|
x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
46-0599018
|
(State or Other Jurisdiction of Incorporation or Organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
120 Mountain View Blvd., Basking Ridge, NJ
|
|
07920
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
Title of Class
|
Trading Symbol
|
Name of Exchange on which registered
|
Common Stock, $0.01 par value per share
|
BNED
|
New York Stock Exchange
|
Large accelerated filer
|
|
¨
|
Accelerated filer
|
|
x
|
|
|
|
|
|
|
Non-accelerated filer
|
|
¨
|
Smaller reporting company
|
|
¨
|
|
|
|
|
|
|
|
|
|
Emerging Growth Company
|
|
¨
|
|
INDEX TO FORM 10-K
|
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|
|
Page No.
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
•
|
risks associated with COVID-19 and the governmental responses to it, including its impacts across our businesses on demand and operations, as well as on the operations of our suppliers and other business partners, and the effectiveness of our actions taken in response to these risks;
|
•
|
general competitive conditions, including actions our competitors and content providers may take to grow their businesses;
|
•
|
a decline in college enrollment or decreased funding available for students;
|
•
|
decisions by colleges and universities to outsource their physical and/or online bookstore operations or change the operation of their bookstores;
|
•
|
implementation of our digital strategy may not result in the expected growth in our digital sales and/or profitability;
|
•
|
risk that digital sales growth does not exceed the rate of investment spend;
|
•
|
the performance of our online, digital and other initiatives, integration of and deployment of, additional products and services including new digital channels, and enhancements to higher education digital products, and the inability to achieve the expected cost savings;
|
•
|
the risk of price reduction or change in format of course materials by publishers, which could negatively impact revenues and margin;
|
•
|
the general economic environment and consumer spending patterns;
|
•
|
decreased consumer demand for our products, low growth or declining sales;
|
•
|
the strategic objectives, successful integration, anticipated synergies, and/or other expected potential benefits of various acquisitions, may not be fully realized or may take longer than expected;
|
•
|
the integration of the operations of various acquisitions into our own may also increase the risk of our internal controls being found ineffective;
|
•
|
changes to purchase or rental terms, payment terms, return policies, the discount or margin on products or other terms with our suppliers;
|
•
|
our ability to successfully implement our strategic initiatives including our ability to identify, compete for and execute upon additional acquisitions and strategic investments;
|
•
|
risks associated with operation or performance of MBS Textbook Exchange, LLC’s point-of-sales systems that are sold to college bookstore customers;
|
•
|
technological changes;
|
•
|
risks associated with counterfeit and piracy of digital and print materials;
|
•
|
our international operations could result in additional risks;
|
•
|
our ability to attract and retain employees;
|
•
|
risks associated with data privacy, information security and intellectual property;
|
•
|
trends and challenges to our business and in the locations in which we have stores;
|
•
|
non-renewal of managed bookstore, physical and/or online store contracts and higher-than-anticipated store closings;
|
•
|
disruptions to our information technology systems, infrastructure and data due to computer malware, viruses, hacking and phishing attacks, resulting in harm to our business and results of operations;
|
•
|
disruption of or interference with third party web service providers and our own proprietary technology;
|
•
|
work stoppages or increases in labor costs;
|
•
|
possible increases in shipping rates or interruptions in shipping service;
|
•
|
product shortages, including decreases in the used textbook inventory supply associated with the implementation of publishers’ digital offerings and direct to student textbook consignment rental programs, as well as the risks associated with the impacts that public health crises may have on the ability of our suppliers to manufacture or source products, particularly from outside of the United States;
|
•
|
changes in domestic and international laws or regulations, including U.S. tax reform, changes in tax rates, laws and regulations, as well as related guidance;
|
•
|
enactment of laws or changes in enforcement practices which may restrict or prohibit our use of texts, emails, interest based online advertising, recurring billing or similar marketing and sales activities;
|
•
|
the amount of our indebtedness and ability to comply with covenants applicable to any future debt financing;
|
•
|
our ability to satisfy future capital and liquidity requirements;
|
•
|
our ability to access the credit and capital markets at the times and in the amounts needed and on acceptable terms;
|
•
|
adverse results from litigation, governmental investigations, tax-related proceedings, or audits;
|
•
|
changes in accounting standards; and
|
•
|
the other risks and uncertainties detailed in the section titled “Risk Factors” in Part I - Item 1A of this Form 10-K.
|
•
|
Course Material Sales and Rentals. Sales and rentals of course materials are a core revenue driver and our faculty and student platforms operate as a seamless extension of our partner schools’ registration, student information and learning management systems. Students can access affordable course materials, including new and used print, eTextbooks, and e-content, which are available for sale or rent. We work directly with faculty to ensure the course materials they have chosen for their courses are available in all required formats before the start of classes. Our wholesale distribution channel enables our Retail Segment to optimize textbook sourcing so they are able to more efficiently source and distribute a comprehensive inventory of affordable course materials to customers. In Fiscal 2020, we made significant progress in the ongoing rollout of BNC Adoption & Insights Portal (AIP), an innovative platform that provides enhanced support for faculty and academic leadership to research, submit and monitor course material selections, further driving affordability and student success.
|
•
|
Inclusive Access. We offer our BNC First Day™ inclusive access programs, consisting of First Day and First Day Complete in which course materials are offered at a reduced price through a course materials fee or included in tuition, and delivered to students on or before the first day of class. In 2019, we announced an agreement with VitalSource®, part of Ingram Content Group, to use their technology to power our First Day inclusive access platform, for digitally formatted courseware, allowing us to accelerate and optimize First Day implementations. We have entered into several agreements with major publishers, including Cengage Learning, McGraw-Hill Education and Pearson, to provide their e-content through First Day. The seamless delivery is made possible by our First Day technology and publishers' technology integrations with campus systems. These initiatives provide students, faculty and institutions greater access to more affordable course materials. First Day offers the inclusive access model on a class-by-class basis, as adopted by the individual instructors on a campus, as compared to our First Day Complete program, in which the entire school adopts the inclusive access model for essentially all of their courses. In Fiscal 2020, First Day programs' total sales increased by 90% from the prior year. First Day Complete offers the delivery of both digital and physical courseware priced at substantial discounts compared to traditional individual student sales offerings. Offering courseware sales through our inclusive access First Day and First Day Complete models is a key and increasingly important strategic initiative of ours to meet the market demands of substantially reduced pricing to students while, at the same time, increasing our market share, revenue and relative gross margins of courseware 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.
|
•
|
BNC OER+. BNC OER+, a turnkey solution for colleges and universities, offers advanced, affordable learning materials built on a high-quality foundation of OER and enhanced with digital content that includes videos, activities and auto-graded practice assessments that faculty can easily customize to align with class objectives. BNC OER+ significantly reduces course material costs for students and is easy for faculty to implement. BNC OER+ is delivered digitally and can be seamlessly integrated with an institution's campus LMS. Optional print companions of the etextbook are available to students. In Fiscal 2020, we expanded our available subject offerings to 64 courses, offering general education courses, including sociology, psychology, economics, business, early childhood and criminal justice. In Fiscal 2020, we had BNC OER+ sales to over 9,700 students at 125 unique colleges and universities, including technical colleges and online programs.
|
•
|
eTextbooks. We have partnered with VitalSource, a global leader in building, enhancing and delivering digital content, on our digital reading platform and digital content catalog.
|
•
|
General Merchandise. For our physical campus bookstores and custom store solutions, we drive high-margin general merchandise sales through both in-store and online channels and feature collegiate and athletic apparel, other custom-branded
|
•
|
Cafés and Convenience Stores. At our physical campus locations, we operate 86 customized cafés, featuring Starbucks Coffee®, as well as regional coffee roasters, and 13 stand-alone convenience stores. Our Café locations and convenience marketplaces offer diverse grab-and-go options including organic, vegan, gluten-free and regional fresh food products. These offerings increase traffic and time spent in our physical stores. As market needs change, we are adapting our model to include more grab-and-go pre-packed fresh food items, simplified menus to reduce food waste and new technology to reduce operating complexity and make the customer experience more efficient.
|
•
|
Brand Partnerships. Through our unique relationship with students, colleges and universities, and our premier position on campus, we operate as a media channel for brands looking to target the college demographic, and derive revenue from these marketing programs. We also focus on promoting lifestyle products to students and faculty by promoting various brands to connect on a much more personal level. We create strategic, integrated campaigns which include research, email, social media, display advertising, on-campus events, signage, and sampling. Our client list includes brands such as Chase, Target, Masterpass, GEICO, DirecTV, GrubHub, Shutterfly, The New York Times and Tom's of Maine. Revenue from these services have higher margin rates due to the relatively low incremental cost structure to provide these services.
|
•
|
Wholesale Textbook Distribution. Our large inventory of used textbooks consists of approximately 300,000 textbook titles in stock, and utilizes a highly automated distribution facility that processes approximately 11 million textbooks annually.
|
•
|
Wholesale Inventory Management, Hardware and POS Software. We sell hardware and a software suite of applications that provides inventory management and point-of-sale solutions to approximately 400 college bookstores. We provide on-site installation for point-of-sale terminals and servers, and offer technical assistance through user training and our support center facility. The cost savings and ease of deployment ensure clients get the most out of their management systems and create strong customer loyalty.
|
•
|
Overall Economic Environment, College Enrollment and Consumer Spending Patterns. Our business is affected by the overall economic environment, funding levels at colleges and universities, by changes in enrollments at colleges and universities, and spending on course materials and general merchandise.
|
•
|
Impact of COVID-19: The COVID-19 pandemic has materially and adversely impacted the U.S. economy and financial markets, with legislative and regulatory responses including unprecedented monetary and fiscal policy actions across all sectors, and there is significant uncertainty as to timing of stabilization and recovery. Many colleges and K-12 schools have been required to cease in-person classes in an attempt to limit the spread of the COVID-19 pandemic and ensure the safety of their students. Although many institutions plan to reopen, academic institutions are considering alternatives to traditional in-person instruction, including on-line learning and significantly reduced class room size.
|
•
|
Economic Environment: Retail general merchandise sales are subject to short-term fluctuations driven by the broader retail environment.
|
•
|
Enrollment Trends. The growth of our business depends on our ability to attract new customers and to increase the level of engagement by our current student customers. We continue to see downward enrollment trends and shrinking resources from state and federal government for colleges and universities. Enrollment trends, specifically at community colleges, generally correlate with changes in the economy and unemployment factors, e.g. low unemployment tends to lead to low enrollment and higher unemployment rates tend to lead to higher enrollment trends, as students generally enroll to obtain skills that are in demand in the workforce. Enrollment trends may be negatively impacted overall by COVID-19 concerns at physical campuses, although there is some preliminary evidence that community college systems that rely more on "commuter" rather than "residential" students may experience less of a negative impact, or some may even experience an increase, in enrollment due to projected high unemployment rates in the Fall of 2021. A significant reduction in U.S. economic activity and increased unemployment, which could lead to decreased enrollment and consumer spending. Additionally, enrollment trends are impacted by the dip in the United States birth rate resulting in fewer students at the traditional 18-24 year-old college age. Online degree program enrollments continue to grow, even in the face of declining overall higher education enrollment.
|
•
|
Increased Use of Online and Digital Platforms as Companions or Alternatives to Printed Course Materials. Students and faculty can now choose from a wider variety of educational content and tools than ever before, delivered across both print and digital platforms.
|
•
|
Distribution Network Evolving. The way course materials are distributed and consumed is changing significantly, a trend that is expected to continue. The market for course materials, including textbooks and supplemental materials, is intensely competitive and subject to rapid change.
|
•
|
Disintermediation. We are experiencing growing competition from alternative media and alternative sources of textbooks and other course materials. In addition to the official physical or virtual campus bookstore, course materials are also sold through off-campus bookstores, e-commerce outlets, digital platform companies, publishers, including Cengage, Pearson and McGraw Hill, bypassing the bookstore distribution channel by selling or renting directly to students and educational institutions, and student-to-student transactions over the Internet.
|
•
|
Supply Chain and Inventory. Since the demand for used textbooks has historically been greater than the available supply, our financial results are highly dependent upon Wholesale’s ability to build its textbook inventory from suppliers in advance of the selling season. Some textbook publishers have begun to supply textbooks pursuant to consignment or rental programs which could impact used textbook supplies in the future. Additionally, Wholesale is a national distributor for rental textbooks offered through McGraw-Hill Education's and Pearson Education’s consignment rental program, both of which are relatively nascent.
|
•
|
Price Competition. In addition to the competition in the services we provide to our customers, our textbook and other course materials business faces significant price competition. Students purchase textbooks and other course materials from multiple providers, are highly price sensitive, and can easily shift spending from one provider or format to another.
|
•
|
A Large Number of Traditional Campus Bookstores Have Yet to be Outsourced.
|
•
|
Outsourcing Trends. We continue to see the trend towards outsourcing in the campus bookstore market and also continue to see a variety of business models being pursued for the provision of course materials (such as inclusive access programs and publisher subscription models) and general merchandise.
|
•
|
New and Existing Bookstore Contracts. We expect awards of new accounts resulting in new physical and virtual store openings will continue to be an important driver of future growth in our business. We also expect that certain less profitable or essential bookstores we operate may close. Such stores could be included in contracts for stores we operate that may be deemed non-essential; and such stores could be operated by others or independently by schools. The scope of any such store closures remains uncertain at this time, although we are not aware, at this time, of any significant volume of stores which we operate that are likely to close or have informed us of upcoming closures.
|
Name
|
|
Age
|
|
Position
|
Michael P. Huseby
|
|
65
|
|
Chairman and Chief Executive Officer
|
Thomas D. Donohue
|
|
50
|
|
Executive Vice President, Chief Financial Officer
|
Kanuj Malhotra
|
|
53
|
|
Executive Vice President, Corporate Development; President, Digital Student Solutions
|
Michael C. Miller
|
|
48
|
|
Executive Vice President, Corporate Affairs, Chief Legal Officer, and Secretary
|
Stephen Culver
|
|
55
|
|
Senior Vice President, Chief Information Officer
|
JoAnn Magill
|
|
66
|
|
Senior Vice President, Human Resources
|
Seema C. Paul
|
|
56
|
|
Senior Vice President, Chief Accounting Officer
|
•
|
the closing or limited operations of our campus retail stores;
|
•
|
reductions in government funding of education could negatively impact the budgets of colleges and K-12 schools public colleges, which could impact the demand for our products and services;
|
•
|
our inability to realize our expected return on textbooks in our print textbook library as educators transition to online curriculums;
|
•
|
disruptions to the operations of our logistics and distribution partners, which could impact our ability to timely deliver our print textbooks to students;
|
•
|
our textbook partners’ inability to fill our textbook orders due to disruptions to their operations or overwhelming demand from their own customers; and
|
•
|
system interruptions that slow our website or make our website unavailable as our third-party software and service providers experience increased usage;
|
•
|
a significant reduction in U.S. economic activity and increased unemployment, which could lead to decreased enrollment and consumer spending;
|
•
|
the potential negative impact on the health of our employees, particularly if a significant number of them are impacted, could affect our ability to ensure business continuity during the period of disruption related to the pandemic;
|
•
|
governmental orders have forced many of our on-site and management office employees to work remotely, which may adversely impact our ability to effectively manage our business and maintain our financial reporting processes and related controls, as well as introduce operational risk, including an increased vulnerability to potential cyber security attacks; and
|
•
|
actions we have taken and may take in the future in response to the COVID-19 pandemic, including significantly reducing our non-essential capital expenditures, reducing our workforce, and other cost reduction efforts, may negatively impact our operations.
|
•
|
actual or anticipated fluctuations in our operating results due to factors related to our businesses;
|
•
|
success or failure of our business strategies, including our digital education initiative;
|
•
|
our quarterly or annual earnings or those of other companies in our industries;
|
•
|
our ability to obtain financing as needed;
|
•
|
announcements by us or our competitors of significant acquisitions or dispositions;
|
•
|
changes in accounting standards, policies, guidance, interpretations or principles;
|
•
|
the failure of securities analysts to cover our Common Stock;
|
•
|
changes in earnings estimates by securities analysts or our ability to meet those estimates;
|
•
|
the operating and stock price performance of other comparable companies;
|
•
|
investor perception of our Company and the higher education industry;
|
•
|
overall market fluctuations;
|
•
|
results from any material litigation or government investigation;
|
•
|
changes in laws and regulations (including tax laws and regulations) affecting our business;
|
•
|
changes in capital gains taxes and taxes on dividends affecting stockholders; and
|
•
|
general economic conditions and other external factors.
|
•
|
authorize the issuance of “blank check” preferred stock that could be issued by our Board of Directors to increase the number of outstanding shares of capital stock, making a takeover more difficult and expensive;
|
•
|
provide that special meetings of the stockholders may be called only by or at the direction of a majority of our Board or the chairman of our Board of Directors; and
|
•
|
require advance notice to be given by stockholders for any stockholder proposals or director nominations.
|
Contract Terms to Expire During
(12 months ending on or about April 30)
|
|
Number of Physical Campus Stores
|
2021
|
|
91
|
2022
|
|
52
|
2023
|
|
42
|
2024
|
|
35
|
2025
|
|
114
|
2026 and later
|
|
438
|
Item 5.
|
MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
|
Fiscal Year (a)
|
||||||||||||||||||
(In thousands of dollars,
except for share and per share amounts)
|
|
2020 (b)
|
|
2019 (c)
|
|
2018 (c)
|
|
2017 (c)
|
|
2016 (c)
|
||||||||||
STATEMENT OF OPERATIONS DATA:
|
|
|
|
|
|
|
||||||||||||||
Sales:
|
|
|
|
|
|
|
||||||||||||||
Product sales and other
|
|
$
|
1,671,200
|
|
|
$
|
1,838,760
|
|
|
$
|
1,984,472
|
|
|
$
|
1,641,881
|
|
|
$
|
1,581,104
|
|
Rental income
|
|
179,863
|
|
|
195,883
|
|
|
219,145
|
|
|
232,481
|
|
|
226,925
|
|
|||||
Total sales
|
|
1,851,063
|
|
|
2,034,643
|
|
|
2,203,617
|
|
|
1,874,362
|
|
|
1,808,029
|
|
|||||
Cost of sales:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Product and other cost of sales
|
|
1,303,702
|
|
|
1,395,339
|
|
|
1,522,687
|
|
|
1,281,043
|
|
|
1,224,927
|
|
|||||
Rental cost of sales
|
|
104,812
|
|
|
111,578
|
|
|
123,697
|
|
|
134,258
|
|
|
128,403
|
|
|||||
Total cost of sales
|
|
1,408,514
|
|
|
1,506,917
|
|
|
1,646,384
|
|
|
1,415,301
|
|
|
1,353,330
|
|
|||||
Gross profit
|
|
442,549
|
|
|
527,726
|
|
|
557,233
|
|
|
459,061
|
|
|
454,699
|
|
|||||
Selling and administrative expenses
|
|
404,472
|
|
|
423,880
|
|
|
433,746
|
|
|
380,793
|
|
|
374,171
|
|
|||||
Depreciation and amortization expense
|
|
61,860
|
|
|
65,865
|
|
|
65,586
|
|
|
53,318
|
|
|
52,690
|
|
|||||
Impairment loss (non-cash) (d)
|
|
433
|
|
|
57,748
|
|
|
313,130
|
|
|
—
|
|
|
11,987
|
|
|||||
Restructuring and other charges (d)
|
|
18,567
|
|
|
7,233
|
|
|
5,429
|
|
|
1,790
|
|
|
8,830
|
|
|||||
Transaction costs (e)
|
|
—
|
|
|
654
|
|
|
2,045
|
|
|
9,605
|
|
|
2,398
|
|
|||||
Operating (loss) income
|
|
(42,783
|
)
|
|
(27,654
|
)
|
|
(262,703
|
)
|
|
13,555
|
|
|
4,623
|
|
|||||
Interest expense, net
|
|
7,445
|
|
|
9,780
|
|
|
10,306
|
|
|
3,464
|
|
|
1,872
|
|
|||||
(Loss) earnings before taxes
|
|
(50,228
|
)
|
|
(37,434
|
)
|
|
(273,009
|
)
|
|
10,091
|
|
|
2,751
|
|
|||||
Income tax (benefit) expense
|
|
(11,978
|
)
|
|
(13,060
|
)
|
|
(20,443
|
)
|
|
4,730
|
|
|
2,667
|
|
|||||
Net (loss) income
|
|
$
|
(38,250
|
)
|
|
$
|
(24,374
|
)
|
|
$
|
(252,566
|
)
|
|
$
|
5,361
|
|
|
$
|
84
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(Loss) Earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
(0.80
|
)
|
|
$
|
(0.52
|
)
|
|
$
|
(5.40
|
)
|
|
$
|
0.12
|
|
|
$
|
—
|
|
Diluted
|
|
$
|
(0.80
|
)
|
|
$
|
(0.52
|
)
|
|
$
|
(5.40
|
)
|
|
$
|
0.11
|
|
|
$
|
—
|
|
Weighted average common shares (thousands):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
48,013
|
|
|
47,306
|
|
|
46,763
|
|
|
46,317
|
|
|
46,238
|
|
|||||
Diluted
|
|
48,013
|
|
|
47,306
|
|
|
46,763
|
|
|
46,763
|
|
|
46,479
|
|
|
|
Fiscal Year (a)
|
||||||||||||||||||
(In thousands of dollars,
except for share and per share amounts)
|
|
2020 (b)
|
|
2019 (c)
|
|
2018 (c)
|
|
2017 (c)
|
|
2016 (c)
|
||||||||||
BALANCE SHEET DATA
(at period end):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
|
$
|
1,156,432
|
|
|
$
|
946,180
|
|
|
$
|
1,039,211
|
|
|
$
|
1,299,832
|
|
|
$
|
1,071,683
|
|
Total liabilities
|
|
$
|
738,681
|
|
|
$
|
495,552
|
|
|
$
|
571,248
|
|
|
$
|
586,124
|
|
|
$
|
363,297
|
|
Short-term debt
|
|
$
|
75,000
|
|
|
$
|
100,000
|
|
|
$
|
100,000
|
|
|
$
|
100,000
|
|
|
$
|
—
|
|
Long-term debt
|
|
$
|
99,700
|
|
|
$
|
33,500
|
|
|
$
|
96,400
|
|
|
$
|
59,600
|
|
|
$
|
—
|
|
Total stockholders' equity
|
|
$
|
417,751
|
|
|
$
|
450,628
|
|
|
$
|
467,963
|
|
|
$
|
713,708
|
|
|
$
|
708,386
|
|
(a)
|
Our fiscal year is comprised of 52 or 53 weeks, ending on the Saturday closest to the last day of April. “Fiscal 2020” means the 53 weeks ended May 2, 2020, “Fiscal 2019” means the 52 weeks ended April 27, 2019, “Fiscal 2018” means the 52 weeks ended April 28, 2018, “Fiscal 2017” means the 52 weeks ended April 29, 2017, and “Fiscal 2016” means the 52 weeks ended April 30, 2016.
|
(b)
|
In Fiscal 2020, our business experienced an unprecedented and significant impact as a result of COVID-19 related campus store closures (the majority of which began in mid-March). The impact of the store closures affects the comparability of our results of operations and cash flows.
|
(c)
|
We acquired PaperRater on August 21, 2018. The consolidated financial statements for Fiscal 2019 include the financial results of PaperRater from the acquisition date, August 21, 2018, to April 27, 2019.
|
(d)
|
For additional information, see Item 8. Financial Statements and Supplementary Data - Note 2. Summary of Significant Accounting Policies and Note 11. Supplementary Information.
|
(e)
|
Transaction costs are costs incurred for business development and acquisitions.
|
(f)
|
To supplement our results prepared in accordance with GAAP, we use the measure of Adjusted EBITDA and Adjusted Earnings, which are non-GAAP financial measures as defined by the Securities and Exchange Commission (the “SEC”). See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Adjusted Earnings (non-GAAP) and - Adjusted EBITDA (non-GAAP).
|
Item 7.
|
MANAGMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
The consolidated financial statements for the 52 weeks ended April 27, 2019 include the financial results of PaperRater from the acquisition date, August 21, 2018, to April 27, 2019.
|
•
|
The consolidated financial statements for the 52 weeks ended April 28, 2018 include the financial results of Student Brands from the acquisition date, August 3, 2017, to April 28, 2018.
|
Dollars in thousands
|
|
53 weeks ended
May 2, 2020 (a) |
|
52 weeks ended
April 27, 2019 |
|
52 weeks ended
April 28, 2018 |
||||||
Sales:
|
|
|
|
|
|
|
||||||
Product sales and other
|
|
$
|
1,671,200
|
|
|
$
|
1,838,760
|
|
|
$
|
1,984,472
|
|
Rental income
|
|
179,863
|
|
|
195,883
|
|
|
219,145
|
|
|||
Total sales
|
|
$
|
1,851,063
|
|
|
$
|
2,034,643
|
|
|
$
|
2,203,617
|
|
|
|
|
|
|
|
|
||||||
Net loss
|
|
$
|
(38,250
|
)
|
|
$
|
(24,374
|
)
|
|
$
|
(252,566
|
)
|
|
|
|
|
|
|
|
||||||
Adjusted Earnings (non-GAAP) (b)
|
|
$
|
(21,126
|
)
|
|
$
|
25,412
|
|
|
$
|
56,949
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA (non-GAAP) (b)
|
|
|
|
|
|
|
||||||
Retail
|
|
$
|
36,227
|
|
|
$
|
89,094
|
|
|
$
|
101,242
|
|
Wholesale
|
|
21,567
|
|
|
35,018
|
|
|
40,849
|
|
|||
DSS
|
|
3,409
|
|
|
6,169
|
|
|
7,559
|
|
|||
Corporate Services
|
|
(19,403
|
)
|
|
(24,873
|
)
|
|
(22,166
|
)
|
|||
Eliminations
|
|
359
|
|
|
(466
|
)
|
|
(724
|
)
|
|||
Total Adjusted EBITDA (non-GAAP)
|
|
$
|
42,159
|
|
|
$
|
104,942
|
|
|
$
|
126,760
|
|
|
|
|
|
|
|
|
(a)
|
In Fiscal 2020, our business experienced an unprecedented and significant impact as a result of COVID-19 related campus store closures (the majority of which began in mid-March). The impact of the store closures affects the comparability of our results of operations and cash flows.
|
(b)
|
Adjusted Earnings and Adjusted EBITDA are a non-GAAP financial measures. See Adjusted Earnings (non-GAAP) and Adjusted EBITDA (non-GAAP) discussion below.
|
|
|
53 weeks ended
May 2, 2020 |
|
52 weeks ended
April 27, 2019 |
|
52 weeks ended
April 28, 2018 |
|||
Sales:
|
|
|
|
|
|
|
|||
Product sales and other
|
|
90.3
|
%
|
|
90.4
|
%
|
|
90.1
|
%
|
Rental income
|
|
9.7
|
|
|
9.6
|
|
|
9.9
|
|
Total sales
|
|
100.0
|
|
|
100.0
|
|
|
100.0
|
|
Cost of sales:
|
|
|
|
|
|
|
|||
Product and other cost of sales (a)
|
|
78.0
|
|
|
75.9
|
|
|
76.7
|
|
Rental cost of sales (a)
|
|
58.3
|
|
|
57.0
|
|
|
56.4
|
|
Total cost of sales
|
|
76.1
|
|
|
74.1
|
|
|
74.7
|
|
Gross margin
|
|
23.9
|
|
|
25.9
|
|
|
25.3
|
|
Selling and administrative expenses
|
|
21.9
|
|
|
20.8
|
|
|
19.7
|
|
Depreciation and amortization expense
|
|
3.3
|
|
|
3.2
|
|
|
3.0
|
|
Impairment loss (non-cash)
|
|
—
|
|
|
2.8
|
|
|
14.2
|
|
Restructuring and other charges
|
|
1.0
|
|
|
0.4
|
|
|
0.2
|
|
Transactions costs
|
|
—
|
|
|
—
|
|
|
0.1
|
|
Operating loss
|
|
(2.3
|
)%
|
|
(1.4
|
)%
|
|
(11.9
|
)%
|
|
53 weeks ended, May 2, 2020
|
||||||||||||||||||||||
Dollars in thousands
|
Retail
|
|
Wholesale
|
|
DSS
|
|
Corporate Services
|
|
Eliminations (b)
|
|
Total
|
||||||||||||
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Product sales and other
|
$
|
1,533,029
|
|
|
$
|
198,353
|
|
|
$
|
23,661
|
|
|
$
|
—
|
|
|
$
|
(83,843
|
)
|
|
1,671,200
|
|
|
Rental income
|
179,863
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
179,863
|
|
||||||
Total sales
|
1,712,892
|
|
|
198,353
|
|
|
23,661
|
|
|
—
|
|
|
(83,843
|
)
|
|
1,851,063
|
|
||||||
Cost of sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Product and other cost of sales
|
1,224,798
|
|
|
158,548
|
|
|
4,348
|
|
|
—
|
|
|
(83,992
|
)
|
|
1,303,702
|
|
||||||
Rental cost of sales
|
104,812
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
104,812
|
|
||||||
Total cost of sales
|
1,329,610
|
|
|
158,548
|
|
|
4,348
|
|
|
—
|
|
|
(83,992
|
)
|
|
1,408,514
|
|
||||||
Gross profit
|
383,282
|
|
|
39,805
|
|
|
19,313
|
|
|
—
|
|
|
149
|
|
|
442,549
|
|
||||||
Selling and administrative expenses
|
347,869
|
|
|
18,238
|
|
|
19,172
|
|
|
19,403
|
|
|
(210
|
)
|
|
404,472
|
|
||||||
Depreciation and amortization expense
|
47,099
|
|
|
5,963
|
|
|
8,670
|
|
|
128
|
|
|
—
|
|
|
61,860
|
|
||||||
Sub-Total:
|
$
|
(11,686
|
)
|
|
$
|
15,604
|
|
|
$
|
(8,529
|
)
|
|
$
|
(19,531
|
)
|
|
$
|
359
|
|
|
(23,783
|
)
|
|
Impairment loss (non-cash)
|
|
|
|
|
|
|
|
|
|
|
433
|
|
|||||||||||
Restructuring and other charges
|
|
|
|
|
|
|
|
|
|
|
18,567
|
|
|||||||||||
Transaction costs
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||
Operating loss
|
|
|
|
|
|
|
|
|
|
|
$
|
(42,783
|
)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
52 weeks ended, April 27, 2019
|
||||||||||||||||||||||
Dollars in thousands
|
Retail
|
|
Wholesale
|
|
DSS (a)
|
|
Corporate Services
|
|
Eliminations (b)
|
|
Total
|
||||||||||||
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Product sales and other
|
$
|
1,693,125
|
|
|
$
|
223,374
|
|
|
$
|
21,339
|
|
|
$
|
—
|
|
|
$
|
(99,078
|
)
|
|
1,838,760
|
|
|
Rental income
|
195,883
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
195,883
|
|
||||||
Total sales
|
1,889,008
|
|
|
223,374
|
|
|
21,339
|
|
|
—
|
|
|
(99,078
|
)
|
|
2,034,643
|
|
||||||
Cost of sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Product and other cost of sales
|
1,325,559
|
|
|
167,033
|
|
|
1,309
|
|
|
—
|
|
|
(98,562
|
)
|
|
1,395,339
|
|
||||||
Rental cost of sales
|
111,578
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
111,578
|
|
||||||
Total cost of sales
|
1,437,137
|
|
|
167,033
|
|
|
1,309
|
|
|
—
|
|
|
(98,562
|
)
|
|
1,506,917
|
|
||||||
Gross profit
|
451,871
|
|
|
56,341
|
|
|
20,030
|
|
|
—
|
|
|
(516
|
)
|
|
527,726
|
|
||||||
Selling and administrative expenses
|
363,230
|
|
|
21,323
|
|
|
14,504
|
|
|
24,873
|
|
|
(50
|
)
|
|
423,880
|
|
||||||
Depreciation and amortization expense
|
51,728
|
|
|
6,014
|
|
|
7,974
|
|
|
149
|
|
|
—
|
|
|
65,865
|
|
||||||
Sub-Total:
|
$
|
36,913
|
|
|
$
|
29,004
|
|
|
$
|
(2,448
|
)
|
|
$
|
(25,022
|
)
|
|
$
|
(466
|
)
|
|
37,981
|
|
|
Impairment loss (non-cash)
|
|
|
|
|
|
|
|
|
|
|
57,748
|
|
|||||||||||
Restructuring and other charges
|
|
|
|
|
|
|
|
|
|
|
7,233
|
|
|||||||||||
Transaction costs
|
|
|
|
|
|
|
|
|
|
|
654
|
|
|||||||||||
Operating loss
|
|
|
|
|
|
|
|
|
|
|
$
|
(27,654
|
)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
We acquired PaperRater, LLC on August 21, 2018. The consolidated financial statements for the 52 weeks ended April 27, 2019 include the financial results of PaperRater in the DSS Segment from the acquisition date, August 21, 2018, to April 27, 2019.
|
(b)
|
For additional information related to the intercompany activities and eliminations, see Part II - Item 8. Financial Statements and Supplementary Data - Note 6. Acquisitions and Note 7. Segment Reporting.
|
Dollars in thousands
|
|
53 weeks ended
May 2, 2020 |
|
52 weeks ended
April 27, 2019 |
|
%
|
||||
Product sales and other
|
|
1,671,200
|
|
|
1,838,760
|
|
|
(9.1)%
|
||
Rental income
|
|
179,863
|
|
|
195,883
|
|
|
(8.2)%
|
||
Total Sales
|
|
$
|
1,851,063
|
|
|
$
|
2,034,643
|
|
|
(9.0)%
|
Sales variances
|
|
53 weeks ended
|
||
Dollars in millions
|
|
May 2,
2020
|
||
Retail Sales
|
|
|
||
New stores
|
|
$
|
68.0
|
|
Closed stores
|
|
(60.2
|
)
|
|
Comparable stores (a)
|
|
(177.2
|
)
|
|
Textbook rental deferral
|
|
4.3
|
|
|
Service revenue (b)
|
|
(7.8
|
)
|
|
Other (c)
|
|
(3.2
|
)
|
|
Retail Sales subtotal:
|
|
$
|
(176.1
|
)
|
Wholesale Sales
|
|
$
|
(25.0
|
)
|
DSS Sales
|
|
$
|
2.3
|
|
Eliminations (d)
|
|
$
|
15.2
|
|
Total sales variance
|
|
$
|
(183.6
|
)
|
(a)
|
Comparable store sales includes sales from physical stores that have been open for an entire fiscal year period and virtual store sales for the period, does not include sales from closed stores for all periods presented, and digital agency sales are included on a gross basis.
|
(b)
|
Service revenue includes Promoversity, brand partnerships, shipping and handling, digital content, software, services, 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 Part II - Item 8. Financial Statements and Supplementary Data - Note 7. Segment Reporting for a discussion of intercompany activities and eliminations.
|
|
|
Fiscal 2020
|
|
Fiscal 2019
|
||||||||
|
|
Physical
|
|
Virtual
|
|
Physical
|
|
Virtual
|
||||
Number of stores at beginning of period
|
|
772
|
|
|
676
|
|
|
768
|
|
|
676
|
|
Opened
|
|
50
|
|
|
71
|
|
|
35
|
|
|
33
|
|
Closed
|
|
50
|
|
|
100
|
|
|
31
|
|
|
33
|
|
Number of stores at end of period
|
|
772
|
|
|
647
|
|
|
772
|
|
|
676
|
|
|
|
|
|
|
|
|
|
|
Comparable Store Sales variances for Retail
|
|
53 weeks ended
|
|||||
Dollars in millions
|
|
May 2, 2020
|
|||||
Textbooks (Course Materials)
|
|
$
|
(93.8
|
)
|
|
(8.4
|
)%
|
General Merchandise
|
|
(68.0
|
)
|
|
(11.9
|
)%
|
|
Trade Books
|
|
(9.4
|
)
|
|
(22.3
|
)%
|
|
Total Comparable Store Sales
|
|
$
|
(171.2
|
)
|
|
(9.9
|
)%
|
|
|
53 weeks ended
|
|
52 weeks ended
|
||||||||
Dollars in thousands
|
|
May 2,
2020 |
|
% of
Related Sales |
|
April 27,
2019 |
|
% of
Related Sales |
||||
Product and other cost of sales
|
|
$
|
1,224,798
|
|
|
79.9%
|
|
$
|
1,325,559
|
|
|
78.3%
|
Rental cost of sales
|
|
104,812
|
|
|
58.3%
|
|
111,578
|
|
|
57.0%
|
||
Total Cost of Sales
|
|
$
|
1,329,610
|
|
|
77.6%
|
|
$
|
1,437,137
|
|
|
76.1%
|
|
|
53 weeks ended
|
|
52 weeks ended
|
||||||||
Dollars in thousands
|
|
May 2,
2020 |
|
% of
Related Sales |
|
April 27,
2019 |
|
% of
Related Sales |
||||
Product and other gross margin
|
|
$
|
308,231
|
|
|
20.1%
|
|
$
|
367,566
|
|
|
21.7%
|
Rental gross margin
|
|
75,051
|
|
|
41.7%
|
|
84,305
|
|
|
43.0%
|
||
Gross Margin
|
|
$
|
383,282
|
|
|
22.4%
|
|
$
|
451,871
|
|
|
23.9%
|
•
|
Product and other gross margin decreased (160 basis points), driven primarily by lower margin rates due to higher markdowns (135 basis points), higher costs related to our college and university contracts (75 basis points) resulting from contract renewals and new store contracts, and an unfavorable sales mix (10 basis points) due to lower high-margin general merchandise sales, partially offset by improvements in shrink rates (60 basis points).
|
•
|
Rental gross margin decreased (130 basis points), driven primarily by higher costs related to our college and university contracts (210 basis points) resulting from contract renewals and new store contracts, partially offset by a favorable rental mix (50 basis points) and higher rental margin rates (25 basis points).
|
|
|
53 weeks ended
|
|
52 weeks ended
|
||||||||
Dollars in thousands
|
|
May 2,
2020 |
|
% of
Sales |
|
April 27,
2019 |
|
% of
Sales |
||||
Selling and Administrative Expenses
|
|
$
|
404,472
|
|
|
21.9%
|
|
$
|
423,880
|
|
|
20.8%
|
|
|
53 weeks ended
|
|
52 weeks ended
|
||||||||
Dollars in thousands
|
|
May 2,
2020 |
|
% of
Sales |
|
April 27,
2019 |
|
% of
Sales |
||||
Depreciation and Amortization Expense
|
|
$
|
61,860
|
|
|
3.3%
|
|
$
|
65,865
|
|
|
3.2%
|
|
|
53 weeks ended
|
|
52 weeks ended
|
||||||||
Dollars in thousands
|
|
May 2,
2020 |
|
% of
Sales |
|
April 27,
2019 |
|
% of
Sales |
||||
Operating Loss
|
|
$
|
(42,783
|
)
|
|
(2.3)%
|
|
$
|
(27,654
|
)
|
|
(1.4)%
|
Dollars in thousands
|
|
53 weeks ended
May 2, 2020 |
|
52 weeks ended
April 27, 2019 |
||||
Interest Expense, Net
|
|
$
|
7,445
|
|
|
$
|
9,780
|
|
|
|
53 weeks ended
|
|
52 weeks ended
|
||||||||
Dollars in thousands
|
|
April 27,
2019
|
|
Effective Rate
|
|
April 27,
2019
|
|
Effective Rate
|
||||
Income Tax Benefit
|
|
$
|
(11,978
|
)
|
|
23.8%
|
|
$
|
(13,060
|
)
|
|
34.9%
|
Dollars in thousands
|
|
53 weeks ended
May 2, 2020 |
|
52 weeks ended
April 27, 2019 |
||||
Net Loss
|
|
$
|
(38,250
|
)
|
|
$
|
(24,374
|
)
|
|
52 weeks ended, April 27, 2019
|
||||||||||||||||||||||
Dollars in thousands
|
Retail
|
|
Wholesale
|
|
DSS (a)
|
|
Corporate Services
|
|
Eliminations (b)
|
|
Total
|
||||||||||||
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Product sales and other
|
$
|
1,693,125
|
|
|
$
|
223,374
|
|
|
$
|
21,339
|
|
|
$
|
—
|
|
|
$
|
(99,078
|
)
|
|
1,838,760
|
|
|
Rental income
|
195,883
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
195,883
|
|
||||||
Total sales
|
1,889,008
|
|
|
223,374
|
|
|
21,339
|
|
|
—
|
|
|
(99,078
|
)
|
|
2,034,643
|
|
||||||
Cost of sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Product and other cost of sales
|
1,325,559
|
|
|
167,033
|
|
|
1,309
|
|
|
—
|
|
|
(98,562
|
)
|
|
1,395,339
|
|
||||||
Rental cost of sales
|
111,578
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
111,578
|
|
||||||
Total cost of sales
|
1,437,137
|
|
|
167,033
|
|
|
1,309
|
|
|
—
|
|
|
(98,562
|
)
|
|
1,506,917
|
|
||||||
Gross profit
|
451,871
|
|
|
56,341
|
|
|
20,030
|
|
|
—
|
|
|
(516
|
)
|
|
527,726
|
|
||||||
Selling and administrative expenses
|
363,230
|
|
|
21,323
|
|
|
14,504
|
|
|
24,873
|
|
|
(50
|
)
|
|
423,880
|
|
||||||
Depreciation and amortization expense
|
51,728
|
|
|
6,014
|
|
|
7,974
|
|
|
149
|
|
|
—
|
|
|
65,865
|
|
||||||
Sub-Total:
|
$
|
36,913
|
|
|
$
|
29,004
|
|
|
$
|
(2,448
|
)
|
|
$
|
(25,022
|
)
|
|
$
|
(466
|
)
|
|
37,981
|
|
|
Impairment loss (non-cash)
|
|
|
|
|
|
|
|
|
|
|
57,748
|
|
|||||||||||
Restructuring and other charges
|
|
|
|
|
|
|
|
|
|
|
7,233
|
|
|||||||||||
Transaction costs
|
|
|
|
|
|
|
|
|
|
|
654
|
|
|||||||||||
Operating loss
|
|
|
|
|
|
|
|
|
|
|
$
|
(27,654
|
)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
52 weeks ended, April 28, 2018
|
||||||||||||||||||||||
Dollars in thousands
|
Retail
|
|
Wholesale
|
|
DSS (a)
|
|
Corporate Services
|
|
Eliminations (b)
|
|
Total
|
||||||||||||
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Product sales and other
|
$
|
1,805,396
|
|
|
$
|
258,369
|
|
|
$
|
15,762
|
|
|
$
|
—
|
|
|
$
|
(95,055
|
)
|
|
1,984,472
|
|
|
Rental income
|
219,145
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
219,145
|
|
||||||
Total sales
|
2,024,541
|
|
|
258,369
|
|
|
15,762
|
|
|
—
|
|
|
(95,055
|
)
|
|
2,203,617
|
|
||||||
Cost of sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Product and other cost of sales
|
1,418,618
|
|
|
198,041
|
|
|
359
|
|
|
—
|
|
|
(94,331
|
)
|
|
1,522,687
|
|
||||||
Rental cost of sales
|
123,697
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
123,697
|
|
||||||
Total cost of sales
|
1,542,315
|
|
|
198,041
|
|
|
359
|
|
|
—
|
|
|
(94,331
|
)
|
|
1,646,384
|
|
||||||
Gross profit
|
482,226
|
|
|
60,328
|
|
|
15,403
|
|
|
—
|
|
|
(724
|
)
|
|
557,233
|
|
||||||
Selling and administrative expenses
|
380,984
|
|
|
22,752
|
|
|
7,844
|
|
|
22,166
|
|
|
—
|
|
|
433,746
|
|
||||||
Depreciation and amortization expense
|
53,955
|
|
|
6,188
|
|
|
5,253
|
|
|
190
|
|
|
—
|
|
|
65,586
|
|
||||||
Sub-Total:
|
$
|
47,287
|
|
|
$
|
31,388
|
|
|
$
|
2,306
|
|
|
$
|
(22,356
|
)
|
|
$
|
(724
|
)
|
|
57,901
|
|
|
Impairment loss (non-cash)
|
|
|
|
|
|
|
|
|
|
|
313,130
|
|
|||||||||||
Restructuring and other charges
|
|
|
|
|
|
|
|
|
|
|
5,429
|
|
|||||||||||
Transaction costs
|
|
|
|
|
|
|
|
|
|
|
2,045
|
|
|||||||||||
Operating loss
|
|
|
|
|
|
|
|
|
|
|
$
|
(262,703
|
)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
We acquired PaperRater, LLC on August 21, 2018. The consolidated financial statements for the 52 weeks ended April 27, 2019 include the financial results of PaperRater in the DSS Segment from the acquisition date, August 21, 2018, to April 27, 2019.
|
(b)
|
For additional information related to the intercompany activities and eliminations, see Part II - Item 8. Financial Statements and Supplementary Data - Note 6. Acquisitions and Note 7. Segment Reporting.
|
|
|
52 weeks ended
|
||||||||
Dollars in thousands
|
|
April 27,
2019
|
|
April 28,
2018
|
|
%
|
||||
Product sales and other
|
|
1,838,760
|
|
|
1,984,472
|
|
|
(7.3)%
|
||
Rental income
|
|
195,883
|
|
|
219,145
|
|
|
(10.6)%
|
||
Total Sales
|
|
$
|
2,034,643
|
|
|
$
|
2,203,617
|
|
|
(7.7)%
|
Sales variances
|
|
52 weeks ended
|
||
Dollars in millions
|
|
April 29,
2019
|
||
Retail Sales
|
|
|
||
New stores
|
|
$
|
54.2
|
|
Closed stores
|
|
(83.2
|
)
|
|
Comparable stores (a)
|
|
(103.1
|
)
|
|
Textbook rental deferral
|
|
0.2
|
|
|
Service revenue (b)
|
|
(4.1
|
)
|
|
Other (c)
|
|
0.4
|
|
|
Retail Sales subtotal:
|
|
$
|
(135.6
|
)
|
Wholesale Sales
|
|
$
|
(35.0
|
)
|
DSS Sales (d)
|
|
$
|
5.6
|
|
Eliminations (e)
|
|
$
|
(4.0
|
)
|
Total sales variance
|
|
$
|
(169.0
|
)
|
(a)
|
Comparable store sales includes sales from physical stores that have been open for an entire fiscal year period and virtual store sales for the period, does not include sales from closed stores for all periods presented, and digital agency sales are included on a gross basis.
|
(b)
|
Service revenue includes Promoversity, brand partnerships, shipping and handling, digital content, software, services, 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)
|
DSS revenue includes Student Brands subscription-based writing services business, which we acquired on August 3, 2017. The consolidated financial statements for the 52 weeks ended April 27, 2019 include the financial results of Student Brands in the DSS segment and the consolidated financial statements for the 52 weeks ended April 28, 2018 include the financial results of Student Brands from the date of acquisition on August 3, 2017.
|
(e)
|
Eliminates Wholesale sales and service fees to Retail and Retail commissions earned from Wholesale. See Part II - Item 8. Financial Statements and Supplementary Data - Note 7. Segment Reporting for a discussion of intercompany activities and eliminations.
|
|
|
Fiscal 2019
|
|
Fiscal 2018
|
||||||||
|
|
Physical
|
|
Virtual
|
|
Physical
|
|
Virtual
|
||||
Number of stores at beginning of period
|
|
768
|
|
|
676
|
|
|
769
|
|
|
712
|
|
Opened
|
|
35
|
|
|
33
|
|
|
33
|
|
|
21
|
|
Closed
|
|
31
|
|
|
33
|
|
|
34
|
|
|
57
|
|
Number of stores at end of period
|
|
772
|
|
|
676
|
|
|
768
|
|
|
676
|
|
|
|
|
|
|
|
|
|
|
Comparable Store Sales variances for Retail
|
|
52 weeks ended
|
|||||
Dollars in millions
|
|
April 27, 2019
|
|||||
Textbooks (Course Materials)
|
|
$
|
(97.9
|
)
|
|
(8.0
|
)%
|
General Merchandise
|
|
8.7
|
|
|
1.5
|
%
|
|
Trade Books
|
|
(3.8
|
)
|
|
(8.2
|
)%
|
|
Total Comparable Store Sales
|
|
$
|
(93.0
|
)
|
|
(5.1
|
)%
|
|
|
52 weeks ended
|
|
52 weeks ended
|
||||||||
Dollars in thousands
|
|
April 27,
2019 |
|
% of
Related Sales |
|
April 28,
2018 |
|
% of
Related Sales |
||||
Product and other cost of sales
|
|
$
|
1,325,559
|
|
|
78.3%
|
|
$
|
1,418,618
|
|
|
78.6%
|
Rental cost of sales
|
|
111,578
|
|
|
57.0%
|
|
123,697
|
|
|
56.4%
|
||
Total Cost of Sales
|
|
$
|
1,437,137
|
|
|
76.1%
|
|
$
|
1,542,315
|
|
|
76.2%
|
|
|
52 weeks ended
|
|
52 weeks ended
|
||||||||
Dollars in thousands
|
|
April 27,
2019 |
|
% of
Related Sales |
|
April 28,
2018 |
|
% of
Related Sales |
||||
Product and other gross margin
|
|
$
|
367,566
|
|
|
21.7%
|
|
$
|
386,778
|
|
|
21.4%
|
Rental gross margin
|
|
84,305
|
|
|
43.0%
|
|
95,448
|
|
|
43.6%
|
||
Gross Margin
|
|
$
|
451,871
|
|
|
23.9%
|
|
$
|
482,226
|
|
|
23.8%
|
•
|
Product and other gross margin increased (30 basis points), driven primarily by a favorable sales mix (105 basis points), partially offset by higher costs related to our college and university contracts (50 basis points) resulting from contract renewals and new store contracts and lower course material margin rates (30 basis points).
|
•
|
Rental gross margin decreased (60 basis points), driven primarily by higher costs related to our college and university contracts (125 basis points) resulting from contract renewals and new store contracts, and an unfavorable rental mix (25 basis points), partially offset by higher rental margin rates (90 basis points).
|
|
|
52 weeks ended
|
|
52 weeks ended
|
||||||||
Dollars in thousands
|
|
April 27,
2019 |
|
% of
Sales |
|
April 28,
2018 |
|
% of
Sales |
||||
Selling and Administrative Expenses
|
|
$
|
423,880
|
|
|
20.8%
|
|
$
|
433,746
|
|
|
19.7%
|
|
|
52 weeks ended
|
|
52 weeks ended
|
||||||||
Dollars in thousands
|
|
April 27,
2019 |
|
% of
Sales |
|
April 28,
2018 |
|
% of
Sales |
||||
Depreciation and Amortization Expense
|
|
$
|
65,865
|
|
|
3.2%
|
|
$
|
65,586
|
|
|
3.0%
|
|
|
52 weeks ended
|
|
52 weeks ended
|
||||||||
Dollars in thousands
|
|
April 27,
2019 |
|
% of
Sales |
|
April 28,
2018 |
|
% of
Sales |
||||
Operating Loss
|
|
$
|
(27,654
|
)
|
|
(1.4)%
|
|
$
|
(262,703
|
)
|
|
(11.9)%
|
|
|
52 weeks ended
|
||||||
Dollars in thousands
|
|
April 27, 2019
|
|
April 28, 2018
|
||||
Interest Expense, Net
|
|
$
|
9,780
|
|
|
$
|
10,306
|
|
|
|
52 weeks ended
|
|
52 weeks ended
|
||||||||
Dollars in thousands
|
|
April 27,
2019
|
|
Effective Rate
|
|
April 28,
2018
|
|
Effective Rate
|
||||
Income Tax (Benefit) Expense
|
|
$
|
(13,060
|
)
|
|
34.9%
|
|
$
|
(20,443
|
)
|
|
7.5%
|
|
|
52 weeks ended
|
||||||
Dollars in thousands
|
|
April 27, 2019
|
|
April 28, 2018
|
||||
Net Loss
|
|
$
|
(24,374
|
)
|
|
$
|
(252,566
|
)
|
Dollars in thousands
|
|
53 weeks ended
May 2, 2020 (a) |
|
52 weeks ended
April 27, 2019 |
|
52 weeks ended
April 28, 2018 |
||||||
Net loss
|
|
$
|
(38,250
|
)
|
|
$
|
(24,374
|
)
|
|
$
|
(252,566
|
)
|
Reconciling items, after-tax (below)
|
|
17,124
|
|
|
49,786
|
|
|
309,515
|
|
|||
Adjusted Earnings (non-GAAP)
|
|
$
|
(21,126
|
)
|
|
$
|
25,412
|
|
|
$
|
56,949
|
|
|
|
|
|
|
|
|
||||||
Reconciling items, pre-tax
|
|
|
|
|
|
|
||||||
Impairment loss (non-cash) (b)
|
|
$
|
433
|
|
|
$
|
57,748
|
|
|
$
|
313,130
|
|
Inventory valuation amortization (non-cash) (c)
|
|
—
|
|
|
—
|
|
|
3,273
|
|
|||
Content amortization (non-cash) (d)
|
|
4,082
|
|
|
1,096
|
|
|
—
|
|
|||
Restructuring and other charges (b)
|
|
18,567
|
|
|
7,233
|
|
|
5,429
|
|
|||
Transaction costs (b)
|
|
—
|
|
|
654
|
|
|
2,045
|
|
|||
Reconciling items, pre-tax
|
|
23,082
|
|
|
66,731
|
|
|
323,877
|
|
|||
Less: Pro forma income tax impact (e)
|
|
5,958
|
|
|
16,945
|
|
|
14,362
|
|
|||
Reconciling items, after-tax
|
|
$
|
17,124
|
|
|
$
|
49,786
|
|
|
$
|
309,515
|
|
(a)
|
In Fiscal 2020, our business experienced an unprecedented and significant impact as a result of COVID-19 related campus store closures (the majority of which began in mid-March). The impact of the store closures affects the comparability of our results of operations and cash flows.
|
(b)
|
See Management Discussion and Analysis - Results of Operations discussion above.
|
(c)
|
Gross margin excludes $3.3 million of incremental cost of sales related to amortization of the Wholesale inventory fair value adjustment related to the MBS acquisition in February 2017.
|
(d)
|
Earnings are adjusted for amortization expense (non-cash) related to content development costs which are included in cost of goods sold.
|
(e)
|
Represents the income tax effects of the non-GAAP items.
|
Dollars in thousands
|
|
53 weeks ended
May 2, 2020 (a)(b) |
|
52 weeks ended
April 27, 2019 (b) |
|
52 weeks ended
April 28, 2018 |
||||||
Net loss
|
|
$
|
(38,250
|
)
|
|
$
|
(24,374
|
)
|
|
$
|
(252,566
|
)
|
Add:
|
|
|
|
|
|
|
||||||
Depreciation and amortization expense
|
|
61,860
|
|
|
65,865
|
|
|
65,586
|
|
|||
Content amortization (non-cash) (b)
|
|
4,082
|
|
|
1,096
|
|
|
—
|
|
|||
Interest expense, net
|
|
7,445
|
|
|
9,780
|
|
|
10,306
|
|
|||
Income tax benefit
|
|
(11,978
|
)
|
|
(13,060
|
)
|
|
(20,443
|
)
|
|||
Impairment loss (non-cash) (c)
|
|
433
|
|
|
57,748
|
|
|
313,130
|
|
|||
Inventory valuation amortization (non-cash) (d)
|
|
—
|
|
|
—
|
|
|
3,273
|
|
|||
Restructuring and other charges (c)
|
|
18,567
|
|
|
7,233
|
|
|
5,429
|
|
|||
Transaction costs (c)
|
|
—
|
|
|
654
|
|
|
2,045
|
|
|||
Adjusted EBITDA (non-GAAP)
|
|
$
|
42,159
|
|
|
$
|
104,942
|
|
|
$
|
126,760
|
|
(a)
|
In Fiscal 2020, our business experienced an unprecedented and significant impact as a result of COVID-19 related campus store closures (the majority of which began in mid-March). The impact of the store closures affects the comparability of our results of operations and cash flows.
|
(b)
|
For the 53 weeks ended May 2, 2020 and 52 weeks ended April 27, 2019, earnings are adjusted for amortization expense (non-cash) related to content development costs which are included in cost of goods sold.
|
(c)
|
See Management Discussion and Analysis - Results of Operations discussion above.
|
(d)
|
For the 52 weeks ended April 28, 2018, gross margin excludes $3.3 million of incremental cost of sales related to amortization of the Wholesale inventory fair value adjustment related to the MBS acquisition in February 2017.
|
Adjusted EBITDA - by Segment
|
|
53 weeks ended May 2, 2020 (a)
|
||||||||||||||||||||||
Dollars in thousands
|
|
Retail
|
|
Wholesale
|
|
DSS
|
|
Corporate Services
|
|
Eliminations
|
|
Total
Fiscal 2020
|
||||||||||||
Sales
|
|
$
|
1,712,892
|
|
|
$
|
198,353
|
|
|
$
|
23,661
|
|
|
$
|
—
|
|
|
$
|
(83,843
|
)
|
|
$
|
1,851,063
|
|
Cost of sales (b)
|
|
(1,328,796
|
)
|
|
(158,548
|
)
|
|
(1,080
|
)
|
|
—
|
|
|
83,992
|
|
|
(1,404,432
|
)
|
||||||
Gross profit
|
|
384,096
|
|
|
39,805
|
|
|
22,581
|
|
|
—
|
|
|
149
|
|
|
446,631
|
|
||||||
Selling and administrative expenses
|
|
347,869
|
|
|
18,238
|
|
|
19,172
|
|
|
19,403
|
|
|
(210
|
)
|
|
404,472
|
|
||||||
Adjusted EBITDA (non-GAAP)
|
|
$
|
36,227
|
|
|
$
|
21,567
|
|
|
$
|
3,409
|
|
|
$
|
(19,403
|
)
|
|
$
|
359
|
|
|
$
|
42,159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA - by Segment
|
|
52 weeks ended April 27, 2019
|
||||||||||||||||||||||
Dollars in thousands
|
|
Retail
|
|
Wholesale
|
|
DSS
|
|
Corporate Services
|
|
Eliminations
|
|
Total
Fiscal 2019
|
||||||||||||
Sales
|
|
$
|
1,889,008
|
|
|
$
|
223,374
|
|
|
$
|
21,339
|
|
|
$
|
—
|
|
|
$
|
(99,078
|
)
|
|
$
|
2,034,643
|
|
Cost of sales (c)
|
|
(1,436,684
|
)
|
|
(167,033
|
)
|
|
(666
|
)
|
|
—
|
|
|
98,562
|
|
|
(1,505,821
|
)
|
||||||
Gross profit
|
|
452,324
|
|
|
56,341
|
|
|
20,673
|
|
|
—
|
|
|
(516
|
)
|
|
528,822
|
|
||||||
Selling and administrative expenses
|
|
363,230
|
|
|
21,323
|
|
|
14,504
|
|
|
24,873
|
|
|
(50
|
)
|
|
423,880
|
|
||||||
Adjusted EBITDA (non-GAAP)
|
|
$
|
89,094
|
|
|
$
|
35,018
|
|
|
$
|
6,169
|
|
|
$
|
(24,873
|
)
|
|
$
|
(466
|
)
|
|
$
|
104,942
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA - by Segment
|
|
52 weeks ended April 28, 2018
|
||||||||||||||||||||||
Dollars in thousands
|
|
Retail
|
|
Wholesale
|
|
DSS
|
|
Corporate Services
|
|
Eliminations
|
|
Total
Fiscal 2018
|
||||||||||||
Sales
|
|
$
|
2,024,541
|
|
|
$
|
258,369
|
|
|
$
|
15,762
|
|
|
$
|
—
|
|
|
$
|
(95,055
|
)
|
|
$
|
2,203,617
|
|
Cost of sales (d)
|
|
(1,542,315
|
)
|
|
(194,768
|
)
|
|
(359
|
)
|
|
—
|
|
|
94,331
|
|
|
(1,643,111
|
)
|
||||||
Gross profit
|
|
482,226
|
|
|
63,601
|
|
|
15,403
|
|
|
—
|
|
|
(724
|
)
|
|
560,506
|
|
||||||
Selling and administrative expenses
|
|
380,984
|
|
|
22,752
|
|
|
7,844
|
|
|
22,166
|
|
|
—
|
|
|
433,746
|
|
||||||
Adjusted EBITDA (non-GAAP)
|
|
$
|
101,242
|
|
|
$
|
40,849
|
|
|
$
|
7,559
|
|
|
$
|
(22,166
|
)
|
|
$
|
(724
|
)
|
|
$
|
126,760
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
For the 53 weeks ended May 2, 2020, gross margin excludes $0.8 million and $3.7 million of amortization expense (non-cash) related to content development costs in the Retail Segment and DSS Segment, respectively.
|
(d)
|
For the 52 weeks ended April 28, 2018, gross margin excludes $3.3 million of incremental cost of sales related to amortization of the Wholesale inventory fair value adjustment related to the MBS acquisition in February 2017. See Management Discussion and Analysis - Results of Operations discussion above.
|
Dollars in thousands
|
|
Fiscal 2020
|
|
Fiscal 2019
|
|
Fiscal 2018
|
||||||
Cash, cash equivalents, and restricted cash at beginning of period
|
|
$
|
14,768
|
|
|
$
|
16,869
|
|
|
$
|
21,697
|
|
Net cash flows (used in) provided by operating activities
|
|
(16,103
|
)
|
|
120,817
|
|
|
60,042
|
|
|||
Net cash flows used in investing activities
|
|
(29,592
|
)
|
|
(54,646
|
)
|
|
(100,032
|
)
|
|||
Net cash flows provided by (used in) financing activities
|
|
39,935
|
|
|
(68,272
|
)
|
|
35,162
|
|
|||
Cash, cash equivalents, and restricted cash at end of period
|
|
$
|
9,008
|
|
|
$
|
14,768
|
|
|
$
|
16,869
|
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
|
Total
|
|
Less Than
1 Year
|
|
1-3
Years
|
|
3-5
Years
|
|
More Than
5 Years
|
||||||||||
Credit Facility (a)
|
|
$
|
99.7
|
|
|
$
|
99.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
FILO Facility (a)
|
|
150.0
|
|
|
75.0
|
|
|
75.0
|
|
|
—
|
|
|
—
|
|
|||||
Lease obligations (excluding imputed interest) (b)
|
|
315.8
|
|
|
107.0
|
|
|
101.0
|
|
|
58.0
|
|
|
49.8
|
|
|||||
Purchase obligations (c)
|
|
21.8
|
|
|
10.6
|
|
|
8.0
|
|
|
3.2
|
|
|
—
|
|
|||||
Other long-term liabilities reflected on the balance sheet under GAAP (d) (e)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
587.3
|
|
|
$
|
292.3
|
|
|
$
|
184.0
|
|
|
$
|
61.2
|
|
|
$
|
49.8
|
|
(a)
|
As of May 2, 2020, we had a total of $174.7 million of outstanding borrowings under the Credit Facility and FILO Facility. Excludes interest which is generally at a base rate of LIBOR, plus a variable rate. See Financing Arrangements discussion above for information about future borrowings and payments under the FILO Credit Facility.
|
(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 to120 days' notice. Annual projections are based on current minimum guarantee amounts. In approximately 72% 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. Excludes obligations under store leases for property insurance and real estate taxes, which totaled approximately 1.7% of the minimum rent payments under those leases.
|
(c)
|
Includes information technology contracts.
|
(d)
|
Other long-term liabilities excludes $25.7 million of tax liabilities related to the long-term tax payable associated with the LIFO reserve and $0.1 million of unrecognized tax benefits, for which we cannot make a reasonably reliable estimate of the amount and period of payment. See Income Tax Implications on Liquidity discussed above.
|
(e)
|
Other long-term liabilities excludes expected payments related to employee benefit plans. See Part II - Item 8. Financial Statements and Supplementary Data — Note 13. Employee Benefit Plans.
|
FINANCIAL STATEMENT INDEX
|
|||
|
|
|
Page No.
|
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|
|
|
|
53 weeks ended
May 2, 2020 |
|
52 weeks ended
April 27, 2019 |
|
52 weeks ended
April 28, 2018 |
||||||
Sales:
|
|
|
|
|
|
|
||||||
Product sales and other
|
|
$
|
1,671,200
|
|
|
$
|
1,838,760
|
|
|
$
|
1,984,472
|
|
Rental income
|
|
179,863
|
|
|
195,883
|
|
|
219,145
|
|
|||
Total sales
|
|
1,851,063
|
|
|
2,034,643
|
|
|
2,203,617
|
|
|||
Cost of sales:
|
|
|
|
|
|
|
||||||
Product and other cost of sales
|
|
1,303,702
|
|
|
1,395,339
|
|
|
1,522,687
|
|
|||
Rental cost of sales
|
|
104,812
|
|
|
111,578
|
|
|
123,697
|
|
|||
Total cost of sales
|
|
1,408,514
|
|
|
1,506,917
|
|
|
1,646,384
|
|
|||
Gross profit
|
|
442,549
|
|
|
527,726
|
|
|
557,233
|
|
|||
Selling and administrative expenses
|
|
404,472
|
|
|
423,880
|
|
|
433,746
|
|
|||
Depreciation and amortization expense
|
|
61,860
|
|
|
65,865
|
|
|
65,586
|
|
|||
Impairment loss (non-cash)
|
|
433
|
|
|
57,748
|
|
|
313,130
|
|
|||
Restructuring and other charges
|
|
18,567
|
|
|
7,233
|
|
|
5,429
|
|
|||
Transaction costs
|
|
—
|
|
|
654
|
|
|
2,045
|
|
|||
Operating loss
|
|
(42,783
|
)
|
|
(27,654
|
)
|
|
(262,703
|
)
|
|||
Interest expense, net
|
|
7,445
|
|
|
9,780
|
|
|
10,306
|
|
|||
Loss before income taxes
|
|
(50,228
|
)
|
|
(37,434
|
)
|
|
(273,009
|
)
|
|||
Income tax benefit
|
|
(11,978
|
)
|
|
(13,060
|
)
|
|
(20,443
|
)
|
|||
Net loss
|
|
$
|
(38,250
|
)
|
|
$
|
(24,374
|
)
|
|
$
|
(252,566
|
)
|
|
|
|
|
|
|
|
||||||
Loss per share of Common Stock
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
(0.80
|
)
|
|
$
|
(0.52
|
)
|
|
$
|
(5.40
|
)
|
Diluted
|
|
$
|
(0.80
|
)
|
|
$
|
(0.52
|
)
|
|
$
|
(5.40
|
)
|
Weighted average shares of Common Stock outstanding:
|
|
|
|
|
|
|
||||||
Basic
|
|
48,013
|
|
|
47,306
|
|
|
46,763
|
|
|||
Diluted
|
|
48,013
|
|
|
47,306
|
|
|
46,763
|
|
|
|
As of
|
||||||
|
|
May 2, 2020
|
|
April 27, 2019
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
8,242
|
|
|
$
|
14,013
|
|
Receivables, net
|
|
90,851
|
|
|
98,246
|
|
||
Merchandise inventories, net
|
|
428,939
|
|
|
420,322
|
|
||
Textbook rental inventories
|
|
40,710
|
|
|
47,001
|
|
||
Prepaid expenses and other current assets
|
|
16,177
|
|
|
11,778
|
|
||
Total current assets
|
|
584,919
|
|
|
591,360
|
|
||
Property and equipment, net
|
|
97,739
|
|
|
109,777
|
|
||
Operating lease right-of-use assets
|
|
250,837
|
|
|
—
|
|
||
Intangible assets, net
|
|
175,125
|
|
|
194,978
|
|
||
Goodwill
|
|
4,700
|
|
|
4,700
|
|
||
Deferred tax assets, net
|
|
7,805
|
|
|
2,425
|
|
||
Other noncurrent assets
|
|
35,307
|
|
|
42,940
|
|
||
Total assets
|
|
$
|
1,156,432
|
|
|
$
|
946,180
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
143,678
|
|
|
$
|
186,818
|
|
Accrued liabilities
|
|
95,420
|
|
|
121,720
|
|
||
Current operating lease liabilities
|
|
92,571
|
|
|
—
|
|
||
Short-term borrowings
|
|
75,000
|
|
|
100,000
|
|
||
Total current liabilities
|
|
406,669
|
|
|
408,538
|
|
||
Long-term operating lease liabilities
|
|
186,142
|
|
|
—
|
|
||
Other long-term liabilities
|
|
46,170
|
|
|
53,514
|
|
||
Long-term borrowings
|
|
99,700
|
|
|
33,500
|
|
||
Total liabilities
|
|
738,681
|
|
|
495,552
|
|
||
Commitments and contingencies
|
|
—
|
|
|
—
|
|
||
Stockholders' equity:
|
|
|
|
|
||||
Preferred stock, $0.01 par value; authorized, 5,000 shares; issued and outstanding, none
|
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value; authorized, 200,000 shares; issued, 52,140 and 51,030 shares, respectively; outstanding, 48,298 and 47,563 shares, respectively
|
|
521
|
|
|
510
|
|
||
Additional paid-in capital
|
|
732,958
|
|
|
726,331
|
|
||
Accumulated deficit
|
|
(282,827
|
)
|
|
(244,577
|
)
|
||
Treasury stock, at cost
|
|
(32,901
|
)
|
|
(31,636
|
)
|
||
Total stockholders' equity
|
|
417,751
|
|
|
450,628
|
|
||
Total liabilities and stockholders' equity
|
|
$
|
1,156,432
|
|
|
$
|
946,180
|
|
|
|
53 weeks ended
May 2, 2020 |
|
52 weeks ended
April 27, 2019 |
|
52 weeks ended
April 28, 2018 |
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net loss
|
|
$
|
(38,250
|
)
|
|
$
|
(24,374
|
)
|
|
$
|
(252,566
|
)
|
Adjustments to reconcile net loss to net cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Depreciation and amortization expense
|
|
61,860
|
|
|
65,865
|
|
|
65,586
|
|
|||
Content amortization expense
|
|
4,082
|
|
|
1,096
|
|
|
—
|
|
|||
Amortization of deferred financing costs
|
|
1,095
|
|
|
1,550
|
|
|
1,502
|
|
|||
Impairment loss (non-cash)
|
|
433
|
|
|
57,748
|
|
|
313,130
|
|
|||
Deferred taxes
|
|
(5,380
|
)
|
|
(4,531
|
)
|
|
(14,765
|
)
|
|||
Stock-based compensation expense
|
|
6,638
|
|
|
9,017
|
|
|
8,459
|
|
|||
Changes in operating lease right-of-use assets and liabilities
|
|
18,399
|
|
|
—
|
|
|
—
|
|
|||
Changes in other long-term liabilities and other
|
|
(6,480
|
)
|
|
(6,314
|
)
|
|
(36,823
|
)
|
|||
Changes in other operating assets and liabilities, net
|
|
(58,500
|
)
|
|
20,760
|
|
|
(24,481
|
)
|
|||
Net cash flows (used in) provided by operating activities
|
|
(16,103
|
)
|
|
120,817
|
|
|
60,042
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Purchases of property and equipment
|
|
(36,192
|
)
|
|
(46,420
|
)
|
|
(42,809
|
)
|
|||
Acquisition of business, net of cash and restricted cash acquired
|
|
—
|
|
|
(10,000
|
)
|
|
(58,259
|
)
|
|||
Changes in other noncurrent assets and other
|
|
6,600
|
|
|
1,774
|
|
|
1,036
|
|
|||
Net cash flows used in investing activities
|
|
(29,592
|
)
|
|
(54,646
|
)
|
|
(100,032
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Proceeds from borrowings under Credit Agreement
|
|
600,900
|
|
|
521,200
|
|
|
674,500
|
|
|||
Repayments of borrowings under Credit Agreement
|
|
(559,700
|
)
|
|
(584,100
|
)
|
|
(637,700
|
)
|
|||
Payment of deferred financing costs
|
|
—
|
|
|
(3,395
|
)
|
|
—
|
|
|||
Purchase of treasury shares
|
|
(1,265
|
)
|
|
(1,977
|
)
|
|
(1,638
|
)
|
|||
Net cash flows provided by (used in) financing activities
|
|
39,935
|
|
|
(68,272
|
)
|
|
35,162
|
|
|||
Net decrease in cash, cash equivalents, and restricted cash
|
|
(5,760
|
)
|
|
(2,101
|
)
|
|
(4,828
|
)
|
|||
Cash, cash equivalents, and restricted cash at beginning of period
|
|
14,768
|
|
|
16,869
|
|
|
21,697
|
|
|||
Cash, cash equivalents, and restricted cash at end of period
|
|
$
|
9,008
|
|
|
$
|
14,768
|
|
|
$
|
16,869
|
|
Changes in other operating assets and liabilities, net:
|
|
|
|
|
|
|
||||||
Receivables, net
|
|
$
|
7,320
|
|
|
$
|
1,814
|
|
|
$
|
(13,670
|
)
|
Merchandise inventories
|
|
(8,617
|
)
|
|
23,237
|
|
|
(9,495
|
)
|
|||
Textbook rental inventories
|
|
6,291
|
|
|
778
|
|
|
5,047
|
|
|||
Prepaid expenses and other current assets
|
|
(4,399
|
)
|
|
69
|
|
|
(2,648
|
)
|
|||
Accounts payable and accrued liabilities
|
|
(59,095
|
)
|
|
(5,138
|
)
|
|
(3,715
|
)
|
|||
Changes in other operating assets and liabilities, net
|
|
$
|
(58,500
|
)
|
|
$
|
20,760
|
|
|
$
|
(24,481
|
)
|
|
|
|
|
|
|
|
||||||
Supplemental cash flow information:
|
|
|
|
|
|
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
|
||||||
Interest paid
|
|
$
|
6,796
|
|
|
$
|
8,589
|
|
|
$
|
8,035
|
|
Income taxes paid (net of refunds)
|
|
$
|
(4,141
|
)
|
|
$
|
10,277
|
|
|
$
|
25,549
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
Additional
|
|
|
|
|
|
|
|
|||||||||||||
|
|
Common Stock
|
|
Paid-In
|
|
Accumulated
|
|
Treasury Stock
|
|
Total
|
||||||||||||||
|
|
Shares
|
Amount
|
|
Capital
|
|
Deficit
|
|
Shares
|
Amount
|
|
Equity
|
||||||||||||
Balance at April 28, 2018
|
|
50,032
|
|
$
|
501
|
|
|
$
|
717,323
|
|
|
$
|
(220,203
|
)
|
|
3,115
|
|
$
|
(29,658
|
)
|
|
$
|
467,963
|
|
Stock-based compensation expense
|
|
|
|
|
9,017
|
|
|
|
|
|
|
|
9,017
|
|
||||||||||
Vested equity awards
|
|
998
|
|
9
|
|
|
(9
|
)
|
|
|
|
|
|
|
—
|
|
||||||||
Shares repurchased for tax withholdings for vested stock awards
|
|
|
|
|
|
|
|
|
352
|
|
(1,978
|
)
|
|
(1,978
|
)
|
|||||||||
Net loss
|
|
|
|
|
|
|
(24,374
|
)
|
|
|
|
|
(24,374
|
)
|
||||||||||
Balance at April 27, 2019
|
|
51,030
|
|
$
|
510
|
|
|
$
|
726,331
|
|
|
$
|
(244,577
|
)
|
|
3,467
|
|
$
|
(31,636
|
)
|
|
$
|
450,628
|
|
Stock-based compensation expense
|
|
|
|
|
6,638
|
|
|
|
|
|
|
|
6,638
|
|
||||||||||
Vested equity awards
|
|
1,110
|
|
11
|
|
|
(11
|
)
|
|
|
|
|
|
|
—
|
|
||||||||
Shares repurchased for tax withholdings for vested stock awards
|
|
|
|
|
|
|
|
|
375
|
|
(1,265
|
)
|
|
(1,265
|
)
|
|||||||||
Net loss
|
|
|
|
|
|
|
(38,250
|
)
|
|
|
|
|
(38,250
|
)
|
||||||||||
Balance at May 2, 2020
|
|
52,140
|
|
$
|
521
|
|
|
$
|
732,958
|
|
|
$
|
(282,827
|
)
|
|
3,842
|
|
$
|
(32,901
|
)
|
|
$
|
417,751
|
|
•
|
The consolidated financial statements for the 52 weeks ended April 27, 2019 include the financial results of PaperRater from the acquisition date, August 21, 2018, to April 27, 2019.
|
•
|
The consolidated financial statements for the 52 weeks ended April 28, 2018 include the financial results of Student Brands from the acquisition date, August 3, 2017, to April 28, 2018.
|
|
|
As of
|
||||||
|
|
5/2/2020
|
|
4/27/2019
|
||||
Trade accounts
|
|
$
|
75,702
|
|
|
$
|
74,311
|
|
Advances for book buybacks
|
|
766
|
|
|
6,339
|
|
||
Credit/debit card receivables
|
|
2,177
|
|
|
4,173
|
|
||
Other receivables
|
|
12,206
|
|
|
13,423
|
|
||
Total receivables, net
|
|
$
|
90,851
|
|
|
$
|
98,246
|
|
|
|
|
|
As of
|
||||||
|
|
Useful Life
|
|
May 2, 2020
|
|
April 27, 2019
|
||||
Property and equipment:
|
|
|
|
|
|
|
||||
Leasehold improvements
|
|
(a)
|
|
$
|
141,602
|
|
|
$
|
148,015
|
|
Machinery, equipment and display fixtures
|
|
3 - 5
|
|
246,447
|
|
|
240,171
|
|
||
Computer hardware and capitalized software costs
|
|
(b)
|
|
145,764
|
|
|
136,267
|
|
||
Office furniture and other
|
|
2 - 7
|
|
62,209
|
|
|
59,327
|
|
||
Content development costs
|
|
3 - 5
|
|
16,729
|
|
|
11,593
|
|
||
Construction in progress
|
|
|
|
3,878
|
|
|
5,499
|
|
||
Total property and equipment
|
|
|
|
616,629
|
|
|
600,872
|
|
||
Less accumulated depreciation and amortization
|
|
|
|
518,890
|
|
|
491,095
|
|
||
Total property and equipment, net
|
|
|
|
$
|
97,739
|
|
|
$
|
109,777
|
|
(a)
|
Leasehold improvements are capitalized and depreciated over the shorter of the lease term or the useful life of the improvements, ranging from one to 15 years.
|
(b)
|
System costs are capitalized and amortized over their estimated useful lives, from the date the systems become operational. Purchased software is generally amortized over a period of between 2 - 5 years.
|
|
|
53 weeks ended
May 2, 2020 |
|
52 weeks ended
April 27, 2019 |
|
52 weeks ended
April 28, 2018 |
||||||
Retail
|
|
|
|
|
|
|
||||||
Product Sales
|
|
$
|
1,493,044
|
|
|
$
|
1,645,357
|
|
|
$
|
1,753,528
|
|
Rental Income
|
|
179,863
|
|
|
195,883
|
|
|
219,145
|
|
|||
Service and Other Revenue (a)
|
|
39,985
|
|
|
47,768
|
|
|
51,868
|
|
|||
Retail Total Sales
|
|
$
|
1,712,892
|
|
|
$
|
1,889,008
|
|
|
$
|
2,024,541
|
|
Wholesale Sales
|
|
$
|
198,353
|
|
|
$
|
223,374
|
|
|
$
|
258,369
|
|
DSS Sales (b)
|
|
$
|
23,661
|
|
|
$
|
21,339
|
|
|
$
|
15,762
|
|
Eliminations (c)
|
|
$
|
(83,843
|
)
|
|
$
|
(99,078
|
)
|
|
$
|
(95,055
|
)
|
Total Sales
|
|
$
|
1,851,063
|
|
|
$
|
2,034,643
|
|
|
$
|
2,203,617
|
|
(a)
|
Service and other revenue primarily relates to brand partnerships and other service revenues.
|
(b)
|
DSS sales primarily relate to direct-to-student subscription-based revenue.
|
(c)
|
The sales eliminations represent the elimination of Wholesale sales and fulfillment service fees to Retail and the elimination of Retail commissions earned from Wholesale.
|
Deferred revenue as of April 28, 2018
|
|
$
|
20,144
|
|
Additions to deferred revenue during the period
|
|
212,424
|
|
|
Reductions to deferred revenue for revenue recognized during the period
|
|
(212,150
|
)
|
|
Deferred revenue as of April 27, 2019
|
|
$
|
20,418
|
|
Additions to deferred revenue during the period
|
|
193,235
|
|
|
Reductions to deferred revenue for revenue recognized during the period
|
|
(200,280
|
)
|
|
Deferred revenue balance as of May 2, 2020
|
|
$
|
13,373
|
|
|
|
53 weeks ended
May 2, 2020 |
||
Variable lease expense
|
|
$
|
73,455
|
|
Operating lease expense
|
|
159,289
|
|
|
Net lease expense
|
|
$
|
232,744
|
|
|
|
As of
|
||
|
|
May 2, 2020
|
||
Fiscal 2021
|
|
$
|
107,010
|
|
Fiscal 2022
|
|
56,663
|
|
|
Fiscal 2023
|
|
44,356
|
|
|
Fiscal 2024
|
|
35,326
|
|
|
Fiscal 2025
|
|
22,727
|
|
|
Thereafter
|
|
49,767
|
|
|
Total lease payments
|
|
315,849
|
|
|
Less: imputed interest
|
|
(37,136
|
)
|
|
Operating lease liabilities at period end
|
|
$
|
278,713
|
|
|
|
As of
|
||
|
|
May 2, 2020
|
||
Weighted average remaining lease term (in years)
|
|
5.2 years
|
|
|
Weighted average discount rate
|
|
4.6
|
%
|
|
|
|
|
||
Supplemental cash flow information:
|
|
|
||
Cash payments for lease liabilities within operating activities
|
|
$
|
140,670
|
|
ROU assets obtained in exchange for lease liabilities from initial recognition
|
|
$
|
131,175
|
|
Type of Intangible
|
|
Amount
|
|
Estimated Useful Life
|
||
Content
|
|
$
|
14,500
|
|
|
5
|
Technology
|
|
8,000
|
|
|
5
|
|
Non-Compete Agreements
|
|
4,000
|
|
|
3
|
|
Subscriber List
|
|
1,800
|
|
|
2
|
|
Total Intangibles:
|
|
$
|
28,300
|
|
|
|
•
|
The sales eliminations represent the elimination of Wholesale sales and fulfillment service fees to Retail and the elimination of Retail commissions earned from Wholesale, and
|
•
|
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.
|
|
|
As of
|
||||||
|
|
May 2, 2020
|
|
April 27, 2019
|
||||
Total Assets
|
|
|
|
|
||||
Retail (includes goodwill of $0 and $0, respectively)
|
|
$
|
867,288
|
|
|
$
|
707,975
|
|
Wholesale (includes goodwill of $0 and $0, respectively)
|
|
248,464
|
|
|
191,976
|
|
||
DSS (includes goodwill of $4,700 and $4,700, respectively)
|
|
35,689
|
|
|
40,543
|
|
||
Corporate Services
|
|
4,991
|
|
|
5,686
|
|
||
Total Assets
|
|
$
|
1,156,432
|
|
|
$
|
946,180
|
|
|
|
|
|
|
|
|
53 weeks ended
May 2, 2020 |
|
52 weeks ended
April 27, 2019 |
|
52 weeks ended
April 28, 2018 |
||||||
Capital Expenditures
|
|
|
|
|
|
|
||||||
Retail
|
|
$
|
28,546
|
|
|
$
|
33,008
|
|
|
$
|
38,598
|
|
Wholesale
|
|
2,126
|
|
|
1,824
|
|
|
1,559
|
|
|||
DSS (a)
|
|
5,425
|
|
|
11,444
|
|
|
2,620
|
|
|||
Corporate Services
|
|
95
|
|
|
144
|
|
|
32
|
|
|||
Total Capital Expenditures
|
|
$
|
36,192
|
|
|
$
|
46,420
|
|
|
$
|
42,809
|
|
|
|
|
|
|
|
|
|
|
53 weeks ended
May 2, 2020 (a)
|
|
52 weeks ended
April 27, 2019(b)
|
|
52 weeks ended
April 28, 2018(c)
|
||||||
Sales:
|
|
|
|
|
|
|
||||||
Retail
|
|
$
|
1,712,892
|
|
|
$
|
1,889,008
|
|
|
$
|
2,024,541
|
|
Wholesale
|
|
198,353
|
|
|
223,374
|
|
|
258,369
|
|
|||
DSS
|
|
23,661
|
|
|
21,339
|
|
|
15,762
|
|
|||
Eliminations
|
|
(83,843
|
)
|
|
(99,078
|
)
|
|
(95,055
|
)
|
|||
Total Sales
|
|
$
|
1,851,063
|
|
|
$
|
2,034,643
|
|
|
$
|
2,203,617
|
|
|
|
|
|
|
|
|
||||||
Gross Profit
|
|
|
|
|
|
|
||||||
Retail
|
|
$
|
383,282
|
|
|
$
|
451,871
|
|
|
$
|
482,226
|
|
Wholesale
|
|
39,805
|
|
|
56,341
|
|
|
60,328
|
|
|||
DSS
|
|
19,313
|
|
|
20,030
|
|
|
15,403
|
|
|||
Eliminations
|
|
149
|
|
|
(516
|
)
|
|
(724
|
)
|
|||
Total Gross Profit
|
|
$
|
442,549
|
|
|
$
|
527,726
|
|
|
$
|
557,233
|
|
|
|
|
|
|
|
|
||||||
Depreciation and Amortization
|
|
|
|
|
|
|
||||||
Retail
|
|
$
|
47,099
|
|
|
$
|
51,728
|
|
|
$
|
53,955
|
|
Wholesale
|
|
5,963
|
|
|
6,014
|
|
|
6,188
|
|
|||
DSS
|
|
8,670
|
|
|
7,974
|
|
|
5,253
|
|
|||
Corporate Services
|
|
128
|
|
|
149
|
|
|
190
|
|
|||
Total Depreciation and Amortization
|
|
$
|
61,860
|
|
|
$
|
65,865
|
|
|
$
|
65,586
|
|
|
|
|
|
|
|
|
||||||
Operating Loss
|
|
|
|
|
|
|
||||||
Retail (d)
|
|
$
|
(24,445
|
)
|
|
$
|
3,751
|
|
|
$
|
(265,843
|
)
|
Wholesale (d)
|
|
12,909
|
|
|
(2,131
|
)
|
|
31,388
|
|
|||
DSS
|
|
(8,529
|
)
|
|
(3,345
|
)
|
|
226
|
|
|||
Corporate Services
|
|
(23,077
|
)
|
|
(25,463
|
)
|
|
(27,750
|
)
|
|||
Eliminations
|
|
359
|
|
|
(466
|
)
|
|
(724
|
)
|
|||
Total Operating Loss (d)
|
|
$
|
(42,783
|
)
|
|
$
|
(27,654
|
)
|
|
$
|
(262,703
|
)
|
|
|
|
|
|
|
|
||||||
The following is a reconciliation of segment Operating Loss to consolidated Income Before Income Taxes
|
|
|
|
|
|
|
||||||
Total Operating Loss
|
|
$
|
(42,783
|
)
|
|
$
|
(27,654
|
)
|
|
$
|
(262,703
|
)
|
Interest Expense, net
|
|
(7,445
|
)
|
|
(9,780
|
)
|
|
(10,306
|
)
|
|||
Total Loss Before Income Taxes
|
|
$
|
(50,228
|
)
|
|
$
|
(37,434
|
)
|
|
$
|
(273,009
|
)
|
|
|
|
|
|
|
|
(a)
|
In Fiscal 2020, our business experienced an unprecedented and significant impact as a result of COVID-19 related campus store closures (the majority of which began in mid-March). The impact of the store closures affects the comparability of our results of operations and cash flows.
|
(b)
|
We acquired PaperRater on August 21, 2018. The consolidated financial statements for the 52 weeks ended April 27, 2019 include the financial results of PaperRater from the acquisition date, August 21, 2018, to April 27, 2019.
|
(c)
|
We acquired Student Brands, LLC on August 3, 2017. The consolidated financial statements for the 52 weeks ended April 28, 2018 include the financial results of Student Brands from the acquisition date, August 3, 2017, to April 28, 2018.
|
(d)
|
In Fiscal 2019, we recorded goodwill impairment (non-cash impairment loss) of $20,538 and $28,744 in our Retail and Wholesale Segments, respectively.
|
(shares in thousands)
|
53 weeks ended
May 2, 2020 |
|
52 weeks ended
April 27, 2019 |
|
52 weeks ended
April 28, 2018 |
||||||
Numerator for basic and diluted earnings per share:
|
|
|
|
|
|
||||||
Net loss available to common shareholders
|
$
|
(38,250
|
)
|
|
$
|
(24,374
|
)
|
|
$
|
(252,566
|
)
|
|
|
|
|
|
|
||||||
Denominator for basic and diluted earnings per share:
|
|
|
|
|
|
||||||
Basic and diluted weighted average shares of Common Stock
|
48,013
|
|
|
47,306
|
|
|
46,763
|
|
|||
Loss per share of Common Stock:
|
|
|
|
|
|
||||||
Basic
|
$
|
(0.80
|
)
|
|
$
|
(0.52
|
)
|
|
$
|
(5.40
|
)
|
Diluted
|
$
|
(0.80
|
)
|
|
$
|
(0.52
|
)
|
|
$
|
(5.40
|
)
|
|
|
|
|
As of May 2, 2020
|
||||||||||
Amortizable intangible assets
|
|
Remaining
Life |
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Total
|
||||||
Customer relationships
|
|
10 - 14
|
|
$
|
271,800
|
|
|
$
|
(113,280
|
)
|
|
$
|
158,520
|
|
Content
|
|
2 - 3
|
|
19,400
|
|
|
(9,615
|
)
|
|
9,785
|
|
|||
Technology (a)
|
|
2
|
|
9,500
|
|
|
(5,900
|
)
|
|
3,600
|
|
|||
Other (b)
|
|
1 - 8
|
|
8,930
|
|
|
(5,710
|
)
|
|
3,220
|
|
|||
|
|
|
|
$
|
309,630
|
|
|
$
|
(134,505
|
)
|
|
$
|
175,125
|
|
(a)
|
Other consists of recognized intangibles for non-compete agreements and trade names.
|
|
|
|
|
As of April 27, 2019
|
||||||||||
Amortizable intangible assets
|
|
Remaining
Life
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Total
|
||||||
Customer relationships
|
|
1 - 15
|
|
$
|
271,800
|
|
|
$
|
(101,781
|
)
|
|
$
|
170,019
|
|
Content
|
|
3 - 4
|
|
19,400
|
|
|
(5,728
|
)
|
|
13,672
|
|
|||
Technology (a)
|
|
1 - 3
|
|
9,500
|
|
|
(3,883
|
)
|
|
5,617
|
|
|||
Other (b)
|
|
1 - 9
|
|
9,831
|
|
|
(4,161
|
)
|
|
5,670
|
|
|||
|
|
|
|
$
|
310,531
|
|
|
$
|
(115,553
|
)
|
|
$
|
194,978
|
|
(a)
|
See Impairment Loss (non-cash) discussion above.
|
(b)
|
Other consists of recognized intangibles for non-compete agreements, trade names, and favorable leasehold interests.
|
Aggregate Amortization Expense:
|
|
||
For the 53 weeks ended May 2, 2020
|
$
|
19,310
|
|
For the 52 weeks ended April 27, 2019
|
$
|
21,314
|
|
For the 52 weeks ended April 28, 2018
|
$
|
19,056
|
|
|
|
Estimated Amortization Expense: (Fiscal Year)
|
|
||
2021
|
$
|
17,634
|
|
2022
|
$
|
17,301
|
|
2023
|
$
|
13,923
|
|
2024
|
$
|
12,060
|
|
2025
|
$
|
11,700
|
|
After 2025
|
$
|
102,507
|
|
Balance at April 29, 2018
|
|
$
|
49,282
|
|
Goodwill related to PaperRater acquisition
|
|
4,700
|
|
|
Impairment loss (non-cash) (a)
|
|
(49,282
|
)
|
|
Balance at both April 27, 2019 and May 2, 2020
|
|
$
|
4,700
|
|
(a)
|
See Impairment Loss (non-cash) discussion above.
|
|
|
Restricted Stock Awards
|
|
Restricted Stock Units
|
|
Performance Shares
|
|
Performance Share Units
|
||||||||||||||||||||
|
|
Number of
Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|
Number of
Shares
|
|
Weighted
Average
Grant Date Fair Value
|
|
Number of
Shares |
|
Weighted
Average Grant Date Fair Value |
|
Number of
Shares |
|
Weighted
Average Grant Date Fair Value |
||||||||||||
Balance,
April 29, 2017
|
|
12,371
|
|
|
$
|
9.70
|
|
|
1,731,623
|
|
|
$
|
10.70
|
|
|
406,078
|
|
|
$
|
9.52
|
|
|
—
|
|
|
$
|
—
|
|
Granted
|
|
19,704
|
|
|
$
|
6.09
|
|
|
1,640,926
|
|
|
$
|
5.88
|
|
|
—
|
|
|
$
|
—
|
|
|
537,756
|
|
|
$
|
7.90
|
|
Vested
|
|
(12,371
|
)
|
|
$
|
9.70
|
|
|
(697,370
|
)
|
|
$
|
10.93
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Forfeited (a)
|
|
—
|
|
|
$
|
—
|
|
|
(355,055
|
)
|
|
$
|
9.04
|
|
|
(120,142
|
)
|
|
$
|
9.52
|
|
|
—
|
|
|
$
|
—
|
|
Balance,
April 28, 2018
|
|
19,704
|
|
|
$
|
6.09
|
|
|
2,320,124
|
|
|
$
|
7.47
|
|
|
285,936
|
|
|
$
|
9.52
|
|
|
537,756
|
|
|
$
|
7.90
|
|
Granted
|
|
21,506
|
|
|
$
|
5.58
|
|
|
1,443,746
|
|
|
$
|
5.58
|
|
|
—
|
|
|
$
|
—
|
|
|
385,171
|
|
|
$
|
4.18
|
|
Vested
|
|
(19,704
|
)
|
|
$
|
6.09
|
|
|
(1,056,486
|
)
|
|
$
|
8.31
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Forfeited (a)
|
|
—
|
|
|
$
|
—
|
|
|
(355,067
|
)
|
|
$
|
6.23
|
|
|
(60,425
|
)
|
|
$
|
9.52
|
|
|
(157,028
|
)
|
|
$
|
6.83
|
|
Balance,
April 27, 2019 |
|
21,506
|
|
|
$
|
5.58
|
|
|
2,352,317
|
|
|
$
|
6.12
|
|
|
225,511
|
|
|
$
|
9.52
|
|
|
765,899
|
|
|
$
|
6.25
|
|
Granted
|
|
38,096
|
|
|
$
|
3.15
|
|
|
1,541,154
|
|
|
$
|
3.08
|
|
|
—
|
|
|
$
|
—
|
|
|
709,517
|
|
|
$
|
2.23
|
|
Vested
|
|
(21,506
|
)
|
|
$
|
5.58
|
|
|
(1,138,984
|
)
|
|
$
|
6.56
|
|
|
(56,380
|
)
|
|
$
|
9.52
|
|
|
—
|
|
|
$
|
—
|
|
Forfeited (a)
|
|
—
|
|
|
$
|
—
|
|
|
(504,409
|
)
|
|
$
|
4.69
|
|
|
(169,131
|
)
|
|
$
|
9.52
|
|
|
(151,649
|
)
|
|
$
|
5.31
|
|
Balance,
May 2, 2020
|
|
38,096
|
|
|
$
|
3.15
|
|
|
2,250,078
|
|
|
$
|
4.21
|
|
|
—
|
|
|
$
|
—
|
|
|
1,323,767
|
|
|
$
|
4.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
53 weeks ended
May 2, 2020 |
|
52 weeks ended
April 27, 2019 |
|
52 weeks ended
April 28, 2018 |
||||||
Restricted Stock Expense
|
$
|
120
|
|
|
$
|
110
|
|
|
$
|
120
|
|
Restricted Stock Units Expense
|
6,253
|
|
|
7,846
|
|
|
8,370
|
|
|||
Performance Shares Expense (a)
|
12
|
|
|
87
|
|
|
(218
|
)
|
|||
Performance Share Units Expense (a)
|
253
|
|
|
974
|
|
|
187
|
|
|||
Stock-Based Compensation Expense
|
$
|
6,638
|
|
|
$
|
9,017
|
|
|
$
|
8,459
|
|
(a)
|
Stock-based compensation expense reflects cumulative adjustments to reflect changes to the expected level of achievement of the respective grants.
|
|
|
Fiscal 2020
|
|
Fiscal 2019
|
|
Fiscal 2018
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Federal (a)
|
|
$
|
(5,471
|
)
|
|
$
|
(6,494
|
)
|
|
$
|
(8,089
|
)
|
State
|
|
(1,127
|
)
|
|
(2,035
|
)
|
|
2,410
|
|
|||
Total Current
|
|
(6,598
|
)
|
|
(8,529
|
)
|
|
(5,679
|
)
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Federal (a)
|
|
(4,086
|
)
|
|
(3,681
|
)
|
|
(13,250
|
)
|
|||
State
|
|
(1,294
|
)
|
|
(850
|
)
|
|
(1,514
|
)
|
|||
Total Deferred
|
|
(5,380
|
)
|
|
(4,531
|
)
|
|
(14,764
|
)
|
|||
Total
|
|
$
|
(11,978
|
)
|
|
$
|
(13,060
|
)
|
|
$
|
(20,443
|
)
|
(a)
|
For Fiscal 2018, the income tax benefit was caused largely by the revaluation due to the change in the U.S. corporate income tax rate from 35% to 21% as described above.
|
|
|
Fiscal 2020
|
|
Fiscal 2019
|
|
Fiscal 2018
|
|||
Federal statutory income tax rate (a)
|
|
21.0
|
%
|
|
21.0
|
%
|
|
34.1
|
%
|
State income taxes, net of federal income tax benefit
|
|
3.7
|
|
|
6.3
|
|
|
(0.3
|
)
|
Permanent book / tax differences
|
|
(2.9
|
)
|
|
(3.9
|
)
|
|
(0.7
|
)
|
Goodwill impairment
|
|
—
|
|
|
—
|
|
|
(34.2
|
)
|
Provisional remeasurement due to Tax Legislation
|
|
—
|
|
|
10.4
|
|
|
7.5
|
|
Credits
|
|
0.5
|
|
|
0.3
|
|
|
0.2
|
|
Other, net
|
|
1.5
|
|
|
0.8
|
|
|
0.9
|
|
Effective income tax rate
|
|
23.8
|
%
|
|
34.9
|
%
|
|
7.5
|
%
|
(a)
|
Due to the Act, we applied a U.S. statutory federal income tax rate of 33.9% for earnings between April 30, 2017 and January 27, 2018, and 21% for earnings between January 28, 2018 and April 28, 2018. The result is an effective statutory rate of 34.1% for Fiscal 2018.
|
|
|
As of
|
||||||
|
|
5/2/2020
|
|
4/27/2019
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Estimated accrued liabilities
|
|
$
|
11,046
|
|
|
$
|
10,972
|
|
Inventory
|
|
7,167
|
|
|
2,969
|
|
||
Stock-based compensation
|
|
1,511
|
|
|
1,738
|
|
||
Insurance liability
|
|
528
|
|
|
518
|
|
||
Operating lease liabilities
|
|
65,334
|
|
|
982
|
|
||
Tax credits
|
|
484
|
|
|
402
|
|
||
Goodwill
|
|
18,438
|
|
|
19,903
|
|
||
Net operating losses
|
|
4,992
|
|
|
4,928
|
|
||
Other
|
|
8,853
|
|
|
8,253
|
|
||
Gross deferred tax assets
|
|
118,353
|
|
|
50,665
|
|
||
Valuation allowance
|
|
(1,231
|
)
|
|
(1,194
|
)
|
||
Net deferred tax assets
|
|
117,122
|
|
|
49,471
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Intangible asset amortization
|
|
(37,864
|
)
|
|
(40,790
|
)
|
||
Operating lease right-of-use assets
|
|
(64,695
|
)
|
|
—
|
|
||
Property and equipment
|
|
(6,758
|
)
|
|
(6,256
|
)
|
||
Gross deferred tax liabilities
|
|
(109,317
|
)
|
|
(47,046
|
)
|
||
Net deferred tax asset
|
|
$
|
7,805
|
|
|
$
|
2,425
|
|
Balance at April 29, 2017
|
$
|
86
|
|
Additions for tax positions of the current period
|
25
|
|
|
Additions for tax positions of prior periods
|
2
|
|
|
Reductions due to settlements
|
—
|
|
|
Other reductions for tax positions of prior periods
|
(16
|
)
|
|
Balance at April 28, 2018
|
$
|
97
|
|
Additions for tax positions of the current period
|
—
|
|
|
Additions for tax positions of prior periods
|
—
|
|
|
Reductions due to settlements
|
—
|
|
|
Other reductions for tax positions of prior periods
|
(6
|
)
|
|
Balance at April 27, 2019
|
$
|
91
|
|
Additions for tax positions of the current period
|
—
|
|
|
Additions for tax positions of prior periods
|
—
|
|
|
Reductions due to settlements
|
—
|
|
|
Other reductions for tax positions of prior periods
|
(39
|
)
|
|
Balance at May 2, 2020
|
$
|
52
|
|
|
|
|
|
Fiscal 2019
|
|
Fiscal 2018
|
||||
Minimum contract expense
|
|
$
|
169,131
|
|
|
$
|
170,351
|
|
Percentage contract expense
|
|
73,368
|
|
|
80,630
|
|
||
Total expense
|
|
$
|
242,499
|
|
|
$
|
250,981
|
|
Fiscal 2020 Quarterly Period Ended
|
|
13 weeks ended
July 27, 2019
|
|
13 weeks ended
October 26, 2019
|
|
13 weeks ended
January 25, 2020
|
|
14 weeks ended
May 2, 2020 (a)
|
|
53 weeks ended
May 2, 2020
|
||||||||||
Sales
|
|
$
|
319,657
|
|
|
$
|
772,228
|
|
|
$
|
502,292
|
|
|
$
|
256,886
|
|
|
$
|
1,851,063
|
|
Gross profit
|
|
$
|
71,657
|
|
|
$
|
186,950
|
|
|
$
|
118,535
|
|
|
$
|
65,407
|
|
|
$
|
442,549
|
|
Net (loss) income
|
|
$
|
(32,155
|
)
|
|
$
|
35,931
|
|
|
$
|
(1,693
|
)
|
|
$
|
(40,333
|
)
|
|
$
|
(38,250
|
)
|
Basic (loss) earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net (loss) income
|
|
$
|
(0.68
|
)
|
|
$
|
0.75
|
|
|
$
|
(0.04
|
)
|
|
$
|
(0.84
|
)
|
|
$
|
(0.80
|
)
|
Diluted (loss) earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net (loss) income
|
|
$
|
(0.68
|
)
|
|
$
|
0.74
|
|
|
$
|
(0.04
|
)
|
|
$
|
(0.84
|
)
|
|
$
|
(0.80
|
)
|
Fiscal 2019 Quarterly Period Ended
|
|
13 weeks ended
July 28, 2018
|
|
13 weeks ended
October 27, 2018
|
|
13 weeks ended
January 26, 2019
|
|
13 weeks ended
April 27, 2019
|
|
52 weeks ended
April 27, 2019
|
||||||||||
Sales
|
|
$
|
337,484
|
|
|
$
|
814,766
|
|
|
$
|
548,008
|
|
|
$
|
334,385
|
|
|
$
|
2,034,643
|
|
Gross profit
|
|
$
|
66,610
|
|
|
$
|
210,760
|
|
|
$
|
132,953
|
|
|
$
|
117,403
|
|
|
$
|
527,726
|
|
Net (loss) income
|
|
$
|
(38,622
|
)
|
|
$
|
59,697
|
|
|
$
|
769
|
|
|
$
|
(46,218
|
)
|
|
$
|
(24,374
|
)
|
Basic (loss) earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net (loss) income
|
|
$
|
(0.82
|
)
|
|
$
|
1.26
|
|
|
$
|
0.02
|
|
|
$
|
(0.97
|
)
|
|
$
|
(0.52
|
)
|
Diluted (loss) earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net (loss) income
|
|
$
|
(0.82
|
)
|
|
$
|
1.25
|
|
|
$
|
0.02
|
|
|
$
|
(0.97
|
)
|
|
$
|
(0.52
|
)
|
|
|
Balance at
beginning
of period
|
|
Charge
(recovery) to
costs and
expenses
|
|
Write-offs
|
|
Balance at
end
of period
|
||||||||
Allowance for Doubtful Accounts
|
|
|
|
|
|
|
|
|
||||||||
May 2, 2020
|
|
$
|
2,135
|
|
|
$
|
1,710
|
|
|
$
|
(1,859
|
)
|
|
$
|
1,986
|
|
April 27, 2019
|
|
$
|
2,083
|
|
|
$
|
2,670
|
|
|
$
|
(2,618
|
)
|
|
$
|
2,135
|
|
April 28, 2018
|
|
$
|
2,259
|
|
|
$
|
3,518
|
|
|
$
|
(3,694
|
)
|
|
$
|
2,083
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Balance at
beginning
of period
|
|
Addition
Charged to
Costs
|
|
Deductions
|
|
Balance at
end
of period
|
||||||||
Sales Returns Reserves
|
|
|
|
|
|
|
|
|
||||||||
May 2, 2020
|
|
$
|
5,282
|
|
|
$
|
186,305
|
|
|
$
|
(186,524
|
)
|
|
$
|
5,063
|
|
April 27, 2019
|
|
$
|
5,229
|
|
|
$
|
197,799
|
|
|
$
|
(197,746
|
)
|
|
$
|
5,282
|
|
April 28, 2018
|
|
$
|
6,817
|
|
|
$
|
170,469
|
|
|
$
|
(172,057
|
)
|
|
$
|
5,229
|
|
Item 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
Plan Category
|
|
Number of
securities to be
issued upon exercise
of outstanding
options, warrants
and rights
|
|
Weighted-average
exercise price of
outstanding options,
warrants and rights
|
|
Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
in column (a))
|
||||
|
|
(a)
|
|
(b)
|
|
(c)
|
||||
Equity compensation plans approved by security holders
|
|
3,611,941
|
|
|
$
|
4.19
|
|
|
2,493,276
|
|
Equity compensation plans not approved by security holders
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
Total
|
|
3,611,941
|
|
|
$
|
4.19
|
|
|
2,493,276
|
|
1.
|
Consolidated Financial Statements of Barnes & Noble Education, Inc.:
|
2.
|
Financial Statement Schedules of Barnes & Noble Education, Inc.:
|
3.
|
Exhibits:
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
Other.
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
BARNES & NOBLE EDUCATION, INC.
|
||
(Registrant)
|
||
|
|
|
By:
|
|
/s/ Michael P. Huseby
|
|
|
Michael P. Huseby
|
|
|
Chairman and Chief Executive Officer
|
|
|
|
Date: July 14, 2020
|
|
|
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Michael P. Huseby
|
|
Chairman and Chief Executive Officer and Director
(Principal Executive Officer) |
|
July 14, 2020
|
Michael P. Huseby
|
||||
|
|
|
|
|
/s/ Thomas D. Donohue
|
|
Chief Financial Officer
(Principal Financial Officer)
|
|
July 14, 2020
|
Thomas D. Donohue
|
||||
|
|
|
||
/s/ Seema C. Paul
|
|
Chief Accounting Officer
(Principal Accounting Officer)
|
|
July 14, 2020
|
Seema C. Paul
|
||||
|
|
|
|
|
/s/ Emily C. Chiu
|
|
Director
|
|
July 14, 2020
|
Emily C. Chiu
|
||||
|
|
|
|
|
/s/ Daniel A. DeMatteo
|
|
Director
|
|
July 14, 2020
|
Daniel A. DeMatteo
|
||||
|
|
|
|
|
/s/ David G. Golden
|
|
Director
|
|
July 14, 2020
|
David G. Golden
|
||||
|
|
|
|
|
/s/ John R. Ryan
|
|
Director
|
|
July 14, 2020
|
John R. Ryan
|
||||
|
|
|
|
|
/s/ Jerry Sue Thornton
|
|
Director
|
|
July 14, 2020
|
Jerry Sue Thornton
|
||||
|
|
|
||
/s/ David A. Wilson
|
|
Director
|
|
July 14, 2020
|
David A. Wilson
|
By:
|
/s/ Michael C. Miller
Name: Michael C. Miller Title: Chief Legal Officer and Executive |
By:
|
/s/ Cosmo Zagare
Name: Cosmo Zagare Title: Vice President, Client Services |
1.
|
B&N Education, LLC, a Delaware limited liability company
|
2.
|
Barnes & Noble College Booksellers, LLC, a Delaware limited liability company
|
3.
|
BNED Digital Holdings, LLC, a Delaware limited liability company
|
4.
|
BNED LoudCloud, LLC, a Delaware limited liability company
|
5.
|
BNED MBS Holdings, LLC, a Delaware limited liability company
|
6.
|
Cram LLC, a Delaware limited liability company
|
7.
|
Educate Ahora LLC, a Delaware limited liability company
|
8.
|
Edúcate Ahora México, S. de R.L. de C.V., a Mexican company
|
9.
|
Etudier Facile LLC, a Delaware limited liability company
|
10.
|
LoudCloud Systems Private Limited, an Indian subsidiary
|
11.
|
MBS Automation LLC, a Delaware limited liability company
|
12.
|
MBS Direct, LLC, a Delaware limited liability company
|
13.
|
MBS Internet, LLC, a Delaware limited liability company
|
14.
|
MBS Service Company LLC, a Delaware limited liability company
|
15.
|
MBS Textbook Exchange, LLC, a Delaware limited liability company
|
16.
|
PaperRater, LLC, a Delaware limited liability company
|
17.
|
Promoversity LLC, a Delaware limited liability company
|
18.
|
Student Brands, LLC, a Delaware limited liability company
|
19.
|
Study Mode LLC, a California limited liability company
|
20.
|
Studymode Technologies Private Limited, an Indian company
|
21.
|
TextbookCenter LLC, a Delaware limited liability company
|
22.
|
Trabalhos Feitos, LLC, a Delaware limited liability company
|
23.
|
TXTB.com LLC, a Delaware limited liability company
|
24.
|
Worldwide Knowledge LLC, a Delaware limited liability company
|
(i)
|
Registration Statement (Form S-8 No. 333-227515), which relates to the Barnes & Noble Education, Inc. Amended and Restated Equity Incentive Plan,
|
(ii)
|
Registration Statement (Form S-8 No. 333-206893) and Registration Statement (Form S-8 No. 333-213673) each of which relates to the Barnes & Noble Education, Inc. Equity Incentive Plan;
|
1.
|
I have reviewed this Annual Report on Form 10-K of Barnes & Noble Education, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
By:
|
|
/s/ Michael P. Huseby
|
|
|
|
|
Michael P. Huseby
|
|
|
|
|
Chairman & Chief Executive Officer
|
|
|
|
|
Barnes & Noble Education, Inc.
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of Barnes & Noble Education, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
By:
|
|
/s/ Thomas D. Donohue
|
|
|
|
|
Thomas D. Donohue
|
|
|
|
|
Executive Vice President, Chief Financial Officer
|
|
|
|
|
Barnes & Noble Education, Inc.
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Michael P. Huseby
|
|
|
Michael P. Huseby
|
|
|
Chairman & Chief Executive Officer
Barnes & Noble Education, Inc.
|
|
|
|
|
|
July 14, 2020
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Thomas D. Donohue
|
|
|
Thomas D. Donohue
|
|
|
Executive Vice President, Chief Financial Officer
Barnes & Noble Education, Inc.
|
|
|
|
|
|
July 14, 2020
|
|