Barnes and Noble 2013 Annual Report Download - page 19

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Income tax benefit in fiscal 2013 was $(97.5) million compared
with income tax benefit of $(25.1) million in fiscal 2012.
The Company’s effective tax rate increased to 38.2% in
fiscal 2013 compared with 27.9% in fiscal 2012. The higher
effective tax rate in fiscal 2013 was due primarily to a
significant increase in R&D tax credits and a significant
decrease in the impact of non-deductible compensation
partly offset by an increase in tax reserves and a reduction
in the state tax rate.
The Company evaluates the realizability of the deferred tax
assets on a quarterly basis. As part of this evaluation the
Company reviews all evidence both positive and nega-
tive to determine if a valuation allowance is needed. At
the end of the year, the Company was in a cumulative loss
position but this negative evidence was outweighed by the
positive evidence available and no valuation allowance,
other than those previously recorded against particular
deferred assets, is recorded. The Company’s review of posi-
tive evidence included the review of feasible tax planning
strategies that may be implemented and the reversal of
temporary items. The Company monitors the need for the
additional valuation allowance at each quarter in the future
and if the negative evidence outweighs the positive evi-
dence an allowance will be recorded.
Net Earnings (Loss)
52 weeks ended
Dollars in thousands
April 27,
2013
Diluted
EPS
April 28,
2012
Diluted
EPS
Net Loss $ (157,806) $ (3.02) $ (64,840) $ (1.34)
As a result of the factors discussed above, the Company
reported a consolidated net loss of $(157.8) million (or
$3.02 per diluted share) during fiscal 2013, compared with
consolidated net loss of $(64.8 ) million (or $1.34 per
diluted share) during fiscal 2012.
52 WEEKS ENDED APRIL 28, 2012 COMPARED WITH 52
WEEKS ENDED APRIL 30, 2011
Sales
The following table summarizes the Company’s sales for the
52 weeks ended April 28, 2012 and April 30, 2011:
52 weeks ended
Dollars in thousands
April 28,
2012 % Total
April 30,
2011 % Total
B&N Retail $ 4,852,913 68.1% $4,926,834 70.4%
B&N College 1,743,662 24.4% 1,778,159 25.4%
NOOK 933,471 13.1% 695,182 9.9%
Elimination (400,847) (5.6)% (401,610) (5.7)%
Total Sales $ 7,129,199 100.0% $ 6,998,565 100.0%
The Company’s sales increased $130.6 million, or 1.9%,
during fiscal 2012 to $7.13 billion from $7.00 billion during
fiscal 2011. The increase or (decrease) by segment is as
follows:
•B&N Retail sales for fiscal 2012 decreased $73.9 million,
or 1.5%, to $4.85 billion from $4.92 billion during fiscal
2011, and accounted for 68.1% of total Company sales.
During fiscal 2012 comparable store sales increased
1.4%, which increased sales by $58.1 million, offset
by closed stores that decreased sales by $59.2 million.
Comparable physical book sales, including trade, juve-
nile and bargain, were essentially flat as the Company
benefited from the Borders liquidation. The increase
in comparable store sales was primarily attributable to
the strategic expansion of non-book categories, such
as NOOK® devices and accessories, Toys & Games and
Gift products. B&N Retail also includes its eCommerce
business and third-party sales of Sterling Publishing Co.,
Inc.
•B&N College sales decreased $34.5 million, or 1.9%, to
$1.74 billion during fiscal 2012 from $1.78 billion during
fiscal 2011. The decrease in sales was primarily due to a
higher mix of textbook rentals, which have a lower price
than new or used textbooks. During fiscal 2012 compa-
rable store sales decreased 0.3%, primarily due to lower
textbook sales and partially offset by higher general mer-
chandise sales. Closed stores decreased sales by $38.6
million offset by new B&N College stores contributing to
an increase in sales of $49.9 million.
•NOOK sales increased $238.3 million, or 34.3%, to
$933.5 million during fiscal 2012 from $695.2 million
during fiscal 2011. Comparable sales for NOOK increased
45.0% in fiscal 2012. This increase in sales was primarily
due to higher sales of digital content and hardware.
•The elimination represents sales from NOOK to B&N
Retail and B&N College on a sell through basis.
In fiscal 2012, the Company closed 14 Barnes & Noble
stores, bringing its total number of Barnes & Noble stores
to 691 with 18.0 million square feet. In fiscal 2012, the
Company added 32 B&N College stores and closed 21, end-
ing the period with 647 B&N College stores. As of April 28,
2012, the Company operated 1,338 stores in the fifty states
and the District of Columbia.
2013 Annual Report 17