ANN ARBOR, Mich., Nov. 24 /PRNewswire-FirstCall/ -- Borders Group,
Inc. (NYSE:BGP) today reported results for the fiscal third quarter
of 2009, ended Oct. 31, 2009. (Logo:
http://www.newscom.com/cgi-bin/prnh/20060208/BORDERSGRPLOGO )
Following are highlights of third quarter results, compared to the
same period a year ago, unless specifically noted as year-to-date
results: -- On an operating basis, the company generated a loss
from continuing operations of $39.0 million or $0.65 per share
compared to a loss of $39.0 million or $0.64 per share a year ago.
On a GAAP basis, the loss from continuing operations was $38.5
million or $0.64 per share compared to a loss of $172.2 million or
$2.85 per share a year ago. The $0.64 per share loss includes
income of $0.01 per share of non-operating adjustments that were
primarily non-cash. Year to date, on an operating basis, the
company generated a loss from continuing operations of $67.6
million or $1.12 per share compared to a loss of $80.0 million or
$1.33 per share a year ago. On a GAAP basis, the year-to-date loss
from continuing operations was $170.1 million or $2.83 per share
compared to a loss of $213.6 million or $3.55 per share a year ago.
The $2.83 per share loss includes $1.71 per share of non-operating
charges that were primarily non-cash. -- Adjusted EBITDA was a loss
of $34.2 million compared to a loss of $25.5 million in the prior
year quarter. On a year-to-date basis, the adjusted EBITDA loss was
$24.3 million compared to a loss of $24.9 million in 2008. -- Total
consolidated sales were $595.5 million, down $86.6 million, or
12.7%. -- Inventory was reduced by $99.1 million, led by the
reduction in multimedia inventory of $70.4 million. -- Comparable
store sales declined by 12.1% and 7.2% at Borders superstores and
Waldenbooks Specialty Retail stores, respectively. Excluding
multimedia, comparable store sales at Borders declined by 8.5%. --
SG&A expenses, on an operating basis, were reduced by $27.1
million. -- Debt, net of cash, at the end of the third quarter was
$375.0 million, a reduction from the prior year of $112.0 million,
or 23.0%. Debt, net of cash, compared to year-end levels increased
by $92.4 million, or 32.7% as inventory was added to core book
categories throughout the third quarter. "During the third quarter,
we prepared for the upcoming holiday selling season," said Borders
Group Chief Executive Officer Ron Marshall. "We increased core book
inventories, experimented with a range of traffic-driving and
in-store promotions and invested in store payroll to get books out
on the shelves and our stores in top condition to receive
customers. To ensure that our customers are confident in our
holiday selection, we recently launched what we believe is book
retailing's first-ever in-stock guarantee. If a customer comes to
shop at Borders and finds us out of stock on an item -- and that
item is among the more than one million titles on Borders.com -- we
will order the item for the customer, ship it to her at home and
the shipping charges will be on us. There will be no wasted
shopping trips for our customers this season." Consolidated Results
All sales and earnings/loss figures reported throughout this news
release are on a continuing operations basis unless otherwise
noted. Third quarter consolidated sales were $595.5 million, a
12.7% decrease from the same period a year ago. On an operating
basis, the company generated a third-quarter loss from continuing
operations of $39.0 million or $0.65 per share compared to a loss
of $39.0 million or $0.64 per share a year ago. On a GAAP basis,
the loss from continuing operations was $38.5 million or $0.64 per
share compared to a loss of $172.2 million or $2.85 per share a
year ago. The $0.64 per share loss includes income of $0.01 per
share of non-operating adjustments that were primarily non-cash.
Excluding non-operating charges, SG&A as a percent of sales
improved over third quarter last year by 0.4% from 28.7% to 28.3%
due to the company's aggressive expense reduction initiatives,
which were partially offset by de-leveraging due to negative sales
trends. Expense reduction initiatives helped reduce SG&A dollar
expenses in the third quarter by $27.1 million compared to the
prior year. On a GAAP basis, SG&A as a percent of sales was
down compared to last year by 1.0% from 30.1% to 29.1%. The company
made an additional investment of $16.8 million in inventory within
its core book category compared to the same period last year. At
the same time, Borders Group reduced third-quarter inventory in the
multimedia category by $70.4 million and by $45.5 million within
its Waldenbooks Specialty Retail segment due to store closures over
the past 12 months. In total, inventory was reduced by $99.1
million for the period. Third quarter capital expenditures were
$6.8 million compared to $17.9 million in 2008 as the company
continued to manage capital prudently. For the full year, capital
expenditures were $11.2 million compared to $72.0 million a year
ago. Debt, net of cash, at the end of the third quarter was $375.0
million, a reduction from the prior year of $112.0 million, or
23.0%. Debt, net of cash, compared to year-end levels increased by
$92.4 million, or 32.7%. Non-Operating Adjustments The table below
details non-operating adjustments for the third quarter and year to
date. Expense (income) amounts are as follows: Non-Operating Line
Item Adjustments Item Impact Q3 2009 YTD 2009 -----------------
---- -------- ------- -------- Consulting, professional and Gross
Margin other fees Cash and SG&A $1.2 million $10.1 million
----------------- ---- ----------- ------------ ------------- Store
closure and Gross Margin related items Cash and SG&A ($1.0)
million ($0.3) million ----------------- ---- -----------
------------- ------------- Severance and other compensation Gross
Margin costs Cash and SG&A $3.4 million $5.4 million
----------------- ---- ----------- ------------ ------------ Asset
impairments and other Asset writedowns Non-cash Impairments $0.2
million $1.0 million ----------------- -------- ----------
------------ ------------ Accelerated depreciation- multimedia
space reduction Non-cash SG&A $0.0 million $7.1 million
----------------- -------- --- ------------ ------------ Term loan
cost/ discount Interest amortization Non-cash Expense $1.1 million
$3.8 million --------------- -------- ------- ------------
------------ International Warrant/Put "put" expiration Non-cash
Expense $0.0 million $16.2 million ---------------- --------
---------- ------------ ------------- Warrant liability fair value
Warrant/Put adjustment Non-cash Expense ($28.7) million $18.9
million ----------------- -------- ----------- ------------
------------- Total pre-tax non-operating ($23.8) million $62.2
million adjustments ----------------- ------------- -------------
Normalized income Income Taxes taxes Non-cash (Benefit) $23.3
million $40.3 million ----------------- -------- ------------
------------- ------------- Total after-tax non-operating
adjustments ($0.5) million $102.5 million ---------------
-------------- -------------- ($0.01) EPS $1.71 EPS -----------
--------- Borders Superstores Total third quarter sales at Borders
superstores, including Borders.com, in the third quarter were
$492.4 million, down 12.1% from a year ago. Comparable store sales
decreased by 12.1% at Borders superstores in the third quarter.
Excluding the multimedia category, comparable store sales at
Borders declined by 8.5%. On an operating basis, the segment
generated a third quarter operating loss of $44.5 million compared
to an operating loss of $37.8 million for the same period a year
ago. On a GAAP basis, the segment generated an operating loss in
the third quarter of $46.2 million compared to an operating loss of
$80.3 million the prior year. No Borders superstores were closed
during the third quarter and the period ended with 513 locations.
Waldenbooks Specialty Retail Total sales in the third quarter
within the Waldenbooks Specialty Retail segment were $72.9 million,
a 20.3% decline compared to the same period in 2008 as the number
of stores was decreased to 361 at the end of the third quarter this
year compared to 467 stores that were open at the close of the same
period a year ago. The company closed nine Waldenbooks locations in
the third quarter of this year. Comparable store sales in the third
quarter at Waldenbooks decreased by 7.2%. On an operating basis,
the segment generated an operating loss of $8.2 million in the
third quarter compared to an operating loss of $13.2 million for
the same period in 2008. On a GAAP basis, the segment generated a
third quarter operating loss of $10.0 million compared to an
operating loss of $17.7 million for the same period in 2008.
Borders Group announced Nov. 5 that the company plans to close
approximately 200 stores within its Waldenbooks Specialty Retail
segment in January 2010 to emerge with a smaller, more profitable
mall business. Through this right-sizing, the company will reduce
the number of stores with operating losses, reduce overall rent
expense and lease-adjusted leverage and generate cash flow through
sales and working capital reductions. International Total sales
within the International segment (which consists primarily of
Paperchase) were $30.2 million in the third quarter, which is flat
with a year ago of $30.3 million. Excluding the impact of foreign
currency translation, segment sales increased by 7.0% for the
period. On an operating basis, the segment generated an operating
loss of $1.3 million in the third quarter compared to an operating
loss of $1.6 million for the same period in 2008. On a GAAP basis,
the segment generated a third quarter operating loss of $1.4
million compared to an operating loss of $1.8 million for the same
period in 2008. Conference Call Today Management will review third
quarter results on a conference call today at 10 a.m. Eastern. This
call is being web cast by Thomson Financial and can be accessed at
the Borders Group corporate Web site at
http://www.bordersgroupinc.com/. A replay will be accessible on the
Web site through Dec. 24. In addition, a replay phone service will
be available toll-free at 866-396-6282, or for international calls,
at 203-369-0517. The phone service will be available through Dec. 8
until 11:59 p.m. Eastern. Next Financial Release-Holiday Sales
Borders Group plans to issue information about holiday sales
results in mid-January. About Borders Group Headquartered in Ann
Arbor, Mich., Borders Group, Inc. (NYSE:BGP) is a leading retailer
of books, music and movies with more than 25,000 employees. Through
its subsidiaries, the company operates approximately 1,000 stores
worldwide primarily under the Borders® and Waldenbooks® brand
names. For online shopping, visit Borders.com. For more information
about the company, visit http://www.borders.com/investors. Safe
Harbor Statement This release contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. One can identify these forward-looking statements by the
use of words such as "expect," "planning," "possibility,"
"opportunity," "goal," "will," "may," "intend," "anticipates" and
other words of similar meaning. One can also identify them by the
fact that they do not relate strictly to historical or current
facts. These statements are likely to address matters such as the
company's future financial condition and performance (including
earnings per share, the profitability of Waldenbooks, liquidity,
sales, inventory levels and capital expenditures), its cost
reduction initiatives and plans for store closings and the
expansion of product categories. These statements are subject to
risks and uncertainties that could cause actual results and plans
to differ materially from those included in the company's
forward-looking statements. These risks and uncertainties include,
but are not limited to, consumer demand for the company's products,
particularly during the holiday season, which is believed to be
related to general economic and geopolitical conditions,
competition and other factors; the availability of adequate
capital--including vendor credit--to fund the company's operations
and to carry out its strategic plans; adverse litigation results or
other claims and the performance of the company's information
technology systems. The company's periodic reports filed from time
to time with the Securities and Exchange Commission contain more
detailed discussions of these and other risk factors that could
cause actual results and plans to differ materially from those
included in the forward-looking statements, and those discussions
are incorporated herein by reference. The company does not
undertake any obligation to update forward-looking statements.
Borders Group, Inc. Financial Statements (amounts in millions,
except per share amounts) Unaudited Sales and Earnings Summary
Quarter Ended October 31, 2009 (1)
---------------------------------- Operating Adjustments GAAP Basis
(2) (2) Basis --------- ---- ----- Borders Superstores $492.4 $-
$492.4 Waldenbooks Specialty Retail 72.9 - 72.9 International 30.2
- 30.2 ----- ---- ----- Total sales 595.5 - 595.5 Other revenue 7.0
- 7.0 ----- ---- ----- Total revenue 602.5 - 602.5 Cost of goods
sold, including occupancy costs 490.6 (1.4) 489.2 ----- ---- -----
Gross margin 111.9 1.4 113.3 Selling, general and administrative
expenses 168.6 5.0 173.6 Asset impairments and other writedowns -
0.2 0.2 ----- ----- ----- Operating loss (56.7) (3.8) (60.5)
Interest expense 5.2 1.1 6.3 Warrant/put expense (income) - (28.7)
(28.7) ----- ----- ----- Total interest expense (income) 5.2 (27.6)
(22.4) ----- ----- ----- Loss before income taxes (61.9) 23.8
(38.1) Income taxes (benefit) (22.9) 23.3 0.4 ----- ----- -----
Loss from continuing operations $(39.0) $0.5 (38.5) ===== =====
===== Loss from operations of discontinued operations (net of tax)
- - - Gain (loss) from disposal of discontinued operations (net of
tax) - 0.8 0.8 ----- ---- ----- Gain (loss) from discontinued
operations (net of tax) - 0.8 0.8 ----- ---- ----- Net loss $(39.0)
$1.3 (37.7) ====== ==== ===== Basic EPS from continuing operations
$(0.65) $0.01 $(0.64) Basic EPS from discontinued operations $-
$0.01 $0.01 Basic EPS including discontinued operations $(0.65)
$0.02 $(0.63) Basic weighted avg. common shares 60.1 60.1 60.1
Comparable Store Sales Borders Superstores (12.1%) Waldenbooks
Specialty Retail (7.2%) Quarter Ended November 1, 2008 (1)
---------------------------------- Operating Adjustments GAAP Basis
(3) (3) Basis --------- ----------- ----- Borders Superstores
$560.3 $- $560.3 Waldenbooks Specialty Retail 91.5 - 91.5
International 30.3 - 30.3 ----- ----- ------ Total sales 682.1 -
682.1 Other revenue 11.3 - 11.3 ----- ----- ------ Total revenue
693.4 - 693.4 Cost of goods sold, including occupancy costs 550.9
(4.5) 546.4 ----- ------ ------ Gross margin 142.5 4.5 147.0
Selling, general and administrative expenses 195.7 9.4 205.1 Asset
impairments and other writedowns - 50.1 50.1 ----- ------ ------
Operating loss (53.2) (55.0) (108.2) Interest expense 8.8 5.0 13.8
Warrant/put expense (income) - (12.7) (12.7) ----- ------ ------
Total interest expense (income) 8.8 (7.7) 1.1 ----- ------ ------
Loss before income taxes (62.0) (47.3) (109.3) Income taxes
(benefit) (23.0) 85.9 62.9 ----- ------ ------ Loss from continuing
operations $(39.0) $(133.2) $(172.2) ===== ====== ====== Loss from
operations of discontinued operations (net of tax) - - - Gain
(loss) from disposal of discontinued operations (net of tax) -
(3.2) (3.2) ----- ----- ------ Gain (loss) from discontinued
operations (net of tax) - (3.2) (3.2) ------ ------ ------ Net loss
$(39.0) $(136.4) $(175.4) ====== ======= ====== Basic EPS from
continuing operations $(0.64) $(2.21) $(2.85) Basic EPS from
discontinued operations $- $(0.05) $(0.05) Basic EPS including
discontinued operations $(0.64) $(2.26) $(2.90) Basic weighted avg.
common shares 60.5 60.5 60.5 Comparable Store Sales Borders
Superstores (12.8%) Waldenbooks Specialty Retail (7.7%) Sales and
Earnings Summary (As Percentage of Total Sales) Quarter Ended
October 31, Quarter Ended November 1, 2009 (1) 2008 (1)
------------------------- ------------------------------ Operating
Adjust- GAAP Operating Adjust- GAAP Basis (2) ments (2) Basis Basis
(3) ments (3) Basis --------- ------- ----- --------- --------
----- Borders Superstores 82.7% -% 82.7% 82.1% -% 82.1% Waldenbooks
Specialty Retail 12.2 - 12.2 13.4 - 13.4 International 5.1 - 5.1
4.5 - 4.5 ---- ---- ----- ----- ---- ---- Total sales 100.0 - 100.0
100.0 - 100.0 Other revenue 1.2 - 1.2 1.7 - 1.7 ----- ---- -----
----- ---- ---- Total revenue 101.2 - 101.2 101.7 - 101.7 Cost of
goods sold, including occupancy costs 82.4 (0.2) 82.2 80.8 (0.7)
80.1 ---- ---- ---- ---- ---- ---- Gross margin 18.8 0.2 19.0 20.9
0.7 21.6 Selling, general and administrative expenses 28.3 0.8 29.1
28.7 1.4 30.1 Asset impairments and other writedowns - 0.1 0.1 -
7.3 7.3 ---- ---- ---- ---- ---- --- Operating loss (9.5) (0.7)
(10.2) (7.8) (8.0) (15.8) Interest expense 0.9 0.1 1.0 1.3 0.7 2.0
Warrant/put expense (income) - (4.8) (4.8) - (1.8) (1.8) ---- ----
---- ---- ---- ---- Total interest expense (income) 0.9 (4.7) (3.8)
1.3 (1.1) 0.2 ---- ---- ---- ---- ---- ---- Loss before income
taxes (10.4) 4.0 (6.4) (9.1) (6.9) (16.0) Income taxes (benefit)
(3.9) 4.0 0.1 (3.4) 12.6 9.2 ---- ---- ---- ---- ---- ---- Loss
from continuing operations (6.5)% -% (6.5)% (5.7)% (19.5)% (25.2)%
(1) The results of Borders Australia, Borders New Zealand and
Borders Singapore are reported as discontinued operations. (2)
Results from 2009 were impacted by a number of non-operating items,
including asset impairments, severance costs, store closure costs,
professional fees related to our turnaround efforts and
amortization of the term loan discount and debt issuance costs,
partially offset by non-cash income related to the fair market
value adjustment of the warrant liability. Therefore, solely for
analytical purposes and as an aid to better understand underlying
trends, operating basis data are presented excluding these items.
To aid in the comparability to last year, operating basis data is
presented using a normalized tax rate. (3) Results from 2008 were
impacted by a number of non-operating items, including deferred tax
asset impairments, store asset impairments, store closure costs,
severance costs, professional fees related to strategic
alternatives and amortization of the term loan discount and debt
issuance costs, offset by non-cash income related to the fair
market value adjustment of the warrant liability as well as income
received from a landlord lease termination. Therefore, solely for
analytical purposes and as an aid to better understand underlying
trends, operating basis data are presented excluding these items.
To aid in the comparability to last year, operating basis data is
presented using a normalized tax rate. Borders Group, Inc.
Financial Statements (amounts in millions, except per share
amounts) Unaudited Sales and Earnings Summary Nine Months Ended
Nine Months Ended October 31, 2009 (1) November 1, 2008 (1)
-------------------------- ------------------------------ Operating
Adjust- GAAP Operating Adjust- GAAP Basis (2) ments (2) Basis Basis
(3) ments (3) Basis --------- ------- ----- --------- --------
----- Borders Superstores $1,542.7 $- $1,542.7 $1,782.9 $- $1,782.9
Waldenbooks Specialty Retail 224.3 - 224.3 284.4 - 284.4
International 86.8 - 86.8 93.5 - 93.5 ----- ---- ----- ----- ----
----- Total sales 1,853.8 - 1,853.8 2,160.8 - 2,160.8 Other revenue
23.6 - 23.6 26.9 - 26.9 ------- ---- ------- ------- ---- -------
Total revenue 1,877.4 - 1,877.4 2,187.7 - 2,187.7 Cost of goods
sold, including occupancy costs 1,480.0 (2.1) 1,477.9 1,693.5 (3.0)
1,690.5 ------- ---- ------- ------- ---- ------- Gross margin
397.4 2.1 399.5 494.2 3.0 497.2 Selling, general and administrative
expenses 490.5 24.4 514.9 601.5 21.8 623.3 Asset impairments and
other writedowns - 1.0 1.0 - 50.1 50.1 ------ ---- ------- -------
---- ------- Operating loss (93.1) (23.3) (116.4) (107.3) (68.9)
(176.2) Interest expense 14.2 3.8 18.0 23.7 10.7 34.4 Warrant/ put
expense (income) - 35.1 35.1 - (27.2) (27.2) ------ ---- ------
------- ----- ----- Total interest expense (income) 14.2 38.9 53.1
23.7 (16.5) 7.2 ------ ---- ------ ------- ----- ----- Loss before
income taxes (107.3) (62.2) (169.5) (131.0) (52.4) (183.4) Income
taxes (benefit) (39.7) 40.3 0.6 (51.0) 81.2 30.2 ------ ---- -----
----- ----- ----- Loss from continuing operations $(67.6) $(102.5)
$(170.1) $(80.0) $(133.6) $(213.6) ===== ====== ====== ===== ======
====== Loss from operations of discontinued operations (net of tax)
- - - (1.7) - (1.7) Gain (loss) on disposal of discontinued
operations (net of tax) - 0.8 0.8 - (1.0) (1.0) ----- ----- -----
----- ----- ----- Gain (loss) from discontinued operations (net of
tax) - 0.8 0.8 (1.7) (1.0) (2.7) ----- ----- ----- ----- -----
----- Net loss $(67.6) $(101.7) $(169.3) $(81.7) $(134.6) $(216.3)
===== ===== ===== ===== ===== ===== Basic EPS from continuing
operations $(1.12) $(1.71) $(2.83) $(1.33) $(2.22) $(3.55) Basic
EPS from discontinued operations $- $0.01 $0.01 $(0.02) $(0.02)
$(0.04) Basic EPS including discontinued operations $(1.12) $(1.70)
$(2.82) $(1.35) $(2.24) $(3.59) Basic weighted avg. common shares
60.1 60.1 60.1 60.2 60.2 60.2 Comparable Store Sales Borders
Superstores (14.6%) (8.6%) Waldenbooks Specialty Retail (7.9%)
(5.2%) Sales and Earnings Summary (As Percentage of Total Sales)
Nine Months Ended Nine Months Ended October 31, 2009 (1) November
1, 2008 (1) ---------------------------
------------------------------ Operating Adjust- GAAP Operating
Adjust- GAAP Basis (2) ments (2) Basis Basis (3) ments (3) Basis
--------- ------- ----- --------- -------- ----- Borders
Superstores 83.2% -% 83.2% 82.5% -% 82.5% Waldenbooks Specialty
Retail 12.1 - 12.1 13.2 - 13.2 International 4.7 - 4.7 4.3 - 4.3
----- ---- ----- ---- ---- ----- Total sales 100.0 - 100.0 100.0 -
100.0 Other revenue 1.3 - 1.3 1.2 - 1.2 ----- ---- ----- ----- ----
----- Total revenue 101.3 - 101.3 101.2 - 101.2 Cost of goods sold,
including occupancy costs 79.8 (0.1) 79.7 78.3 (0.1) 78.2 -----
---- ----- ----- ---- ----- Gross margin 21.5 0.1 21.6 22.9 0.1
23.0 Selling, general and administrative expenses 26.5 1.3 27.8
27.9 1.0 28.9 Asset impairments and other writedowns - 0.1 0.1 -
2.3 2.3 ----- ----- ----- ----- ----- ----- Operating loss (5.0)
(1.3) (6.3) (5.0) (3.2) (8.2) Interest expense 0.8 0.2 1.0 1.1 0.5
1.6 Warrant/put expense (income) - 1.9 1.9 - (1.3) (1.3) --- ---
--- --- ---- ---- Total interest expense (income) 0.8 2.1 2.9 1.1
(0.8) 0.3 --- --- --- --- ---- --- Loss before income taxes (5.8)
(3.4) (9.2) (6.1) (2.4) (8.5) Income taxes (benefit) (2.2) 2.2 -
(2.4) 3.8 1.4 ---- --- --- ---- --- --- Loss from continuing
operations (3.6)% (5.6)% (9.2) (3.7)% (6.2)% (9.9)% (1) The results
of Borders Australia, Borders New Zealand and Borders Singapore are
reported as discontinued operations. (2) Results from 2009 were
impacted by a number of non-operating items, including accelerated
depreciation related to our multimedia reduction initiative, asset
impairments, severance costs, store closure costs, professional
fees related to our turnaround efforts, amortization of the term
loan discount and debt issuance costs, and non-cash charges related
to the fair market value adjustment of the warrant liability and
international put expiration. Therefore, solely for analytical
purposes and as an aid to better understand underlying trends,
operating basis data are presented excluding these items. To aid in
the comparability to last year, operating basis data is presented
using a normalized tax rate. (3) Results from 2008 were impacted by
a number of non-operating items, including deferred tax asset
impairments, store asset impairments, store closure costs,
severance costs, professional fees related to strategic
alternatives and amortization of the term loan discount and debt
issuance costs, offset by income related to the fair market value
adjustment of the warrant liability as well as income received from
a landlord lease termination. Therefore, solely for analytical
purposes and as an aid to better understand underlying trends,
operating basis data are presented excluding these items. To aid in
the comparability to last year, operating basis data is presented
using a normalized tax rate. Borders Group, Inc. Financial
Statements (dollars in millions) Unaudited Condensed Consolidated
Balance Sheets October 31, November 1, January 31, 2009 2008 2009
---- ---- ---- Assets Cash and cash equivalents $32.8 $38.4 $53.6
Merchandise inventories 1,157.4 1,256.5 915.2 Other current assets
78.4 99.6 102.4 Property and equipment, net 426.5 521.3 494.2 Other
assets and deferred charges 46.5 90.7 43.4 Goodwill 0.3 40.5 0.2
--- ---- --- Total assets $1,741.9 $2,047.0 $1,609.0 ========
======== ======== Liabilities and Stockholders' Equity Short-term
borrowings and current portion of long-term debt $401.8 $518.0
$329.8 Trade accounts payable 605.3 613.2 350.0 Other current
liabilities 274.9 311.5 313.9 Long-term debt 6.0 7.4 6.4 Other
long-term liabilities 354.7 353.9 345.8 ----- ----- ----- Total
liabilities 1,642.7 1,804.0 1,345.9 Total stockholders' equity 99.2
243.0 263.1 ---- ----- ----- Total liabilities and stockholders'
equity $1,741.9 $2,047.0 $1,609.0 ======== ======== ========
Certain reclassifications have been made to conform to current year
presentation. Store Activity Summary Year Quarter Ended Nine Months
Ended Ended ------------------ ------------------ -------- Oct. 31,
Nov. 1, Oct. 31, Nov. 1, Jan. 31, 2009 2008 2009 2008 2009 --------
------- -------- ------- -------- Borders Superstores Beginning
number of stores 513 518 515 509 509 Openings - 2 - 11 12 Closings
- (1) (2) (1) (6) -------- ------- -------- ------- -------- Ending
number of stores 513 519 513 519 515 ======== ======= ========
======= ======== Ending square footage (in millions) 12.7 12.8 12.7
12.8 12.8 Waldenbooks Specialty Retail Stores (1) Beginning number
of stores 370 468 386 490 490 Openings-Airport stores - 5 1 5 8
Closings (9) (6) (26) (28) (112) -------- ------- -------- -------
-------- Ending number of stores 361 467 361 467 386 ========
======= ======== ======= ======== Ending square footage (in
millions) 1.3 1.8 1.3 1.8 1.4 ======== ======= ======== =======
======== (1) Includes all small format stores in malls, airports
and outlet malls. Borders Group, Inc. Financial Statements (dollars
in millions) Unaudited Condensed Consolidated Statements of Cash
Flows Quarter Ended Nine Months Ended ------------------
------------------- Oct. 31, Nov. 1, Oct. 31, Nov. 1, 2009 2008
2009 2008 -------- ------- -------- ------- CASH PROVIDED BY (USED
FOR): OPERATIONS Loss from continuing operations $(38.5) $(172.2)
$(170.1) $(213.6) Adjustments to reconcile loss from continuing
operations to operating cash flows: Depreciation 22.5 27.7 75.9
82.4 Loss on disposal of assets 0.8 0.3 1.3 1.3 Stock based
compensation cost 0.2 1.7 0.2 5.0 Increase (decrease) in warrant
liability (28.7) (12.7) 23.2 13.6 Change in other long-term assets,
liabilities and deferred charges (3.5) 43.6 (15.7) 16.2 Write-off
of intangible asset - - 16.2 - Asset impairments and other
writedowns 0.2 50.1 1.0 50.1 Increase in inventories (267.9)
(171.0) (238.8) (19.4) Increase in accounts payable 195.1 146.2
254.0 103.5 Cash provided by (used for) other current assets and
other current liabilities (5.5) 46.7 (29.5) (24.7) -------- -------
-------- ------- Net cash provided by (used for) operating
activities of continuing operations (125.3) (39.6) (82.3) 14.4
INVESTING Capital expenditures (6.8) (17.9) (11.2) (72.0) Proceeds
from the sale of discontinued operations - 6.6 - 94.5 --------
------- -------- ------- Net cash provided by (used for) investing
activities of continuing operations (6.8) (11.3) (11.2) 22.5
FINANCING Net cash provided by (repayment of) financing obligations
119.7 55.0 73.3 (28.6) Issuance and repurchase of common stock
(0.5) - (0.8) 0.3 Net funding from (repayment of) long-term debt -
0.1 (0.3) 0.8 Net repayment of capital lease obligations (0.2) -
(0.8) - Cash dividends paid - - - (6.5) -------- ------- --------
------- Net cash provided by (used for) financing activities of
continuing operations 119.0 55.1 71.4 (34.0) Effect of exchange
rates on cash and cash equivalents - (0.1) 0.5 - Net cash provided
by (used for) discontinued operations 0.8 (9.6) 0.8 (23.0) --------
------- -------- ------- NET DECREASE IN CASH AND CASH EQUIVALENTS
(12.3) (5.5) (20.8) (20.1) -------- ------- -------- ------- Cash
and cash equivalents at beginning of period 45.1 43.9 53.6 58.5
-------- ------- -------- ------- Cash and cash equivalents at end
of period $32.8 $38.4 $32.8 $38.4 ======== ======= ======== =======
Borders Group, Inc. Segment Financial Information (dollars in
millions, except per share amounts) Unaudited Quarter Ended Quarter
Ended October 31, 2009 November 1, 2008 -----------------------
------------------------ Adjust- Adjust- Operating ments GAAP
Operating ments GAAP Basis(1) (1) Basis Basis(2) (2) Basis
----------------------- ------------------------ Borders
Superstores ------------------- Sales $492.4 $- $492.4 $560.3 $-
$560.3 Depreciation expense 19.2 - 19.2 23.8 - 23.8 Operating loss
(44.5) (1.7) (46.2) (37.8) (42.5) (80.3) Adjusted EBITDA (5) (25.3)
(14.0) Waldenbooks Specialty Retail Sales $72.9 $- $72.9 $91.5 $-
$91.5 Depreciation expense 1.9 - 1.9 2.3 - 2.3 Operating loss (8.2)
(1.8) (10.0) (13.2) (4.5) (17.7) Adjusted EBITDA (5) (6.3) (10.9)
International (3) ----------------- Sales $30.2 $- $30.2 $30.3 $-
$30.3 Depreciation expense 1.4 - 1.4 1.6 - 1.6 Operating loss (1.3)
(0.1) (1.4) (1.6) (0.2) (1.8) Adjusted EBITDA (5) 0.1 - Corporate
(4) ------------- Operating loss $(2.7) $(0.2) $(2.9) $(0.6) $(7.8)
$(8.4) Adjusted EBITDA (5) (2.7) (0.6) Consolidated (3)
---------------- Sales $595.5 $- $595.5 $682.1 $- $682.1
Depreciation expense 22.5 - 22.5 27.7 - 27.7 Operating loss (56.7)
(3.8) (60.5) (53.2) (55.0) (108.2) Adjusted EBITDA (5) (34.2)
(25.5) Nine Months Ended Nine Months Ended October 31, 2009
November 1, 2008 -------------------------
-------------------------- Adjust- Adjust- Operating ments GAAP
Operating ments GAAP Basis(1) (1) Basis Basis(2) (2) Basis
------------------------- -------------------------- Borders
Superstores ------------ Sales $1,542.7 $- $1,542.7 $1,782.9 $-
$1,782.9 Depreciation expense 59.0 7.1 66.1 70.9 - 70.9 Operating
loss (66.2) (13.9) (80.1) (68.8) (49.2) (118.0) Adjusted EBITDA (5)
(7.2) 2.1 Waldenbooks Specialty Retail Sales $224.3 $- $224.3
$284.4 $- $284.4 Depreciation expense 5.7 - 5.7 6.9 - 6.9 Operating
loss (16.7) (3.2) (19.9) (32.7) (6.3) (39.0) Adjusted EBITDA (5)
(11.0) (25.8) International (3) ----------------- Sales $86.8 $-
$86.8 $93.5 $- $93.5 Depreciation expense 4.1 - 4.1 4.6 - 4.6
Operating loss (2.2) (0.8) (3.0) (1.5) (0.3) (1.8) Adjusted EBITDA
(5) 1.9 3.1 Corporate (4) ------------- Operating loss $(8.0)
$(5.4) $(13.4) $(4.3) $(13.1) $(17.4) Adjusted EBITDA (5) (8.0)
(4.3) Consolidated (3) ---------------- Sales $1,853.8 $- $1,853.8
$2,160.8 $- $2,160.8 Depreciation expense 68.8 7.1 75.9 82.4 - 82.4
Operating loss (93.1) (23.3) (116.4) (107.3) (68.9) (176.2)
Adjusted EBITDA (5) (24.3) (24.9) (1) Results from 2009 were
impacted by a number of non-operating items, including accelerated
depreciation related to our multimedia reduction initiative, asset
impairments, severance costs, store closure costs and professional
fees related to our turnaround efforts. Therefore, solely for
analytical purposes and as an aid to better understand underlying
trends, operating basis data are presented excluding these items.
(2) Results from 2008 were impacted by a number of non-operating
items, including deferred tax asset impairments, store asset
impairments, store closure costs, severance costs and professional
fees related to strategic alternatives. Therefore, solely for
analytical purposes and as an aid to better understand underlying
trends, operating basis data are presented excluding these items.
(3) Excludes the results of 2008 discontinued operations (Borders
Australia, Borders New Zealand and Borders Singapore). (4) The
Corporate segment includes various corporate governance costs and
corporate incentive costs. (5) Adjusted EBITDA is operating income
(loss) before depreciation and amortization. Adjusted EBITDA is not
a Generally Accepted Accounting Principles (GAAP) measurement.
Adjusted EBITDA information is being included as we believe it is a
commonly used measure of operating performance in the retail
industry. Adjusted EBITDA is provided to enhance an investor's
understanding of our operating results. It should not be construed
as an alternative to income from operations as an indicator of
operating performance or as an alternative to cash flows from
operating activities as a measure of liquidity as determined in
accordance with GAAP. All companies do not calculate Adjusted
EBITDA in the same manner. As a result, Adjusted EBITDA as reported
may not be comparable to Adjusted EBITDA as reported by other
companies.
http://www.newscom.com/cgi-bin/prnh/20060208/BORDERSGRPLOGODATASOURCE:
Borders Group, Inc. CONTACT: Investors: Mark Bierley,
+1734-477-4105; or Media: Anne Roman, +1-734-477-1392 Web Site:
http://www.bordersgroupinc.com/
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