Fiscal 2000 was a very successful year for Books-A-Million. Net sales once again reached record levels as we crossed the $400 million threshold, and comparable store sales increased 8.2%.

Net sales for the 52-weeks ended January 29, 2000, increased 16.1% to a record $404.1 million. Earnings before interest, taxes and depreciation increased 11.9% to $27.6 million for fiscal 2000. Net income for the year was $5.9 million, or $0.33 per diluted share, compared with $4.5 million, or $0.26 per diluted share, a year ago.

Our balance sheet remains strong and continues to offer flexibility for growth. Stockholders' equity rose to $121.4 million and long-term debt was down $1.0 million from the prior year to $35.9 million. The Company's total debt was 23.1% of total capitalization. Capital expenditures were $13.5 million in fiscal 2000, the majority of which was spent on new store construction. At year-end we were operating 180 bookstores in 17 states.

This year, we've made our annual report available on the Internet at our new corporate website. We hope you will visit us at www.booksamillioninc.com. You will find a number of helpful links and features there, including a store finder. We invite you to visit one of our stores soon and to shop our Internet store at www.booksamillion.com.

Fiscal 2000 will be a good benchmark as we proceed into the 21st century. We hope to continue our upward progress in store growth, financial results and profitability, and thank our stockholders, associates and customers for your loyalty and support.

Sincerely,

Clyde B. Anderson
Chairman and Chief Executive Officer