BASKING RIDGE, N.J., Dec. 09, 2024 (GLOBE NEWSWIRE) — Barnes & Noble Education, Inc. (NYSE: BNED), a leading solutions provider for the education industry, today reported sales and earnings for the second quarter ended on October 26, 2024. The following figures are GAAP results from continuing operations on a consolidated basis, unless noted otherwise. Note that Adjusted EBITDA is a non-GAAP calculation. Full quarterly financial tables and a reconciliation of non-GAAP measures to the most applicable GAAP measures can be found in the Investor Relations section of BNED’s website at https://investors.bned.com and its Current Report on Form 8-K filed with the SEC on the date of this release.
Barnes & Noble Education is a highly seasonal business, and the second quarter is the most significant quarter from a revenue perspective because it includes a majority of the fall back-to-school period.
Second quarter fiscal year 2025 total revenue decreased by $(8.3) million, or -1.4%, from last year to $602.1 million, primarily driven by a net decrease of 109 physical and virtual locations, many of which were closures of underperforming stores, which has helped to improve profitability. Gross Comparable Store Sales increased by $24.4 million, or 3.8%, during the quarter, helping to offset much of the decline from closed stores.
Revenues from BNC First Day® programs increased by $36.2 million, or ∼18%, as First Day® Complete continues to see rapid growth in institutional adoption, with a total of 183 campus stores utilizing First Day Complete in the fall 2024 term with a total enrollment of approximately 925,000* undergraduate and graduate students, up from 800,000 in the prior year.
Overall net income doubled, increasing by $24.9 million, or 100.1%, to $49.7 million, compared to $24.9 million in the prior year, due to improved operating income, lower interest expense, and reduced restructuring and other charges. Adjusted EBITDA improved by $14.9 million, or 29.1%, to $66.0 million from $51.1 million last year, primarily due to lower selling and administrative expenses of $13.0 million as the result of cost-saving and productivity initiatives and closed stores.
Year-to-date fiscal year 2025 net loss was $(49.7) million, inclusive of a $55.2 million non-cash loss on extinguishment of debt, compared to a net loss of $(25.1) million in the prior year. Adjusted EBITDA improved by $20.1 million, or 79.7%, to $45.3 million from $25.2 million last year. Notably, interest costs were $5.8 million lower than a year ago due to materially lower borrowings under our bank ABL agreement.
Jonathan Shar, CEO, noted, “Our second-quarter performance during the pivotal fall back-to-school season underscores the exciting progress we’re making in our business transformation. Strong adoption of our First Day affordable access programs, exceptional retail execution supporting our client institutions, and a disciplined focus on operational efficiency are reflected in our outstanding results. We are confident in our improving momentum and the opportunities ahead.”
Barnes & Noble Education is focused on driving material improvements in its profitability and further improving its already strong financial foundation. Management is working on simplifying its operations to better focus on its core physical and virtual bookstore businesses. Go-forward savings from recently completed and in-progress initiatives are now estimated at over $20 million.
The Company recently completed a $40 million At-the-Market sales agreement with BTIG, LLC. The proceeds of this capital raise will reduce go-forward annual interest expense by nearly $4 million per year, reduce risk, accelerate our ability to win new customers, and enhance our strategic and balance sheet optionality. In the medium-term, management is seeking to reduce annual interest expenses to around $10 million or less.
The Company’s budget goals continue to target a material improvement in fiscal year 2025 GAAP operating results and Adjusted EBITDA versus last year. Based on current estimates of capital expenditures and significantly reduced interest costs from last fiscal year, BNED believes it can drive meaningful operating free cash flow, which will be used to further de-lever its balance sheet.
* Total undergraduate and graduate student enrollment as reported by National Center for Education Statistics (NCES) as of January 16, 2024.
ABOUT BARNES & NOBLE EDUCATION, INC.
Barnes & Noble Education, Inc. (NYSE: BNED) is a leading solutions provider for the education industry, driving affordability, access and achievement at hundreds of academic institutions nationwide and ensuring millions of students are equipped for success in the classroom and beyond. Through its family of brands, BNED offers campus retail services and academic solutions, wholesale capabilities and more. BNED is a company serving all who work to elevate their lives through education, supporting students, faculty and institutions as they make tomorrow a better and smarter world. For more information, visit www.bned.com.
