Published:
NBC Acquisition Corp. Reports Another Record Fiscal Year
LINCOLN, Neb., June 23 /PRNewswire/ -- NBC Acquisition Corp., the parent
company of Nebraska Book Company Inc., today announced results for its fiscal
year ended March 31, 2008. For the fiscal year, consolidated revenues were a
record $581.2 million, up $36.8 million from $544.4 million in the fiscal year
ended March 31, 2007. Earnings Before Interest, Taxes, Depreciation, and
Amortization (EBITDA) for the 2008 fiscal year were a record $69.9 million, up
$1.8 million from $68.1 million in the prior fiscal year. After adding back
the non-cash charges related to the Company's stock compensation plans, EBITDA
was $71.0 million. Net income was down slightly to $7.2 million as increased
depreciation, amortization and net interest expense offset the increase in
EBITDA.
Mark Oppegard, President and CEO, Nebraska Book Company said, "We are
pleased with our fiscal 2008 results as we continue to grow and invest in our
future. Competition for student transactions continues but we believe we are
well positioned to meet that challenge."
The Company's record revenues included $454.4 million from the College
Bookstore division (up 8.6%), $139.7 million from the Textbook division (up
2.9%), and $34.4 million from the Complementary Services division (up 6.7%).
Such revenues include inter-company revenues of $47.2 million. Revenues in
the College Bookstore division increased due to acquisitions as well as same
store sales for the year ended March 31, 2008, which increased 4.0%. Revenues
in the Textbook division increased due to price increases and lower returns
which were offset partially by a decrease in units sold. Revenues in the
Complementary Services division increased primarily due to higher revenues
from Specialty Books, Inc. a subsidiary involved in distance education.
Consolidated gross profit was a record $227.1 million for the fiscal year
ended March 31, 2008, an increase of $15.1 million or 7.1% over the prior
fiscal year. Gross margin was 39.1% for the 2008 fiscal year, a small
increase from the prior fiscal year gross margin of 38.9% due primarily to a
shift in revenue in the College Bookstore division to higher margin used
textbooks and to overall improvements in gross margin in the stores acquired
in fiscal 2007 in the acquisition of College Bookstores of America. Total
operating expenses were $174.8 million in fiscal 2008, an increase of $15.4
million over the prior fiscal year of $159.4 million. The increase in
operating expenses was primarily due to continued growth of the Company,
especially in the College Bookstore division, which prompted an increase of
$4.3 million in commission expense, $3.1 million in rent, $2.5 million in
shipping expense and $2.0 million in personnel costs. Depreciation and
amortization also accounted for $2.1 million of the increase in operating
expenses. The increased commission and shipping expenses were primarily due
to increased College Bookstore division sales on the Internet involving third
party websites.
Net interest expense was $40.5 million, an increase of $1.5 million
compared to the prior fiscal year. The increase was primarily due to
increased interest on the Senior Discount Notes and lower interest income.
EBITDA (excluding corporate costs) for each of the Company's operating
divisions in fiscal year 2008 was $45.9 million in the College Bookstore
division, an increase of $1.4 million or 3.2% over the prior fiscal year,
$33.7 million in the Textbook division, an increase of $1.5 million or 4.7%
over the prior fiscal year, and $1.5 million in the Complementary Services
division, a decrease of $1.2 million compared to the prior fiscal year
primarily due to lower results in the systems group.
At March 31, 2008, the Company was operating 260 locations around the
country. The Company announced that during the 4th quarter of the fiscal year
and subsequent to year end it had acquired or agreed to contract manage
bookstores at 11 more locations across the country with revenues expected to
be approximately $20 million on a full year basis. The Company also indicated
that during the 4th quarter and subsequent to year end it has lost or resigned
from 5 contract managed locations, with revenues of approximately $5.6 million
in fiscal 2008.
NBC ACQUISITION CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended Year Ended
March 31, 2008 March 31, 2007
REVENUES, net of returns $581,247,786 $544,427,964
COSTS OF SALES (exclusive of
depreciation shown below) 354,139,474 332,443,991
Gross profit 227,108,312 211,983,973
OPERATING EXPENSES:
Selling, general and administrative 157,193,426 143,095,625
Depreciation 7,208,504 5,915,758
Amortization 10,443,335 9,613,598
Closure of California warehouse (36,057) 774,475
174,809,208 159,399,456
INCOME FROM OPERATIONS 52,299,104 52,584,517
OTHER EXPENSES (INCOME):
Interest expense 41,659,028 40,410,094
Interest income (1,332,497) (1,643,598)
Loss on derivative financial
instrument 198,000 225,000
40,524,531 38,991,496
INCOME BEFORE INCOME TAXES 11,774,573 13,593,021
INCOME TAX EXPENSE 4,558,122 5,699,634
NET INCOME $7,216,451 $7,893,387
SELECTED BALANCE SHEET DATA: March 31, 2008 March 31, 2007
Cash & cash equivalents $29,326,456 $32,982,876
Receivables 57,396,508 54,949,070
Inventories 99,011,087 94,548,706
Identifiable intangibles, net of
amortization 134,809,217 139,824,716
Goodwill 320,367,273 311,606,364
Total assets 703,364,398 697,004,762
Total long-term debt 447,433,833 441,903,377
Stockholders' equity 146,170,805 140,244,878
EBITDA for the years ended March 31, 2008 and 2007 and the corresponding
change in EBITDA were as follows:
Year Ended Year Ended Change
March 31, March 31, Amount Percentage
2008 2007
Bookstore Division $45,941,624 $44,511,202 $1,430,422 3.2%
Textbook Division 33,731,382 32,210,010 1,521,372 4.7%
Complementary Services
Division 1,558,414 2,716,144 (1,157,730) -42.6%
Corporate administration (11,280,477) (11,323,483) 43,006 0.4%
$69,950,943 $68,113,873 $1,837,070 2.7%
As the Company is highly-leveraged and its equity is not publicly-traded,
it believes that a non-GAAP financial measure, EBITDA, is 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 does not represent
and should not be considered as an alternative to net cash flows from
operating activities as determined by GAAP, and EBITDA does not necessarily
indicate whether cash flows will be sufficient for cash requirements. Items
excluded from EBITDA, such as interest, taxes, depreciation and amortization,
are significant components in understanding and assessing the Company's
financial performance. EBITDA measures presented here may not be comparable
to similarly titled measures presented by other companies.
The following presentation reconciles EBITDA with net cash flows from
operating activities and also sets forth net cash flows from investing and
financing activities:
Year Ended Year Ended
March 31, 2008 March 31, 2007
EBITDA $69,950,943 $68,113,873
Adjustments to reconcile EBITDA to
net cash flows from operating
activities:
Share-based compensation 1,040,599 996,957
Interest income 1,332,497 1,643,598
Provision for losses on receivables 468,007 834,442
Cash paid for interest (31,755,319) (31,388,513)
Cash paid for income taxes (13,030,853) (6,551,344)
(Gain) Loss on disposal of assets 284,891 (575)
Changes in operating assets and
liabilities, net of effect of
acquisitions (7,190,132) (6,132,260)
Net Cash Flows from Operating Activities $21,100,633 $27,516,178
Net Cash Flows from Investing Activities $(22,179,160) $(32,808,754)
Net Cash Flows from Financing Activities $(2,577,893) $4,892,730
Please note that this press release, including the reconciliation of the
differences between net cash flows and 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 24th at 9:00 a.m. central time (10:00 a.m. eastern).
Participants will be Mark Oppegard, President and Chief Executive Officer,
Barry Major, Chief Operating Officer, and Alan Siemek, Chief Financial
Officer.
The call can be accessed by calling 888 428-4472. A replay of the call
will be available from 11:00 a.m. central time on June 24th, 2008 until 11:59
p.m. central time on July 1st, 2008 by calling 800 475-6701 in the U.S. The
access code is 930818.
About Nebraska Book Company
Nebraska Book Company began in 1915 with a single bookstore near the
University of Nebraska campus but now serves more than 2.1 million students
through its network of over 260 stores located across the country. Our
Textbook Division serves more than 2,500 bookstores through the sale of over
seven million textbooks, and our Complementary Services Division has installed
more than 1,600 technology platforms and e-commerce sites. Additional
information about Nebraska Book Company can be found at the Company's website:
http://www.nebook.com.
"Safe Harbor" Statement Under the Private Securities Litigation Reform
Act of 1995
This press release contains certain statements that are not historical
facts, including, most importantly, information concerning possible or assumed
future results of operations of the Company and statements preceded by,
followed by or that include the words "may," believes," "expects,"
"anticipates," or the negation thereof, or similar expressions, which
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 (the "Reform Act"). All statements
which address operating performance, events or developments that are expected
or anticipated to occur in the future, including statements relating to volume
and revenue growth, earnings per share or EBITDA growth or statements
expressing general optimism or pessimism about future results of operation,
are forward-looking statements within the meaning of the Reform Act. Such
forward-looking statements involve risks, uncertainties and other factors
which may cause the actual performance or achievements of the Company to be
materially different from any future results, performances or achievements
expressed or implied by such forward-looking statements. For those
statements, the Company claims the protection of the safe harbor for
forward-looking statements contained in the Reform Act. Several important
factors could affect the future results of the Company and could cause those
results to differ materially from those expressed in the forward-looking
statements contained herein. Such factors include, but are not limited to,
the following: increased competition from other companies that target the
Company's markets; increased competition from alternative media and
alternative sources of textbooks for students, including digital or other
educational content sold directly to students; increased competition for the
purchase and sale of used textbooks from student to student transactions; the
Company's inability to successfully acquire or contract-manage additional
bookstores or to integrate those additional stores; the Company's inability to
cost-effectively maintain or increase the number of contract-managed stores;
the Company's inability to purchase a sufficient supply of used textbooks;
changes in pricing of new and/or used textbooks; changes in publisher
practices regarding new editions and materials packaged with new textbooks;
the loss or retirement of key members of management; the impact of seasonality
of the wholesale and bookstore operations; increases in the Company's cost of
borrowing or the Company's inability to renew or raise additional debt or
raise additional equity capital; changes in general economic conditions and/or
in the markets in which the Company competes or may, from time to time,
compete; and other risks detailed in the Company's Securities and Exchange
Commission filings, all of which are difficult or impossible to predict
accurately and many of which are beyond the control of the Company. The
Company will not undertake and specifically declines any obligation to
publicly release the result of any revisions which may be made to any
forward-looking statements to reflect events or circumstances after the date
of such statements or to reflect the occurrence of anticipated or
unanticipated events.
SOURCE NBC Acquisition Corp.
Copyright © 2008, PRNewswire
Copyright © 2008, NewsBlaze,
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