For the 26-week period ended August 2, 2003, net sales increased 3.7% to $212.3 million from sales of $204.7 million. Comparable store sales increased 1.7% when compared with the same period of fiscal 2003. For the 26-week period, the Company reported net income of $319,000, or $0.02 per diluted share, compared with a net loss of $1.7 million, or $0.11 per diluted share for the year-earlier period. Last year's net loss included a decrease to earnings to reflect the cumulative effect of a change in accounting principle of $1.2 million after tax, or $0.08 per diluted share. Before the change in accounting principle, the Company reported a loss of $536,000, or $0.03 per diluted share.
Commenting on the results, Clyde B. Anderson, Chairman and Chief Executive Officer, said, "The publication of Harry Potter and the Order of the Phoenix was an unprecedented event for our industry and, combined with the success of bestsellers in the biography, diet and health and fiction categories, resulted in the improvement in comparable store sales. In addition to the strong performance of the book categories, our gift categories, collectors products and cafes continued to post positive results. Joe Muggs cafe sales benefited from the introduction of our new Frappe brand frozen drinks.
Anderson continued, "The fall lineup is one of the strongest in years and includes excellent selections from many well-known authors such as Tom Clancy, Patricia Cornwell, John Grisham, Bill O'Reilly, Jan Karon, Stephen King and Nicholas Sparks. Current bestsellers, such as The South Beach Diet and The Da Vinci Code, continue to sell well and promise to contribute to a successful fall season for books."
Books-A-Million is one of the nation's leading book retailers and sells on the Internet at www.booksamillion.com. The Company presently operates 202 stores in 18 states and the District of Columbia. The Company operates three distinct store formats, including large superstores operating under the names Books-A-Million and Books & Co., traditional bookstores, operating under the name Bookland and Books-A-Million, and Joe Muggs Newsstands. The Company's wholesale operations include American Wholesale Book Company and Book$mart, both based in Florence, Alabama. NetCentral, Inc., an Internet development and service Company is located in Nashville, Tennessee.
BOOKS-A-MILLION, INC.
Unaudited Consolidated Statements of Income
(In thousands, except per share data)
13 Weeks Ended 26 Weeks Ended
------------------- -------------------
August 2, August 3, August 2, August 3,
2003 2002 2003 2002
-------- -------- -------- --------
NET SALES $113,473 $104,023 $212,318 $204,732
Cost of sales
(including warehouse,
distribution and
store occupancy costs) 82,575 75,971 156,386 149,211
-------- -------- -------- --------
GROSS PROFIT 30,898 28,052 55,932 55,521
Operating, selling
and administrative
expenses 23,746 23,758 45,409 46,481
Depreciation and
amortization 3,949 3,929 8,017 7,888
-------- -------- -------- --------
OPERATING INCOME 3,203 365 2,506 1,152
Interest expense, net 848 1,000 1,717 1,934
-------- -------- -------- --------
INCOME (LOSS) FROM
CONTINUING OPERATIONS
BEFORE INCOME TAXES
AND CUMULATIVE
EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE 2,355 (635) 789 (782)
Income tax provision
(benefit) 895 (241) 300 (297)
-------- -------- -------- --------
INCOME (LOSS) FROM
CONTINUING OPERATIONS
BEFORE CUMULATIVE
EFFECT OF A CHANGE IN
ACCOUNTING PRINCIPLE 1,460 (394) 489 (485)
DISCONTINUED OPERATIONS:
Loss from discontinued
operations (including
loss on disposal) (160) (50) (275) (83)
Income tax provision
(benefit) (61) (19) (105) (32)
-------- -------- -------- --------
LOSS FROM DISCONTINUED
OPERATIONS (99) (31) (170) (51)
-------- -------- -------- --------
INCOME (LOSS) BEFORE
CUMULATIVE EFFECT
OF A CHANGE IN
ACCOUNTING PRINCIPLE 1,361 (425) 319 (536)
Cumulative effect of
a change in accounting
principle, net of
income taxes -- -- -- (1,201)
-------- -------- -------- --------
NET INCOME (LOSS) $ 1,361 $ (425) $ 319 $ (1,737)
======== ======== ======== ========
NET INCOME (LOSS) PER COMMON SHARE:
Basic:
Income (loss) from
continuing operations
before cumulative effect
of a change in accounting
principle $ 0.09 $ (0.03) $ 0.03 $ (0.03)
Loss from discontinued
operations (0.01) -- (0.01) --
-------- -------- -------- --------
Income (loss) before
cumulative effect of
a change in
accounting principle 0.08 (0.03) 0.02 (0.03)
Cumulative effect of a
change in accounting
principle -- -- -- (0.08)
-------- -------- -------- --------
Net income (loss) $ 0.08 $ (0.03) $ 0.02 $ (0.11)
======== ======== ======== ========
Diluted:
Income (loss) from
continuing operations
before effect of a
change in accounting
principle $ 0.09 $ (0.03) $ 0.03 $ (0.03)
Loss from discontinued
operations (0.01) -- (0.01) --
-------- -------- -------- --------
Income (loss) before
cumulative effect
of a change in
accounting principle 0.08 (0.03) 0.02 (0.03)
Cumulative effect of
a change in accounting
principle -- -- -- (0.08)
-------- -------- -------- --------
Net income (loss) $ 0.08 $ (0.03) $ 0.02 $ (0.11)
======== ======== ======== ========
Weighted average
shares outstanding:
Basic 16,248 16,199 16,234 16,181
======== ======== ======== ========
Diluted 16,518 16,199 16,435 16,181
======== ======== ======== ========
Safe Harbor Statement Under the Private Securities Litigation Reform
Act of 1995:
This document contains certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995,
that involve a number of risks and uncertainties. A number of factors
could cause actual results, performance, achievements of the Company,
or industry results to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. These factors include, but are not limited
to, the competitive environment in the book retail industry in general
and in the Company's specific market area; inflation; economic
conditions in general and in the Company's specific market areas; the
number of store openings and closings; the profitability of certain
product lines, capital expenditures and future liquidity; liability
and other claims asserted against the Company; uncertainties related
to the Internet and the Company's Internet initiative. In addition,
such forward-looking statements are necessarily dependent upon
assumptions, estimates and dates that may be incorrect or imprecise
and involve known and unknown risks, uncertainties and other factors.
Accordingly, any forward-looking statements included herein do not
purport to be predictions of future events or circumstances and may
not be realized. Given these uncertainties, shareholders and
prospective investors are cautioned not to place undue reliance on
such forward-looking statements. The Company disclaims any obligations
to update any such factors or to publicly announce the results of any
revisions to any of the forward-looking statements contained herein to
reflect future events or developments.