For the 39-week period ended November 1, 2003, net sales increased 4.6% to $315.4 million from sales of $301.4 million in the prior-year period. Comparable store sales increased 2.6% when compared with the same period of fiscal 2003. For the 39-week period, the Company reported a net loss of $436,000, or $0.03 per diluted share, compared with a net loss of $4.5 million, or $0.28 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 $3.3 million, or $0.20 per diluted share.
Commenting on the results, Clyde B. Anderson, Chairman and Chief Executive Officer, said, "One of the best title lineups in years resulted in strong comparable store sales increases during the quarter. Bestsellers in several categories, along with the performance of our Joe Muggs cafes, contributed to our success during the quarter. Diet and Health was one of the leading categories, led by The South Beach Diet and Dr. Phil McGraw's The Ultimate Weight Loss Solution. Fiction performed well with strong sales from Dan Brown's The Da Vinci Code, John Grisham's Bleachers, and The Wedding by Nicholas Sparks. In the inspiration category, Purpose Driven Life dominated. Politics provided dueling bestsellers from comedian Al Franken and talk show host Bill O'Reilly."
The strong title lineup released during the third quarter should continue to perform well into the holiday selling season. That lineup, combined with several upcoming new titles, is expected to lead to improved comparable store sales versus last year's fourth quarter.
Books-A-Million is one of the nation's leading book retailers and sells on the Internet at www.booksamillion.com. The Company presently operates 204 stores in 18 states and the District of Columbia. The Company operates three distinct store formats, including large superstores operating under the names Books-A-Million and Books & Co., traditional bookstores, operating under the name Bookland and Books-A-Million, and Joe Muggs Newsstands. The Company's wholesale operations include American Wholesale Book Company and Book$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 39 Weeks Ended
------------------- -------------------
Nov. 1, Nov. 2, Nov. 1, Nov. 2,
2003 2002 2003 2002
-------- -------- -------- --------
NET SALES $103,067 $ 96,694 $315,385 $301,426
Cost of sales (including
warehouse, distribution
and store occupancy
costs) 76,720 73,952 233,106 223,163
-------- -------- -------- --------
GROSS PROFIT 26,347 22,742 82,279 78,263
Operating, selling and
administrative expenses 22,899 21,774 68,308 68,255
Depreciation and
amortization 3,864 4,078 11,881 11,966
-------- -------- -------- --------
OPERATING INCOME (LOSS) (416) (3,110) 2,090 (1,958)
Interest expense, net 747 1,274 2,464 3,208
-------- -------- -------- --------
LOSS FROM CONTINUING
OPERATIONS BEFORE
INCOME TAXES AND
CUMULATIVE EFFECT
OF CHANGE IN
ACCOUNTING PRINCIPLE (1,163) (4,384) (374) (5,166)
Income tax benefit (442) (1,667) (142) (1,964)
-------- -------- -------- --------
LOSS FROM CONTINUING
OPERATIONS BEFORE
CUMULATIVE EFFECT
OF A CHANGE IN
ACCOUNTING PRINCIPLE (721) (2,717) (232) (3,202)
DISCONTINUED OPERATIONS:
Loss from discontinued
operations (including
loss on disposal) (54) (60) (329) (143)
Income tax benefit (20) (22) (125) (54)
-------- -------- -------- --------
LOSS FROM DISCONTINUED
OPERATIONS (34) (38) (204) (89)
-------- -------- -------- --------
INCOME (LOSS) BEFORE
CUMULATIVE EFFECT
OF A CHANGE IN
ACCOUNTING PRINCIPLE (755) (2,755) (436) (3,291)
Cumulative effect of a
change in accounting
principle, net of
income taxes -- -- -- (1,201)
-------- -------- -------- --------
NET LOSS $ (755) $ (2,755) $ (436) $ (4,492)
======== ======== ======== ========
NET LOSS PER COMMON SHARE:
Basic:
Loss from continuing
operations before
cumulative effect of a
change in accounting
principle $ (0.05) $ (0.17) $ (0.02) $ (0.19)
Loss from discontinued
operations (0.00) (0.00) (0.01) (0.01)
-------- -------- -------- --------
Loss before cumulative
effect of a change in
accounting principle (0.05) (0.17) (0.03) (0.20)
Cumulative effect of a
change in accounting
principle 0.00 0.00 0.00 (0.08)
-------- -------- -------- --------
Net loss $ (0.05) $ (0.17) $ (0.03) $ (0.28)
======== ======== ======== ========
Diluted:
Loss from continuing
operations before
effect of a change in
accounting principle $ (0.05) $ (0.17) $ (0.02) $ (0.19)
Loss from discontinued
operations (0.00) (0.00) (0.01) (0.01)
-------- -------- -------- --------
Loss before cumulative
effect of a change in
accounting principle (0.05) (0.17) (0.03) (0.20)
Cumulative effect of a
change in accounting
principle 0.00 0.00 0.00 (0.08)
-------- -------- -------- --------
Net loss $ (0.05) $ (0.17) $ (0.03) $ (0.28)
======== ======== ======== ========
Weighted average shares
outstanding:
Basic 16,278 16,200 16,249 16,187
======== ======== ======== ========
Diluted 16,278 16,200 16,249 16,187
======== ======== ======== ========
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.