-use assets, and amortizable intangibles, respectively, on the Consolidated Statement of Operations.

During the 52 weeks ended April 29, 2023, we evaluated certain of our store-level long-lived assets in the Retail segment for impairment.

Index to Form 10-K Index to FS

During the 52 weeks ended April 27, 2024, we evaluated certain of our store-level long-lived assets for impairment.

Based on the results of the impairment tests, we recognized an impairment loss (non-cash) of $7.2 million (both pre-tax and after-tax), comprised of $0.4 million, $3.6 million, and $3.2 million of property and equipment, operating lease right-of-use assets, and amortizable intangibles, respectively, on the Consolidated Statement of Operations.

Restructuring and other charges

During the 52 weeks ended April 27, 2024, we recognized restructuring and other charges totaling $19.4 million, comprised primarily of $19.6 million, primarily for costs primarily associated with professional service costs for restructuring and process improvements (see next paragraph below) and $1.1 million for severance and other employee termination and benefit costs associated with elimination of various positions as part of cost reduction objectives, partially offset by a $1.3 million in an actuarial gain related to a frozen retirement benefit plan (non-cash).

For additional information, see Item 1.

Financial Statements - Note 2.

Summary of Significant Accounting Policies and Note 7.

Fair Value Measurements .

Other (income) and expenses

During the 53 weeks ended May 3, 2025, we recognized other income totaling $1.6 million, comprised primarily of an $8.8 million gain related to the termination of liabilities related to a frozen retirement benefit plan (non-cash), primarily offset by $2.1 million related to severance and other employee termination and benefit costs associated with elimination of various positions as part of cost reduction initiatives, $2.1 million for legal and advisory professional service costs primarily related to restructuring activities and other charges, of $2.0 million of severance primarily related to the resignation of our former Chief Executive Officer on June 11, 2024, $1.4 million of which is included in accrued liabilities in the Consolidated Balance Sheet as of May 3, 2025, and $1.1 million related to the settlement of a class action lawsuit and related legal fees.

We recognized an increase to additional paid in capital on the Consolidated Balance Sheet for the reimbursement of the former Chief Executive Officer severance from VitalSource (a principal stockholder) as part of the June 10, 2024 financing transactions.

During the 52 weeks ended April 27, 2024, we recognized other expense totaling $19.4 million, comprised primarily of $19.6 million, primarily for costs primarily associated with professional service costs for restructuring and process improvements (see next paragraph below) and $1.1 million for severance and other employee termination and benefit costs associated with elimination of various positions as part of cost reduction objectives, partially offset by a $1.3 million in an actuarial gain related to a frozen retirement benefit plan (non-cash).

Pursuant to the July 28, 2023 Credit Agreement amendment, the Board established a committee consisting of three independent directors to explore, consider, solicit expressions of interest or proposals for, respond to any communications, inquiries or proposals regarding, and advise as to all strategic alternatives to effect a “Specified Liquidity Transaction” (as defined in the Credit Agreement).

Restructuring and other expenses include costs associated with the costs of this committee, as well as other related professional service costs.

On June 10, 2024, we completed the Transactions, including the Rights Offering, the Private Investment, the Term Loan Debt Conversion, and the 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.

For additional information, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 17.

Subsequent Events.

During the 52 weeks ended April 29, 2023, we recognized restructuring and other charges totaling $10.1 million, comprised primarily of $4.4 million for severance and other employee termination and benefit costs associated with elimination of various positions as part of cost reduction objectives, and $5.7 million, primarily for costs primarily associated with professional service costs for restructuring and process improvements.

Operating Loss

Operating Income (Loss)

53 weeks ended 52 weeks ended

Dollars in thousands April 27, 2024 % of

Dollars in thousands May 3, 2025 % of

Sales April 27, 2024 % of

Operating Loss $ (21,933) (1.4)% $ (66,446) (4.3)%

Our operating loss was $(21.9) million during the 52 weeks ended April 27, 2024 compared to operating loss of $(66.4) million during the 52 weeks ended April 29, 2023.

Operating income (loss) $ 15,924 1.0% $ (33,796) (2.2)%

Our operating income was $15.9 million during the 53 weeks ended May 3, 2025 compared to operating loss of $33.8 million during the 52 weeks ended April 27, 2024.

The improvements in operating results were due to the matters discussed above.

For the 52 weeks ended April 27, 2024, excluding the $19.4 million of restructuring and other charges and the $7.2 million impairment loss (non-cash), all discussed above, operating income was $4.6 million (or 0.3% of sales).

Loss on extinguishment of debt

On June 10, 2024, our existing Term Loan lenders converted approximately $34.0 million of outstanding principal and accrued and unpaid interest into our Common Stock.

We recognized a loss on extinguishment of debt of $55.2 million during the 53 weeks ended May 3, 2025 in the Consolidated Statement of Operations in connection with the Term Loan Debt Conversion which represents the difference between the Common Stock fair value issued upon conversion and the net carrying value of the Term Loan, plus unamortized deferred financing costs related to the Term Loan.

As a result of the Term Loan Debt Conversion, the Term Loan and its related agreements were terminated.

There were no debt conversions in the comparable prior period.

Financial Statements - Note 6.

Equity and Earnings (Loss) Per Share and Note 9.

Index to Form 10-K Index to FS

For the 52 weeks ended April 29, 2023, excluding the $10.1 million of restructuring and other charges and the $6.0 million impairment loss (non-cash), all discussed above, operating loss was $(50.3) million (or (3.3)% of sales).

Interest Expense, Net

52 weeks ended

Dollars in thousands April 27, 2024 April 29, 2023

53 weeks ended 52 weeks ended

Dollars in thousands May 3, 2025 April 27, 2024

Interest expense, net $ 22,260 $ 40,365

Net interest expense increased by $17.7 million to $40.4 million during the 52 weeks ended April 27, 2024 from $22.7 million during the 52 weeks ended April 29, 2023.

Interest expense increased primarily due to higher borrowings, higher interest rates and $10.0 million resulting from increased amortization of deferred financing costs.

Net interest expense decreased by $18.1 million to $22.3 million during the 53 weeks ended May 3, 2025 from $40.4 million during the 52 weeks ended April 27, 2024.

Interest expense decreased primarily due to lower borrowings, lower interest rates and an $8.0 million decrease in amortization of deferred financing costs.

The following table disaggregates interest expense for the 52-week period:

52 weeks ended

Dollars in thousands April 27, 2024 April 29, 2023

53 weeks ended 52 weeks ended

Dollars in thousands May 3, 2025 April 27, 2024

Interest Incurred

8 unchanged sentences

Total Interest Expense $ 22,260 $ 40,365

Cash interest paid during the 52 weeks ended April 27, 2024 and April 29, 2023 was $24.9 million and $19.0 million, respectively.

Cash interest paid during the 53 weeks ended May 3, 2025 and the 52 weeks ended April 27, 2024 was $17.9 million and $24.9 million, respectively.

Income Tax Expense

53 weeks ended 52 weeks ended

Dollars in thousands April 27, 2024 Effective Rate April 29, 2023 Effective Rate

Dollars in thousands May 3, 2025 Effective Rate April 27, 2024 Effective Rate

Income tax expense $ 4,256 (6.9)% $ 858 (1.2)%

$ 183 (0.3)% $ 1,011 (1.1)%

We recorded an income tax expense of $0.2 million on a pre-tax loss of $(62.3) million during the 52 weeks ended April 27, 2024, which represented an effective income tax rate of (0.3)% and an income tax expense of $1.0 million on a pre-tax loss of $(89.1) million during the 52 weeks ended April 29, 2023, which represented an effective income tax rate of (1.1)%.

The effective tax rate for the 52 weeks ended April 27, 2024 is materially consistent with the prior year comparable period.

We recorded an income tax expense of $4.3 million on a pre-tax loss of $61.6 million during the 53 weeks ended May 3, 2025, which represented an effective income tax rate of 6.9% and an income tax expense of $0.9 million on a pre-tax loss of $74.2 million during the 52 weeks ended April 27, 2024, which represented an effective income tax rate of 1.2%.

The effective tax rate for the 53 weeks ended May 3, 2025, is higher than the prior year comparable period due to permanent differences related to the debt-to-equity conversion, attribute limitations due to IRC 382, and valuation allowance movement.

Net Loss from Continuing Operations

52 weeks ended

Dollars in thousands April 27, 2024 April 29, 2023

53 weeks ended 52 weeks ended

Dollars in thousands May 3, 2025 April 27, 2024

Net loss from continuing operations

As a result of the factors discussed above, we reported a net loss from continuing operations of $(62.5) million during the 52 weeks ended April 27, 2024, compared with a net loss of $(90.1) million during the 52 weeks ended April 29, 2023.

Adjusted Earnings (non-GAAP) - Continuing Operations is $(35.9) million during the 52 weeks ended April 27, 2024, compared with $(74.0) million during the 52 weeks ended April 29, 2023.

See Adjusted Earnings (non-GAAP) discussion below.

$ (65,825) $ (75,019)

As a result of the factors discussed above, we reported a net loss from continuing operations of $65.8 million during the 53 weeks ended May 3, 2025, compared with a net loss of $75.0 million during the 52 weeks ended April 27, 2024.

Adjusted Net Loss (non-GAAP) - Continuing Operations is $61.7 million during the 53 weeks ended May 3, 2025, compared with a Adjusted Net Loss (non-GAAP) - Continuing Operations of $45.1 million during the 52 weeks ended April 27, 2024.

See Adjusted Net Loss (non-GAAP) .

Index to Form 10-K Index to FS

Use of Non-GAAP Measures - Adjusted Earnings, Adjusted EBITDA, Adjusted EBITDA by Segment, and Free Cash Flow

To supplement our results prepared in accordance with generally accepted accounting principles (“GAAP”), we use the measure of Adjusted Earnings, Adjusted EBITDA, Adjusted EBITDA by Segment, and Free Cash Flow, which are non-GAAP financial measures under Securities and Exchange Commission (the “SEC”) regulations.

We define Adjusted Earnings as net income (loss) from continuing operations adjusted for certain reconciling items that are subtracted from or added to net income (loss) from continuing operations.

We define Adjusted EBITDA as net income (loss) from continuing operations plus (1) depreciation and amortization;

(2) interest expense and (3) income taxes, (4) as adjusted for items that are subtracted from or added to net income (loss) from continuing operations.

We define Free Cash Flow as Cash Flows from Operating Activities less capital expenditures, cash interest and cash taxes.

To properly and prudently evaluate our business, we encourage you to review our consolidated financial statements included elsewhere in this Form 10-K, the reconciliation of Adjusted Earnings to net income (loss) from continuing operations, the reconciliation of consolidated Adjusted EBITDA to consolidated net income (loss) from continuing operations, and the reconciliation of Adjusted EBITDA by Segment to net income (loss) from continuing operations by segment, the most directly comparable financial measure presented in accordance with GAAP, set forth in the tables below.

Use of Non-GAAP Measures - Adjusted Net Earnings (Loss), Adjusted EBITDA, and Adjusted Free Cash Flow

To supplement our results prepared in accordance with generally accepted accounting principles (“GAAP”), we present certain non-GAAP financial measures, including Adjusted Net Earnings (Loss), Adjusted EBITDA, and Adjusted Free Cash Flow.

These measures are "non-GAAP financial measures" as defined in Regulation G of the Securities Exchange Act of 1934 and Item 10(e) of Regulation S-K.

We define Adjusted Net Earnings (Loss) as net income (loss) from continuing operations, the most directly comparable GAAP measure, adjusted for certain reconciling items that are subtracted from or added to net income (loss) from continuing operations.

We define Adjusted EBITDA as net income (loss) from continuing operations, the most directly comparable GAAP measure, plus (1) depreciation and amortization;

(2) interest expense (3) income taxes, and (4) as adjusted for non-cash or non-recurring items, and other adjustments permitted under our credit agreement.

We define Adjusted Free Cash Flow as cash flows from operating activities, the most directly comparable GAAP measure, less capital expenditures, cash interest and cash taxes.

We consistently calculate these non-GAAP measures using the same methodology each period.

Management uses these measures as internal performance metrics to evaluate results at the consolidated level, to plan and forecast performance, to allocate capital, and in connection with performance incentive plans.

The Board of Directors and management also use Adjusted EBITDA as one of the primary tools for assessing operating performance and determining capital allocation.

We believe that Adjusted Free Cash Flow provides useful additional information about liquidity, including cash available for debt service, working capital requirements, and strategic investments.

We encourage investors to review our consolidated financial statements included elsewhere in this Form 10-K.

Reconciliations of Adjusted Net Earnings (Loss) to net income (loss) from continuing operations, Adjusted EBITDA to net income (loss) from continuing operations, and Adjusted EBITDA - Discontinued to net income (loss) from discontinuing operations, and Adjusted Free Cash flow to cash flow from operating activities, the most directly comparable financial measure presented in accordance with GAAP, set forth in the tables below.

All of the items included in the reconciliations below are either (i) non-cash items or (ii) items that management does not consider in assessing our on-going operating performance.

These non-GAAP financial measures are not intended as substitutes for and should not be considered superior to measures of financial performance prepared in accordance with GAAP.

In addition, our use of these non-GAAP financial measures may be different from similarly named measures used by other companies, limiting their usefulness for comparison purposes.

We review these non-GAAP financial measures as internal measures to evaluate our performance at a consolidated level and at a segment level and manage our operations.

We believe that these measures are useful performance measures which are used by us to facilitate a comparison of our on-going operating performance on a consistent basis from period-to-period.

We believe that these non-GAAP financial measures provide for a more complete understanding of factors and trends affecting our business than measures under GAAP can provide alone, as they exclude certain items that management believes do not reflect the ordinary performance of our operations in a particular period.

Our Board of Directors and management also use Adjusted EBITDA and Adjusted EBITDA by Segment, at a consolidated and at a segment level, as one of the primary methods for planning and forecasting expected performance, for evaluating on a quarterly and annual basis actual results against such expectations, and as a measure for performance incentive plans.

Management also uses Adjusted EBITDA by Segment to determine segment capital allocations.

We believe that the inclusion of Adjusted Earnings, Adjusted EBITDA, and Adjusted EBITDA by Segment provides investors useful and important information regarding our operating results, in a manner that is consistent with management's evaluation of business performance.

We believe that Free Cash Flow provides useful additional information concerning cash flow available to meet future debt service obligations and working capital requirements and assists investors in their understanding of our operating profitability and liquidity as we manage the business to maximize margin and cash flow.

For a discussion regarding the Seasonality of our business, see Management Discussion and Analysis - Seasonality discussion above.

Consolidated Adjusted Earnings (non-GAAP) - Continuing Operations

52 weeks ended

Dollars in thousands April 27, 2024 April 29, 2023

In addition, our definitions of these non-GAAP financial measures may differ from those used by other companies, limiting comparability.

For a discussion regarding the seasonality of our business, see Management's Discussion and Analysis - Seasonality discussion above.

Consolidated Adjusted Net Loss (non-GAAP) - Continuing Operations

53 weeks ended 52 weeks ended

Dollars in thousands May 3, 2025 April 27, 2024

Net loss from continuing operations (a)

$ (65,825) $ (75,019)

Reconciling items, after-tax (below)

Reconciling items

Adjusted Net Loss (non-GAAP)

$ (61,717) $ (45,064)

Adjusted Earnings (non-GAAP) $ (35,906) $ (74,003)

Reconciling items, pre-tax

Impairment loss (non-cash) (b)

Reconciling items

Impairment loss

$ 1,713 $ 7,166

Content amortization (non-cash) (c)

Restructuring and other charges (b)

Stock-based compensation expense

Other (income) expense (b)

Professional services costs related to restructuring

Legal settlement and related legal fees

Severance and cost reduction initiatives

Settlement of obligations and actuarial gain related to frozen retirement plan

(8,780) (1,339)

Reconciling items (d)

Other professional services fees

Estimated tax effect on reconciling items above (c)

Reconciling items

$ 4,108 $ 29,955

1 unchanged sentence

Consolidated Adjusted EBITDA (non-GAAP) - Continuing Operations

52 weeks ended

Dollars in thousands April 27, 2024 April 29, 2023

53 weeks ended 52 weeks ended

Dollars in thousands May 3, 2025 April 27, 2024

Net loss from continuing operations (a)

2 unchanged sentences

Interest expense, net 22,260 40,365

Income tax expense (benefit) 183 1,011

Impairment loss (non-cash) (b)

Content amortization (non-cash) (c)

Restructuring and other charges (b)

Income tax expense 4,256 858

Impairment loss (b)

Loss on extinguishment of debt 55,233 —

Other (income) expense (b)

(1,572) 19,409

Stock-based compensation expense (non-cash)

Adjusted EBITDA (Non-GAAP) - Continuing Operations $ 59,390 $ 36,719

2 unchanged sentences

(a) 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.

Net Loss from Continuing Operations excludes the results of operations related to the DSS Segment for all years reported above.

(b) See Management Discussion and Analysis - Results of Operations discussion above.

(c) Amortization expense (non-cash) related to content development costs are included in cost of goods sold on our consolidated statements of operations.

(d) There is no pro forma income tax effect of the non-GAAP items.

The following is Adjusted EBITDA - Continuing Operations by Segment for Fiscal 2024 and Fiscal 2023:

Adjusted EBITDA - by Segment 52 weeks ended April 27, 2024

Dollars in thousands Retail Wholesale Corporate Services (a)

Eliminations Total

Net income (loss) from continuing operations (b)

$ 11,457 $ 4,945 $ (79,916) $ 1,033 $ (62,481)

Depreciation and amortization expense 35,294 5,228 38 — 40,560

Interest expense, net — — 40,365 — 40,365

Income tax expense — — 183 — 183

Impairment loss (non-cash) (c)

7,166 — — — 7,166

Restructuring and other charges (c)

571 (813) 19,651 — 19,409

Adjusted EBITDA (non-GAAP) $ 54,488 $ 9,360 $ (19,679) $ 1,033 $ 45,202

Index to Form 10-K Index to FS

Adjusted EBITDA - by Segment 52 weeks ended April 29, 2023

Dollars in thousands Retail Wholesale Corporate Services (a)

Eliminations Total

Net loss from continuing operations (b)

$ (35,095) $ (3,050) $ (51,970) $ (25) $ (90,140)

Depreciation and amortization expense 36,737 5,373 53 — 42,163

Interest expense, net — — 22,683 — 22,683

Income tax expense

— — 1,011 — 1,011

Impairment loss (non-cash) (c)

6,008 — — — 6,008

Content amortization (non-cash) (d)

Restructuring and other charges (c)

2,964 916 6,223 — 10,103

Adjusted EBITDA (non-GAAP) $ 10,640 $ 3,239 $ (22,000) $ (25) $ (8,146)

(a) Interest expense is reflected in Corporate Services as it is primarily related to our Credit Agreement and Term Loan Agreement which fund our operating and financing needs across the organization.

Income taxes are reflected in Corporate Services as we record our income tax provision on a consolidated basis.

(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.

Net Loss from Continuing Operations excludes the results of operations related to the DSS Segment for all years reported above.

(d) Amortization expense (non-cash) related to content development costs are included in cost of goods sold on our consolidated statements of operations.

Net Loss from Continuing Operations excludes the results of operations related to the DSS Segment for all years reported.

(b) See Management Discussion and Analysis - Results of Operations .

For Fiscal 24, due to losses generated and use of the valuation allowance, the rate applied was 0%.

Adjusted EBITDA (non-GAAP) - Discontinued Operations 52 weeks ended

April 27, 2024 April 29, 2023

Loss from discontinued operations (a)

$ (730) $ (11,722)

April 27, 2024

Loss from discontinued operations

Depreciation and amortization expense 3

Income tax expense 20

Content amortization (non-cash) — 6,594

Stock-based compensation expense (non-cash)

Gain on sale of business (3,545)

Impairment loss (non-cash) 610

Restructuring and other charges 3,308 1,848

Other expense

Transaction costs 13

Adjusted EBITDA (Non-GAAP) - Discontinued Operations $ (486)

(a) 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.

Net Loss from Continuing Operations excludes the results of operations related to the DSS Segment for all years reported above.

For additional information, see Note 2.

Summary of Significant Accounting Policies.

Index to Form 10-K Index to FS

Free Cash Flow (non-GAAP) - Continuing Operations

52 weeks ended

Dollars in thousands April 27, 2024 April 29, 2023

Net cash flows (used in) provided by operating activities from continuing operations (a)

Adjusted Free Cash Flow (non-GAAP) - Continuing Operations

53 weeks ended 52 weeks ended

Dollars in thousands May 3, 2025 April 27, 2024

Net cash flows used in operating activities from continuing operations (a)

$ (85,413) $ (1,545)

3 unchanged sentences

Cash taxes (refund) paid 2,130 (7,293)

Free Cash Flow (non-GAAP) $ (33,265) $ 62,402

Adjusted Free Cash Flow (non-GAAP)

$ (118,349) $ (33,265)

(a) See Liquidity and Capital Resources - Sources and Uses of Cash Flow discussion below.

Index to Form 10-K Index to FS

Given the growth of our BNC First Day ® programs, the timing of cash collection from our school partners may shift to periods subsequent to when the revenue is recognized.

When a school adopts our BNC First Day ® affordable access course material program offerings, cash collection from the school generally occurs after the institution's drop/add dates, which is later in the working capital cycle, particularly in our third quarter given the timing of the Spring Term and our quarterly reporting period, as compared to direct-to-student point-of-sale transactions where cash is generally collected during the point-of-sale transaction or within a few days from the credit card processor.

(b) Purchases of property and equipment are also referred to as capital expenditures.

1 unchanged sentence

The following table provides the components of total purchases of property and equipment:

Capital Expenditures - Continuing Operations

52 weeks ended

Dollars in thousands April 27, 2024 April 29, 2023

Capital Expenditures

53 weeks ended 52 weeks ended

Dollars in thousands May 3, 2025 April 27, 2024

Physical store capital expenditures $ 8,866 $ 5,813

3 unchanged sentences

Liquidity and Capital Resources

During Fiscal 2024, our primary sources of cash are net cash flows from operating activities, funds available under our Credit Agreement, Term Loan Agreement, and short-term vendor financing.

During Fiscal 2025, our primary sources of cash are net cash flows from operating activities, funds available under our Credit Agreement, and short-term vendor financing.

Our liquidity is highly dependent on the seasonal nature of our business, particularly with respect to course material sales, as sales are generally highest in the second and third fiscal quarters, when college students purchase textbooks for the upcoming Fall and Spring semesters, respectively.

As of April 27, 2024, we had $28.6 million of cash on hand, including $18.1 million of restricted cash primarily related to segregated funds for commission due to Lids for logo merchandise sales as per the F/L Relationship-related agreements.

Going Concern evaluation in conjunction with the issuance of the April 27, 2024 Consolidated Financial Statements

The accompanying consolidated financial statements are prepared in accordance with U.S.

GAAP applicable to a going concern.

This presentation contemplates the realization of assets and the satisfaction of liabilities in the normal course of business and does not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described below.

Pursuant to ASC 205-40, Presentation of Financial Statements — Going Concern (“ASC 205-40”) , management must evaluate whether there are conditions and events, considered in aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that these consolidated financial statements are issued.

Our primary sources of cash are net cash flows from operating activities and funds available under our Credit Facility.

Our liquidity is highly dependent on the seasonal nature of our business, particularly with respect to course material sales, as sales

Index to Form 10-K Index to FS

are generally highest in the second and third fiscal quarters, when college students generally purchase textbooks for the upcoming Fall and Spring semesters, respectively.

The tightening of our available credit commitments, including the elimination and repayment of our seasonal borrowing facility (FILO Facility) of $40.0 million, has had a significant impact on our liquidity during Fiscal 2023 and Fiscal 2024, including our ability to make timely vendor payments and school commission payments.

Our recurring losses and projected cash needs, combined with our current liquidity levels and the maturity of our Credit Facility and Term Loan, which were originally scheduled to become due on December 28, 2024 and April 7, 2025, respectively, raised substantial doubt about our ability to continue as a going concern beyond twelve months from the issuance of our third quarter financial statements as of March 12, 2024 as disclosed in our previously filed Quarterly Report on Form 10-Q.

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 7.

Debt and Note 17.

Subsequent Events.

As a result of the equity rights offering, private equity investment, Term Loan debt conversion, and Credit Facility refinancing, all executed on June 10, 2024, Management concluded that substantial doubt about the Company's ability to continue as a going concern no longer exists.

As of May 3, 2025, we had $9.1 million of cash on hand and $19.7 million of restricted cash including $17.3 million related to segregated funds for commission due to Lids for logo merchandise sales as per the F/L Relationship-related agreements.

These transactions also raised additional capital for repayment of indebtedness and provide additional flexibility for future working capital needs.

For additional information, see Financing Arrangements .

Additionally, on September 19, 2024 and December 20, 2024, respectively, we entered into an at-the market ("ATM") sales agreement with BTIG, LLC ("BTIG") under which we sold our Common Stock from time to time through BTIG as the sales agent ( See Note 6.

Equity and Earnings (Loss) Per Share ).

We believe that our future cash from operations, access to borrowings under the credit facility, and short-term vendor financing will provide adequate resources to fund our operating and financing needs for the next twelve months and beyond.

To the extent that available funds are insufficient to fund our future activities, we may need to raise additional funds through public or private financing of debt or equity.

Our access to, and the availability of, financing in the future will be impacted by many factors, including the liquidity of the overall capital markets and the current state of the economy.

There can be no assurances that we will have access to capital markets on acceptable terms.

Sources and Uses of Cash Flow - Continuing Operations

Dollars in thousands Fiscal 2024 Fiscal 2023

Net cash flows (used in) provided by operating activities from continuing operations

53 weeks ended 52 weeks ended

Dollars in thousands May 3, 2025 April 27, 2024

Net cash flows used in operating activities from continuing operations

$ (85,413) $ (1,545)

Net cash flows used in investing activities from continuing operations (12,101) (13,992)

Net cash flows (used in) financing activities from continuing operations

Net cash flows provided by (used in) financing activities from continuing operations

97,667 (5,699)

Net change in cash, cash equivalents, and restricted cash from continuing operations $ 153 $ (21,236)

As of April 27, 2024 and April 29, 2023, we had cash of $10.5 million and $14.2 million, respectively.

As of April 27, 2024 and April 29, 2023, we had restricted cash of $18.1 million and $16.7 million, respectively, comprised of $17.1 million and $15.8 million, respectively, in prepaid and other current assets in the consolidated balance sheet primarily related to segregated funds for commission due to Lids for logo merchandise sales as per the Lids service provider merchandising agreement and $1.0 million and $0.9 million, respectively, in other noncurrent assets in the consolidated balance sheets related to amounts held in trust for future distributions related to employee benefit plans.

As of May 3, 2025, and April 27, 2024, we had cash of $9.1 million and $10.5 million, respectively.

As of May 3, 2025 and April 27, 2024, we had restricted cash of $19.7 million and $18.1 million, respectively, comprised of $17.3 million and $17.1 million, respectively, in prepaid and other current assets in the Consolidated Balance Sheets primarily related to segregated funds for commission due to Lids for logo merchandise sales as per the Lids service provider merchandising

Index to Form 10-K Index to FS

agreement and $2.3 million and $1.0 million, respectively, in other noncurrent assets in the Consolidated Balance Sheets related to amounts held in trust for future distributions related to employee benefit plans.

Cash Flow from Operating Activities from Continuing Operations

Our business is highly seasonal.

For our retail operations, cash flows from operating activities are typically a source of cash in the second and third fiscal quarters, when students generally purchase and rent textbooks and other course materials for the upcoming semesters based on the typical academic semester.

Cash flows from operating activities are typically a source of cash in the second and third fiscal quarters, when students generally purchase and rent textbooks and other course materials for the upcoming semesters based on the typical academic semester.

Given the growth of our BNC First Day ® programs, the timing of cash collection from our school partners may shift to periods subsequent to when the revenue is recognized.

For our wholesale operations, cash flows from operating activities are typically a source of cash in the second and third fiscal quarters, as payments are received from the summer and winter selling season when our wholesale business sell textbooks and other course materials for retail distribution.

For both retail and wholesale, cash flows from operating activities are typically a use of cash in the fourth fiscal quarter, when sales volumes are materially lower than the other quarters.

Our quarterly cash flows also may fluctuate depending on the timing of the start of the various schools' semesters, as well as shifts in our fiscal calendar dates.

These shifts in timing may affect the comparability of our results across periods.

Cash flows used in operating activities from continuing operations during Fiscal 2024 were $(1.5) million compared to cash flows provided by operating activities from continuing operations of $90.5 million during Fiscal 2023.

The increase in

Index to Form 10-K Index to FS

cash flows used in operating activities from continuing operations of $92.1 million was primarily due to the timing of payables ($63.1 million) to vendors for inventory purchases and expenses, all of which were delayed resulting from lower borrowing base availability under our credit facility, lower accounts receivables collections ($55.1 million) compared to the prior year, and higher payments for interest expense ($5.9 million), offset by higher earnings ($27.7 million).

Cash flows used in operating activities from continuing operations during the 53 weeks ended May 3, 2025, were $85.4 million compared to cash flows used in operating activities from continuing operations of $1.5 million during the 52 weeks ended April 27, 2024.

The increase in cash flows used in operating activities from continuing operations of $83.9 million was primarily due to the timing of payables $(206.6) million to vendors for inventory purchases and expenses, lower accounts receivables collections $7.1 million compared to the prior year, and reduction of inventory balances of $44.5 million, offset by lower payments for interest expense $(7.0) million and higher earnings $9.9 million.

Cash Flow from Investing Activities from Continuing Operations

Cash flows used in investing activities from continuing operations during Fiscal 2024 were $(14.0) million compared to $(24.5) million during Fiscal 2023.

The decrease in cash used in investing activities is primarily due to lower capital expenditures and contractual capital investments, enhancements to internal systems and websites, and new store construction.

Capital expenditures totaled $(14.1) million and $(25.1) million during Fiscal 2024 and Fiscal 2023, respectively.

Cash flows used in investing activities from continuing operations during the 53 weeks ended May 3, 2025, were $12.1 million compared to $14.0 million during the 52 weeks ended April 27, 2024.

The decrease in cash used in investing activities is primarily due to lower capital expenditures and contractual capital investments, less enhancements to internal systems and websites, and new store construction.

Capital expenditures totaled $12.9 million and $14.1 million during the 53 weeks ended May 3, 2025, and the 52 weeks ended April 27, 2024, respectively.

Cash Flow from Financing Activities from Continuing Operations

Cash flows used in financing activities from continuing operations during Fiscal 2024 were $(5.7) million compared to $(49.7) million during Fiscal 2023.

Our cash flow used in financing from continuing operations decreased due to a decrease in net borrowings during the year, offset by an increase in deferred financing costs paid.

Cash flows provided by (used in) financing activities from continuing operations during the 53 weeks ended May 3, 2025, were $97.7 million compared to $(5.7) million used in during the 52 weeks ended April 27, 2024.

The net change of $103.4 million is primarily due the gross proceeds of $95.0 million of new equity capital through a $50.0 million new equity investment led by Immersion Corporation, and a $45.0 million fully backstopped Rights Offering, and proceeds of $78.5 million from the sale of Common Stock, offset by payments for equity issuance costs of $9.9 million and lower net borrowings of $72.7 million.

Financing Arrangements

Dollars in thousands As of

Maturity Date (a)

April 27, 2024 April 29, 2023

Credit Facility December 28, 2024 $ 164,947 $ 154,154

May 3, 2025 April 27, 2024

Credit Facility June 9, 2028 $ 103,100 $ 164,947

Term Loan April 7, 2025 — 32,653

sub-total 197,600 184,154

Deferred financing costs, Term Loan (b)

103,100 197,600

Deferred financing costs, Term Loan (b)

Total debt $ 103,100 $ 196,337

1 unchanged sentence

Long-term borrowings $ 103,100 $ 196,337

(a) On June 10, 2024, subsequent to the end of Fiscal 2024, we completed various transactions, including amending and extending the maturity date of the Credit Facility to June 9, 2028 and converting all outstanding principal and interest amounts owed under our Term Loan Credit Agreement into shares of our Common Stock.

For additional information, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 17.

Subsequent Events.

(a) On June 10, 2024, we completed the Transactions, including amending and extending the maturity date of the Credit Facility to June 9, 2028 and converting all outstanding principal and interest amounts owed under our Term Loan Credit Agreement into shares of our Common Stock.

For additional information, see Note 9.

(b) For additional information on deferred financing costs, see Deferred Financing Costs below.

Index to Form 10-K Index to FS

June 2024 Equity and Debt Transactions

For additional information, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 17.

Subsequent Events.

Financial Statements and Supplementary Data.

Credit Facility

As of April 27, 2024, we are party to a credit agreement (the “Credit Agreement”), which was amended from time to time including on April 16, 2024, March 12, 2024, December 12, 2023, October 10, 2023, July 28, 2023, May 24, 2023, March 8, 2023, March 31, 2021, and March 1, 2019, under which the lenders originally committed to provide us with a 5 year asset-backed revolving credit facility in an aggregate committed principal amount of $400.0 million (the “Credit Facility”) effective from the March 1, 2019 amendment.

The agreement included an incremental first in, last out seasonal loan facility (the “FILO Facility”) for a $100.0 million maintaining the maximum availability under the Credit Agreement at $500.0 million.

As of July 31, 2022, the FILO Facility was repaid and eliminated according to its terms and future commitments under the FILO Facility were reduced to $0.

Proceeds from the Credit Facility are used for general corporate purposes, including seasonal working capital needs.

The Credit Facility is secured by substantially all of the inventory, accounts receivable and related assets of the borrowers under the Credit Facility.

This is considered an all asset lien (inclusive of proceeds from tax refunds payable to the Company and a pledge of equity from subsidiaries, exclusive of real estate).

We are a party to that certain Credit Agreement, dated as of August 3, 2015, by and among the Company, as borrower, the lenders party thereto, Bank of America, N.A., as administrative agent, and the other agents party thereto (the “Original Credit Agreement”), which was amended from time to time (as amended, the “Credit Agreement”).

On June 10, 2024 (the “Closing Date”), we amended and restated the Credit Agreement, and through such amendment and restatement, further extended the maturity of our asset-based credit facility under the Credit Agreement (such amended and restated Credit Agreement, the “A&R Credit Agreement”).

Pursuant to the A&R Credit Agreement, the lenders thereunder have committed to provide a four-year asset-backed revolving credit facility (the "Credit Facility") in an aggregate committed principal amount of up to $325.0 million and extended the maturity date of the Credit Facility to June 9, 2028.

During the 53 weeks ended May 3, 2025, we incurred debt issuance costs totaling $3.7 million related to the A&R Credit Agreement amendment.

For information regarding the Credit Agreement amendments, deferred financing costs and terms, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 9.

Index to Form 10-K Index to FS

As of April 27, 2024, and through the date of this filing, we were in compliance with all debt covenants under the Credit Agreement.

During the 52 weeks ended April 27, 2024, we borrowed $563.0 million and repaid $552.2 million under the Credit Agreement, with $164.9 million of outstanding borrowings as of April 27, 2024 under the Credit Facility.

During the 52 weeks ended April 29, 2023, we borrowed $590.3 million and repaid $631.8 million under the Credit Agreement, with $154.2 million of outstanding borrowings as of April 29, 2023, comprised entirely of borrowings under the Credit Facility and $0 under the FILO Facility, which was repaid on August 1, 2022.

As of both April 27, 2024 and April 29, 2023, we have issued $3.6 million and $2.1 million, respectively, in letters of credit under the Credit Facility.

As of April 27, 2024, we are party to a Term Loan Credit Agreement (the “Term Loan Credit Agreement”) with TopLids LendCo, LLC and Vital Fundco, LLC to incur the Term Loan Facility, which was amended on March 8, 2023 and July 28, 2023.

The Term Loan Credit Agreement matures on April 7, 2025.

The proceeds of the Term Loans were used to finance working capital, and to pay fees and expenses related to the Term Loan Facility.

For information regarding the Term Loan Credit Agreement amendments, deferred financing costs and terms, see Part II - Item 8.

As of May 3, 2025, we were in compliance with all debt covenants under the A&R Credit Agreement.

We have been working with our lenders to allow sufficient time for us to complete our internal investigation and the Restatement, and to prepare our quarterly report for the first quarter of fiscal 2026;

and as a result, we received an extension of the deadline to deliver our financial statements to our lenders.

As of the issuance date of this Annual Report on Form 10-K, and for all periods presented in these financial statements reported on this Form 10-K, we were in compliance with all debt covenants under the A&R Credit Agreement.

During the 53 weeks ended May 3, 2025, we borrowed $887.1 million and repaid $948.9 million under the Credit Facility, with $164.9 million of outstanding borrowings as of April 27, 2024, under the Credit Facility.

As of both May 3, 2025, and April 27, 2024, we have issued $0.6 million and $3.6 million, respectively, in letters of credit under the Credit Facility.

On June 10, 2024, pursuant to the Term Loan Credit Agreement by and among the Company, TopLids LendCo, LLC and Vital Fundco, LLC dated June 7, 2022 (the "Term Loan"), lenders converted approximately $34.0 million of outstanding principal and accrued and unpaid interest into our Common Stock, resulting in financing noncash flow activity totaling $86.8 million.

We recognized a loss on extinguishment of debt of $55.2 million in the Consolidated Statement of Operations in connection with the Term Loan Debt Conversion which represents the difference between the Common Stock fair value issued upon conversion and the net carrying value of the Term Loan, plus unamortized deferred financing costs related to the Term Loan.

As a result of the Term Loan Debt Conversion, the Term Loan and its related agreements were terminated.

For information regarding the Term Loan amendments, deferred financing costs and terms, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 9.

During the 52 weeks ended April 27, 2024, we incurred $2.7 million for interest in kind on the Term Loan Credit Agreement and repaid $0 under the Term Loan Credit Agreement, with $32.7 million of outstanding borrowings as of April 27, 2024.

During the 52 weeks ended April 29, 2023, we borrowed $30.0 million and repaid $0 under the Term Loan Credit Agreement, with $30.0 million of outstanding borrowings as of April 29, 2023.

During the 53 weeks ended May 3, 2025, we incurred $0.0 million for interest in kind and repaid $0 under the Term Loan, with $0.0 million of outstanding borrowings as of May 3, 2025.

During the 52 weeks ended April 27, 2024, we incurred $2.7 million for interest in kind and repaid $0 under the Term Loan, with $32.7 million of outstanding borrowings as of April 27, 2024.

Deferred Financing Costs

The debt issuance costs have been deferred and are presented as noted below in the Consolidated Balance Sheets and are subsequently amortized ratably over the term of respective debt.

Index to Form 10-K Index to FS

Dollars in thousands As of

2 unchanged sentences

Amortization Term (a)

April 27, 2024 April 29, 2023

May 3, 2025 April 27, 2024

Credit Facility - Prepaid and Other Current Assets

December 28, 2024 $ — $ 3,776

June 9, 2028 $ — $ —

Credit Facility - Other noncurrent assets

11,597 12,897

Credit Facility - sub-total

11,597 12,897

Term Loan - Contra Debt

April 7, 2025 1,263 2,003

Total deferred financing costs

$ 11,597 $ 14,160

(a) On June 10, 2024, we completed the Transactions, including amending and extending the maturity date of the Credit Facility, and converting all outstanding principal and interest amounts owed under our Term Loan into shares of our Common Stock.

For additional information, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 17.

Subsequent Events.

Index to Form 10-K Index to FS

Interest Expense

The following table presents interest expense on the consolidated statement of operations and cash interest paid:

52 weeks ended

April 27, 2024 April 29, 2023

Financial Statements and Supplementary Data.

The following table presents interest expense on the Consolidated Statements of Operations and cash interest paid:

53 weeks ended 52 weeks ended

May 3, 2025 April 27, 2024

Interest Incurred

11 unchanged sentences

Income Tax Implications on Liquidity

As of April 27, 2024, we recognized a current income tax receivable for net operating loss carrybacks in prepaid and other current assets on the consolidated balance sheet.

We received refunds of $15.8 million refund in Fiscal 2023, an $8.5 million refund (including $0.9 million in interest) in Fiscal 2024 and we expect to receive additional refunds of approximately $2.4 million in Fiscal 2025.

The Company recognizes current income tax receivable for net operating loss carrybacks in prepaid and other current assets on the Consolidated Balance Sheet.

On August 24, 2024, a final refund of $2.7 million, including $0.3 million of interest, was received, and all refunds related to these carrybacks have been fully collected.

Refunds of $8.5 million and $15.8 million were received in Fiscal 2024 and Fiscal 2023, respectively.

Share Repurchases

4 unchanged sentences

During Fiscal 2025 and Fiscal 2024, we did not purchase shares under the stock repurchase program.

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

During Fiscal 2024 and Fiscal 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.

As of May 3, 2025, approximately $26.7 million remains available under the stock repurchase program.

During Fiscal 2025 and Fiscal 2024, we purchased 429 shares and 1,482 shares, respectively, outside of the stock repurchase program in connection with employee tax withholding obligations for vested stock awards.

Index to Form 10-K Index to FS

Contractual Obligations

The following table sets forth our contractual obligations as of June 21, 2024 (in millions):

The following table sets forth our contractual obligations as of May 3, 2025 (in millions):

Payments Due by Period

7 unchanged sentences

16.3 10.0 4.2 2.1 —

Other long-term liabilities reflected on the balance sheet under GAAP (d)

Total $ 320.3 $ 81.9 $ 69.1 $ 150.8 $ 18.5

(a) 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.

(a) On June 10, 2024, we completed the Transactions, including the Rights Offering, the Private Investment, the Term Loan Debt Conversion, and the Credit Facility Refinancing, to substantially deleverage our Consolidated Balance Sheet.

For additional information, see Part II - Item 8.

Financial Statements and Supplementary Data - Note 17.

Subsequent Events.

Index to Form 10-K Index to FS

(b) Our contracts for physical bookstores with colleges and universities are typically five years with renewal options, but can range from one to 15 years, and are typically cancelable by either party without penalty with 90 to 120 days' notice.

Financial Statements and Supplementary Data.

Annual projections are based on current minimum guarantee amounts.

In approximately 50% of our contracts with colleges and universities that include minimum guarantees, the minimum guaranteed amounts adjust annually to equal less than the prior year's commission earned.

In the less than approximately 40% of our contracts with colleges and universities that include minimum guarantees, the minimum guaranteed amounts typically adjust annually to equal less than the prior year's commission earned.

See Part II - Item 8.

1 unchanged sentence

(d) Other long-term liabilities excludes expected payments related to employee benefit plans.

Certain Relationships and Related Party Transactions

3 unchanged sentences

Critical Accounting Policies and Estimates

The accompanying consolidated financial statements are prepared in accordance with U.S.

GAAP applicable to a going concern.

In accordance with ASC 205-40, management’s analysis can only include the potential mitigating impact of management’s plans that have not been fully implemented as of the issuance date of these consolidated financial statements if (a) it is probable that management’s plans will be effectively implemented on a timely basis, and (b) it is probable that the plans, when implemented, will alleviate the relevant conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern.

In preparing our consolidated financial statements in accordance with GAAP, we are required to use judgment in making estimates and assumptions that affect the amounts reported in our consolidated financial statements and related notes.

11 unchanged sentences

Additional revenue is recognized for shipping charges billed to customers and shipping costs are accounted for as fulfillment costs within cost of goods sold.

Revenue from the sale of digital textbooks, which contains a single performance obligation, is recognized upon the delivery of the digital content as product revenue in our consolidated financial statements.

A software feature is embedded within the content of our digital textbooks, such that upon expiration of the term the customer is no longer able to access the content.

2 unchanged sentences

Rental periods are typically for a single semester and are always less than one year in duration.

We offer a buyout option to allow the purchase of a rented physical textbook at the end of the rental period if the customer desires to do so.

We offer a buyout option to allow the purchase of a rented physical textbook at the end of the rental period if the

customer desires to do so.

We record the buyout purchase when the customer exercises and pays the buyout option price which is determined at the time of the buyout.

In these instances, we accelerate any remaining deferred rental revenue at the point of sale.

Index to Form 10-K Index to FS

Revenue recognized for our BNC First Day ® offerings is consistent with our policies outlined above for product, digital and rental sales, net of an anticipated opt-out or return provision.

Given the growth of BNC First Day programs, the timing of cash collection from our school partners may shift to periods subsequent to when the revenue is recognized.

We estimate returns based on an analysis of historical experience.

4 unchanged sentences

For those transactions where we are the principal, we record revenue on a gross basis, and for those transactions where we are an agent to a third-party, we record revenue on a net basis.

Effective in April 2021, as contemplated by the F/L Relationship related merchandising agreement and e-commerce agreement, we began to transition the fulfillment of our logo general merchandise sales to Lids and Fanatics.

As the logo general merchandise sales are fulfilled by Lids and Fanatics, we recognize commission revenue earned for these sales on a net basis in our consolidated financial statements, as compared to the recognition of logo general merchandise sales on a gross basis in the periods prior to the transition.

The Company recognizes revenue commissions from logo general merchandise sales, which are fulfilled by Lids and Fanatics, on a net basis in our consolidated financial statements.

We do not have gift card or customer loyalty programs.

7 unchanged sentences

Market value of our inventory, which is all purchased finished goods, is determined based on its estimated net realizable value, which is generally the selling price less normally predictable costs of disposal and transportation.

Cost is determined primarily by the retail inventory method for our Retail Segment.

Our textbook and trade book inventories, for Retail and Wholesale Segments, are valued using the LIFO method and the related reserve was not material to the recorded amount of our inventories.

There were no LIFO adjustments in Fiscal 2024 and Fiscal 2023.

Reserves for non-returnable inventory are based on our history of liquidating non-returnable inventory.

Reserve calculations are sensitive to certain significant assumptions, including markdowns, sales below cost, inventory aging and expected demand.

Cost is determined primarily by the retail inventory method for our retail business.

Our textbook and trade book inventories, for our retail and wholesale businesses, are valued using the LIFO method.

In Fiscal 2025 we recorded a LIFO adjustment in the amount of $6.4 million.

In Fiscal 2024, the LIFO reserve was not material to the recorded amount of our inventories and no such adjustment was made.

Reserves for non-returnable inventory represent write-downs that reduce the cost basis of the asset.

These write-downs are based on our history of liquidating non-returnable inventory.

Reserve calculations are sensitive to certain assumptions, including markdowns and inventory aging.

We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions used to calculate the non-returnable inventory reserve.

5 unchanged sentences

However, if our estimates regarding shortage rates are incorrect, we may be exposed to losses or gains that could be material.

A 10 basis point change in actual shortage rates would have affected pre-tax earnings by approximately $1.0 million in Fiscal 2024.

Textbook Rental Inventories

Physical textbooks out on rent are categorized as textbook rental inventories.

At the time a rental transaction is consummated, the book is removed from merchandise inventories and moved to textbook rental inventories at cost.

The cost of the book is amortized down to its estimated residual value over the rental period.

The related amortization expense is included in cost of goods sold.

At the end of the rental period, upon return, the book is removed from textbook rental inventories and recorded in merchandise inventories at its amortized cost.

We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions used to calculate rental cost of goods sold.

However, if our estimates

Index to Form 10-K Index to FS

regarding residual value are incorrect, we may be exposed to losses or gains that could be material.

A 10% change in rental cost of goods sold would have affected pre-tax earnings by approximately $3.7 million in Fiscal 2024.

A change of 10 basis points of actual shortage rates would not have a material impact on pre-tax earnings in Fiscal 2025.

Evaluation of Other Long-Lived Assets Impairment

As of April 27, 2024, our other long-lived assets include property and equipment, operating lease right-of-use assets, amortizable intangibles, and other noncurrent assets of $52.9 million, $202.5 million, $94.2 million, and $24.7 million, respectively, on our consolidated balance sheet.

We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and consider market participants in accordance with Accounting Standards Codification (“ASC”) 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets .

As of May 3, 2025, our other long-lived assets include property and equipment, operating lease right-of-use assets, and amortizable intangibles of $40.2 million, $183.7 million, and $78.2 million, respectively, on our Consolidated Balance Sheet.

We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying

amount of an asset may not be recoverable and consider market participants in accordance with Accounting Standards Codification (“ASC”) 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets .

We evaluate the long-lived assets of the reporting units for impairment at the lowest asset group level for which individual cash flows can be identified.

When evaluating long-lived assets for potential impairment, we first compared the carrying amount of the asset group to the estimated future undiscounted cash flows.

When evaluating long-lived assets for potential impairment, we first compare the carrying amount of the asset group to the estimated future undiscounted cash flows.

The impairment loss calculation compares the carrying amount of the assets to the fair value based on estimated discounted future cash flows.

If required, an impairment loss is recorded for that portion of the asset’s carrying value in excess of fair value.

Our business has been significantly negatively impacted by the COVID-19 pandemic, as many schools adjusted their learning models and on-campus activities.

Although most academic institutions have since reopened, some are providing alternatives to traditional in-person instruction, including online and hybrid learning options and significantly reduced classroom sizes.

Enrollment trends have been negatively impacted overall by COVID-19 concerns at physical campuses.

While many athletic conferences resumed their sport activities, other events, such as parent and alumni weekends and prospective student campus tour activities, some may still be curtailed or offer a virtual option.

These combined events continue to impact the Company’s course materials and general merchandise business.

During Fiscal 2024, we evaluated certain of our store-level long-lived assets in the Retail segment for impairment.

During Fiscal 2025, we evaluated certain of our store-level long-lived assets for impairment.

During Fiscal 2023, we evaluated certain of our store-level long-lived assets in the Retail segment for impairment.

During Fiscal 2024, we evaluated certain of our store-level long-lived assets for impairment.

The fair value of the impaired long-lived assets were determined using an income approach (Level 3 input), using the Company’s best estimates of the amount and timing of future discounted cash flows, based on historical experience, market conditions, current trends and performance expectations.

The fair value of the impaired long-lived assets was determined using an income approach (Level 3 input), using the Company’s best estimates of the amount and timing of future discounted cash flows, based on historical experience, market conditions, current trends and performance expectations.

For additional information, see Part II - Item 8.

4 unchanged sentences

Significant assumptions used to determine the fair values of certain operating right-of-use assets included the current market rent and discount rate.

These assumptions are subjective in nature and are affected by expectations about future market or economic conditions (including the effects of the global pandemic).

These assumptions are subjective in nature and are affected by expectations about future market or economic conditions.

We do not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions used to calculate long-lived asset impairment losses.

2 unchanged sentences

Deferred income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax basis and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered.

FASB guidance on accounting for income taxes requires that deferred tax assets be evaluated for future realization and reduced by a valuation allowance to the extent we believe a portion will not be realized.

We consider many factors when assessing the likelihood of future realization of our deferred tax assets, including our recent earnings experience and expectations of future taxable income by taxing jurisdiction, the carryforward periods available to us for tax reporting purposes

Index to Form 10-K Index to FS

and other relevant factors.

Financial Accounting Standards Board (FASB) guidance on accounting for income taxes requires that deferred tax assets be evaluated for future realization and reduced by a valuation allowance to the extent we believe a portion will not be realized.

The actual realization of deferred tax assets may differ significantly from the amounts we have recorded.

During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain.

Accounting for income taxes requires a two-step approach to recognizing and measuring uncertain tax positions.

The first step is to evaluate the tax position for recognition by determining if available evidence indicates it is more likely than not that the tax position will be fully sustained upon review by taxing authorities, including resolution of related appeals or litigation processes, if any.

The second step is to measure the tax benefit as the largest amount with a greater than 50 percent likelihood of being realized upon ultimate settlement.

For tax positions that are 50 percent or less likely of being sustained upon audit, we do not recognize any portion of that benefit in the financial statements.

We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes.

Our actual results could differ materially from our current estimates.

Recent Accounting Pronouncements

2 unchanged sentences

Summary of Significant Accounting Policies - Recent Accounting Pronouncements for information related to new accounting pronouncements.

Restatement of Quarterly (Unaudited) and Annual Financial Information

As explained further in the Explanatory Note at the beginning of this Form 10-K, the Company has restated its previously issued unaudited interim financial statements for the 13 weeks ended July 29, 2023, October 28, 2023, January 27, 2024, July 27, 2024, October 26, 2024 and January 25, 2025 and the audited annual financial statements for the year ended April 27, 2024.

Detailed restatements of the Company's consolidated quarterly financial statements are provided in Note 3.

Restatement of Previously Issued Audited Consolidated Financial Statements and Note 21.

Restatement of Quarterly Financial Information (Unaudited) in the accompanying notes to the consolidated financial statements.

The following unaudited quarterly and annual statements of operations data for the fiscal year ended April 27, 2024 have been prepared on a basis consistent with our audited annual financial statements included in this Form 10-K and include, in our opinion, all normal recurring adjustments necessary for the fair presentation of the financial information contained in those

Our historical results are not necessarily indicative of the results that may be expected in the future.

The following should be read in conjunction with our audited financial statements and the related notes included in this Form 10-K.

13 weeks ended

July 29, 2023 October 28, 2023 January 27, 2024 April 27, 2024

Product sales and other $ 252,650 $ 569,698 $ 415,375 $ 192,733

Rental income 11,511 $ 40,681 $ 41,298 43,189

Total sales 264,161 610,379 456,673 235,922

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

Product and other cost of sales 209,280 $ 448,073 $ 332,113 155,507

Rental cost of sales 6,676 $ 21,609 $ 23,959 25,005

Total cost of sales 215,956 469,682 356,072 180,512

48,205 140,697 100,601 55,410

Selling and administrative expenses 77,476 $ 85,961 $ 79,756 68,381

Depreciation and amortization expense 10,253 $ 10,175 $ 10,148 9,984

Impairment loss

— $ — $ 5,798 1,368

Other (income) expense

4,633 $ 4,274 $ 3,413 7,089

Operating (loss) income

$ (44,157) $ 40,287 $ 1,486 $ (31,412)

Interest expense, net 8,254 10,664 10,620 10,827

Loss from continuing operations before income taxes $ (52,411) $ 29,623 $ (9,134) $ (42,239)

Income tax expense (benefit)

89 532 487 (250)

Loss from continuing operations $ (52,500) $ 29,091 $ (9,621) $ (41,989)

Loss from discontinued operations

(417) (674) 289 72

Net (loss) income

$ (52,917) $ 28,417 $ (9,332) $ (41,917)

52 Weeks Ended April 27 2024

Product sales and other $ 1,430,456

Rental income 136,679

Total sales 1,567,135

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

Product and other cost of sales 1,144,973

Rental cost of sales 77,249

Total cost of sales 1,222,222

Selling and administrative expenses 311,574

Depreciation and amortization expense 40,560

Impairment loss

Other expense

Operating loss

Interest expense, net 40,365

Loss from continuing operations before income taxes (74,161)

Income tax expense 858

Loss from continuing operations, net of tax (75,019)

Loss from discontinued operations

Net loss $ (75,749)

Loss per share of Common Share

Basic and Diluted

Continuing operations $ (28.18)

Discontinued operations $ (0.28)

Total Basic and Diluted Net Loss per share $ (28.46)

Weighted average shares of common stock outstanding - Basic and Diluted 2,662,296

13 weeks ended

July 27, 2024 October 26, 2024 January 25, 2025

Product sales and other $ 250,926 $ 559,674 $ 419,663

Rental income 12,505 42,448 43,162

Total sales 263,431 602,122 462,825

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

Product and other cost of sales 211,385 451,026 343,559

Rental cost of sales 7,050 22,619 25,516

Total cost of sales 218,435 473,645 369,075

44,996 128,477 93,750

Selling and administrative expenses 67,023 72,940 71,561

Depreciation and amortization expense 13,071 8,542 7,827

Impairment loss

Other expense (income)

3,618 (150) (6,268)

Operating (loss) income

(38,716) 47,145 18,917

Loss on extinguishment of debt 55,233 — —

Interest expense, net 7,618 5,463 5,083

(Loss) income from continuing operations before income taxes

(101,567) 41,682 13,834

Income tax expense (benefit) 2,358 (1,480) (4,108)

Net (loss) income

$ (103,925) $ 43,162 $ 17,942

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

2 unchanged sentences

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 7. Management’s Discussion and Analysis