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New York, NY (August 20, 1998) - Barnes & Noble, Inc. (NYSE: BKS), the
world's largest bookseller, today announced total revenues of $675.0
million for its second quarter ended August 1, 1998, up 9.3 percent from
$617.7 million a year ago. Barnes & Noble store revenues increased 11.1
percent to $557.1 million from $501.4 million.
For the second quarter, Barnes & Noble comparable store sales rose 5.0
percent and comparable store sales for B. Dalton declined (1.2) percent.
barnesandnoble.com's revenues for the quarter rose to $12.5 million, an
increase of 470 percent over revenues of $2.2 million for the second
quarter of 1997 and a 33 percent increase from $9.4 million for the first
quarter of 1998.
The company's retail business reported a second quarter operating profit of
$19.6 million, up 103 percent from $9.7 million during the same period last
year, and net earnings of $7.9 million or $0.12 per share, up from
break-even in the second quarter of 1997. barnesandnoble.com had a net loss
of ($13.6) million or ($0.20) per share for the second quarter of 1998. The
company's consolidated net loss for the quarter was ($5.7) million, or
($0.08) per share (based on 68.4 million shares), as compared with the
year-ago second quarter net loss of ($1.4) million, or ($0.02) per share
(based on 66.8 million shares).
As of August 1, 1998, inventories increased 12.0 percent to $821.3 million
from $733.3 million as of August 2, 1997. This increase is in line with the
company's 9.3 percent revenue growth and the increase in its distribution
center standing inventory to over 650,000 different titles available for
shipping within 24 hours to both online customers and the retail store
network.
As of August 1, 1998, barnesandnoble.com had more than 720,000 customers in
175 countries, an increase of 44 percent from 500,000 customers in 158
countries as of May 2, 1998. Revenues derived from repeat customers
represented approximately 50 percent of second quarter revenues. The site's
"Affiliate Network" grew to over 17,000 sites and includes strategic
partnerships with many of the top twenty Web sites, such as Microsoft,
Lycos, Tripod and ZDNet, as well as an exclusive relationship with AOL's
proprietary online services.
Barnes & Noble, Inc. also announced that within the next 30 days, a
registration statement will be filed with the SEC for an initial public
offering of barnesandnoble.com stock, which offering will be made only by
means of a prospectus. The company said that the registration is subject to
market conditions.
As of August 1, 1998, the company operated 489 Barnes & Noble stores and
510 B. Dalton stores. During the second quarter, nine Barnes & Noble stores
were opened and one closed. B. Dalton closed ten stores during the quarter.
Barnes & Noble stores stock an authoritative selection of more than 175,000
titles and offer books from more than 27,000 publishers with an emphasis on
small, independent publishers and university presses. Barnes & Noble is the
world's largest bookseller on the World Wide Web
(http://www.barnesandnoble.com), and the exclusive bookseller on America
Online (Keyword: bn). The company also publishes books under the Barnes &
Noble imprint for exclusive sale through its retail stores, mail-order
catalogs, and Web site.
General financial information on Barnes & Noble, Inc. can be obtained via
the Internet by visiting the company's investor relations Web site:
shareholder.com.
This release may contain certain forward-looking statements. Factors that
could cause actual results to differ materially from any forward-looking
statements contained in this release can be found in the company's 1997
annual report. Any forward-looking statements contained in this release are
expressly qualified by the cautionary statements contained in the company's
1997 annual report.
- # # # -
(SEE ATTACHED TABLES)
Barnes & Noble, Inc. and Subsidiaries
Consolidated Statements of Operations
(thousands of dollars, except per share data)
(unaudited)
13 Weeks Ended 26 Weeks Ended
August 1, August 2, August 1, August 2,
1998 1997 1998 1997
Revenues $ 675,009 617,748 1,341,353 1,213,479
Cost of sales and
occupancy 492,726 458,935 984,840 907,152
Gross profit 182,283 158,813 356,513 306,327
Selling and administrative
expenses 160,558 129,079 310,166 251,890
Depreciation and
amortization 22,838 18,926 44,761 36,673
Pre-opening expenses 2,280 3,367 4,884 7,221
Operating profit
(loss) (3,393) 7,441 (3,298) 10,543
Interest expense, net 6,289 9,756 12,039 19,404
Benefit for income taxes (3,973) (949) (6,293) (3,634)
Net loss $ (5,709) (1,366) (9,044) (5,227)
Net loss per common share:
Basic $ (0.08) (0.02) (0.13) (0.08)
Diluted $ (0.08) (0.02) (0.13) (0.08)
Weighted average common
shares outstanding
Basic 68,354,000 66,820,000 68,227,000 66,630,000
Diluted 68,354,000 66,820,000 68,227,000 66,630,000
Percentage of Revenues:
Revenues 100.0% 100.0% 100.0% 100.0%
Cost of sales and
occupancy 73.0 74.3 73.4 74.8
Gross margin 27.0 25.7 26.6 25.2
Selling and administrative
expenses 23.8 20.9 23.1 20.7
Depreciation and
amortization 3.4 3.1 3.4 3.0
Pre-opening expenses 0.3 0.5 0.4 0.6
Operating margin (0.5) 1.2 (0.3) 0.9
Interest expense, net 0.9 1.6 0.9 1.6
Benefit for income taxes (0.6) (0.2) (0.5) (0.3)
Net loss (0.8)% (0.2)% (0.7)% (0.4)%
Note: Certain reclassifications of prior year balances have been made
to conform to the 1998 presentation.
BARNES & NOBLE, INC. AND SUBSIDIARIES
Selected Segment Information
(thousands of dollars, except per share data)
(unaudited)
13 Weeks Ended 26 Weeks Ended
August 1, August 2, August 1, August 2,
1998 1997 1998 1997
Barnes & Noble
Retail Business
Revenues $ 662,507 615,555 1,319,483 1,211,096
Operating profit $ 19,610 9,678 33,308 13,034
Basic Earnings(loss)
per share 0.12 0.00 0.19 (0.06)
barnes@noble.com
Revenues $ 12,502 2,193 21,870 2,383
Operating loss $ (23,003) (2,237) (36,606) (2,491)
Basic loss per share $ (0.20) (0.02) (0.32) (0.02)
Consolidated Barnes
& Noble, Inc. and
Subsidiaries
Revenues $ 675,009 617,748 1,341,353 1,213,479
Operating
profit (loss) $ (3,393) 7,441 (3,298) 10,543
Basic loss per
share $ (0.08) (0.02) (0.13) (0.08)
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