|
|
||
|
|
|
|
|
|||
 |
|
 |
News NBC Acquisition Corp. Reports Record Fiscal Year Despite Recession Lincoln, Nebraska NBC Acquisition Corp., the parent company of Nebraska Book Company Inc., today announced results for its fiscal year ended March 31, 2009. For the fiscal year, consolidated revenues were a record $610.7 million, up $29.5 million from $581.2 million in the fiscal year ended March 31, 2008. Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, Amortization and Goodwill Impairment) for the 2009 fiscal year were a record $71.0 million, up $1.1 million from the prior fiscal year despite the economic recession affecting many companies with retail operations. After adding back non-cash charges related to the Company's stock compensation plans, non recurring costs of severance and an early retirement program and certain legal charges, Adjusted EBITDA for fiscal 2009 was $73.7 million, an increase of $2.7 million or 3.8% over the prior fiscal year. For fiscal year 2009, the Company recognized a non-cash charge of $107.0 million to write down the value of its goodwill intangible asset. Due to that charge, the Company recognized a net loss for the year of $100.5 million. Mark Oppegard, Chief Executive Officer, Nebraska Book Company said, "We are pleased with our fiscal 2009 results as we continue to grow our top and EBITDA-based bottom line even in the face of a very difficult economic climate. Despite those improved operating results, the current recession and decline in the public equity markets have contributed to lower current market multiples for valuing many types of assets, including our company. Based primarily on those lower multiples, we recognized a non-cash charge in our income statement related to goodwill impairment. While accounting conventions require that charge, we believe our business model has held up well - as evidenced by our record revenue and EBITDA and we're looking forward to continuing the long history of growth for Nebraska Book Company." The Company's record revenues included $472.0 million from the College Bookstore division (up 3.9%), $147.3 million from the Textbook division (up 5.4%), and $34.2 million from the Complementary Services division (down 0.4%). Such revenues include inter-company revenues of $42.8 million. Revenues in the College Bookstore division increased due primarily to acquisitions as same store sales for the year ended March 31, 2009 decreased 2.1%. Revenues in the Textbook division increased due to price increases and lower returns which were offset partially by a small decrease in units sold. Revenues in the Complementary Services division were comparable with the prior year in most of the divisions businesses. Consolidated gross profit was a record $239.3 million for the fiscal year ended March 31, 2009, an increase of $12.2 million or 5.4% over the prior fiscal year. Gross margin was 39.2% for the 2009 fiscal year, a small increase from the prior fiscal year gross margin due primarily to improved margins in the Textbook division offset by slightly lower gross margins in the College Bookstore division. Total operating expenses were $294.3 million in fiscal 2009. Total operating expenses excluding the goodwill impairment charge were $187.3 million in fiscal 2009, an increase of $12.5 million over the prior fiscal year of $174.8 million. The increase in operating expenses was primarily due to continued growth of the Company, especially in the College Bookstore division. That growth prompted increases of $4.9 million in personnel costs (including a non-recurring charge of $1.1 million for severance and payments under a voluntary early retirement program), $3.6 million in rent expense, $1.5 million in shipping and commission expense and $1.3 million in depreciation and amortization expense. Also included in the increase in operating expenses were $0.2 million in legal expenses related to the Company's amendment of its Senior Credit Facility in February 2009. Net interest expense was $41.3 million, an increase of $0.8 million compared to the prior fiscal year. The increase was primarily due to decreased interest income earned on temporarily invested funds during the year. Adjusted EBITDA (excluding corporate costs) for each of the Company's operating divisions in fiscal year 2009 was $44.0 million in the College Bookstore division, a decrease of $1.9 million or 4.2% compared to the prior fiscal year, $39.0 million in the Textbook division, an increase of $5.3 million or 15.6% over the prior fiscal year, and $1.3 million in the Complementary Services division, a decrease of $0.2 million compared to the prior fiscal year. The decrease in the College Bookstore division was primarily due to lower same store sales in a difficult retail environment combined with rising rental costs as a percentage of revenue. The increase in Adjusted EBITDA in the Textbook division was primarily due to increasing prices combined with relatively stable used textbook acquisition costs. At March 31, 2009, the Company was operating 277 locations around the country. The Company announced that during the 4th quarter of the fiscal year and subsequent to year end it agreed to contract manage or made plans to open bookstores at 11 more locations across the country with revenues expected to be over $15 million on a full year basis. The Company also indicated that during the 4th quarter and subsequent to year end it has closed, lost or resigned from, the operations of 14 bookstores, with revenues of approximately $13 million in fiscal 2009. Lastly, the Company indicated that it implemented a number of cost-saving initiatives late in fiscal 2009, including actions taken in connection with the severance and voluntary retirement program expenses noted earlier, and it expects those initiatives to save over $8 million during fiscal 2010.
Adjusted EBITDA for the years ended March 31, 2009 and 2008 and the corresponding change in Adjusted EBITDA were as follows:
As the Company is highly-leveraged and its equity is not publicly-traded, it believes that the non-GAAP financial measures EBITDA and Adjusted EBITDA are useful in measuring its liquidity and provides additional information for determining its ability to meet debt service requirements. The Senior Subordinated Notes, Senior Discount Notes, and Senior Credit Facility also utilize EBITDA, as defined in those agreements, for certain financial covenants. EBITDA and Adjusted EBITDA do not represent and should not be considered as alternatives to net cash flows from operating activities as determined by GAAP, and EBITDA and Adjusted EBITDA do not necessarily indicate whether cash flows will be sufficient for cash requirements. Items excluded from EBITDA and Adjusted EBITDA, such as interest, taxes, depreciation and amortization, and goodwill impairment are significant components in understanding and assessing the Company's financial performance. EBITDA and Adjusted EBITDA measures presented here may not be comparable to similarly titled measures presented by other companies. The following presentation reconciles Adjusted EBITDA with net cash flows from operating activities and also sets forth net cash flows from investing and financing activities:
Please note that this press release, including the reconciliation of the differences between net cash flows and Adjusted EBITDA can also be found on the "Financial Information" page of the Company's corporate web site at http://www.nebook.com/our_company/financial.asp. NBC Acquisition Corp.'s financial results conference call will be Tuesday, June 16th at 9:00 a.m. central time (10:00 a.m. eastern). Participants will be Mark Oppegard, Chief Executive Officer, Barry Major, President and Chief Operating Officer, and Alan Siemek, Chief Financial Officer. The call can be accessed by calling 800 230-1074. A replay of the call will be available from 11:00 a.m. central time on June 16th, 2009 until 11:59 p.m. central time on June 23rd, 2009 by calling 800 475-6701 in the U.S. The access code is 104100. About Nebraska Book Company "Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995 Media Contact: |
|
|
 |
|
 |
 |
 |
 |
