Barnes & Noble Education (NYSE: BNED) reported Q4 EPS of ($0.84), $0.36 worse than the analyst estimate of ($0.48). Revenue for the quarter came in at $256.9 million versus the consensus estimate of $220.54 million.

Financial results for the fourth quarter and fiscal year 2020:

• Consolidated fourth quarter sales of $256.9 million decreased 23.2% as compared to the prior year period; fiscal year 2020 consolidated sales of $1,851.1 million decreased 9.0% as compared to the prior year.
• Consolidated fourth quarter GAAP net loss was $(40.3) million, compared to a net loss of $(46.2) million in the prior year period. Consolidated fiscal year 2020 GAAP net loss was $(38.3) million, compared to a net loss of $(24.4) million in the prior year.
• Consolidated fourth quarter non-GAAP Adjusted EBITDA loss was $(20.7) million, compared to non-GAAP Adjusted EBITDA of $19.7 million in the prior year; fiscal year 2020 consolidated non-GAAP Adjusted EBITDA was $42.2 million, compared to non-GAAP Adjusted EBITDA of $104.9 million in the prior year.
• Consolidated fourth quarter non-GAAP Adjusted Earnings was $(28.1) million, compared to non-GAAP Adjusted Earnings of $0.5 million in the prior year period; fiscal year 2020 consolidated non-GAAP Adjusted Earnings was $(21.1) million, compared to non-GAAP Adjusted Earnings of $25.4 million in the prior year.

Operational highlights for the fiscal year 2020:

• Progressed on the execution of a number of strategic initiatives; all of which remained on target prior to the onset of the COVID-19 pandemic, which has accelerated the demand and need to scale such key initiatives.
• Continued to drive subscriptions for the Company’s bartleby® suite of solutions, gaining more than 170,000 subscribers in fiscal year 2020, representing over 200% growth over fiscal year 2019 new subscribers.
• Achieved a six-fold increase in fiscal year 2020 bartleby revenue versus prior year; bartleby peak Spring traffic increased over 10x year-over-year and almost 3x versus peak Fall traffic.
• Completed initial build of the Company’s next generation eCommerce platform; recently executed selective launch with expected further roll-out throughout fiscal year 2021 to grow increased high-margin general merchandise sales.
• Continued to grow the BNC First Day® inclusive access programs, with revenue increasing 91% year-over-year.
• Increased adoption of BNC First Day Complete, with eleven campus partners utilizing the complete access model in the upcoming Fall Term 2020, increasing from four in fiscal year 2020.
• Continued to win new business for both physical and virtual bookstores, including the University of Nevada, Reno, Western Kentucky University, Front Range Community College and The City Colleges of Chicago.
• Provided valuable solutions to schools to help mitigate the COVID-19 on-campus learning disruption utilizing BNED’s virtual store offerings and course material fulfillment capabilities, its BNC First Day offering, and its digital bartleby offerings to help students continue to perform while studying remotely.

“As we entered the fourth quarter of fiscal year 2020, we had achieved significant positive progress and market momentum on each of our key strategic initiatives: winning new business to increase our scale; First Day and First Day Complete inclusive access courseware models; the imminent release of our new eCommerce platform to grow general merchandise sales; and the increased awareness and growth of bartleby, our digital self-study platform. Beginning in the middle of the fourth quarter, COVID-19 blindsided our nation and brought with it profound and unprecedented challenges for our higher education partners. Campuses were forced to close, and students and faculty transitioned to online learning mid-semester to complete their coursework. In light of these extraordinary challenges, we adapted our assets and offerings rapidly to respond,” said Michael P. Huseby, CEO and Chairman, BNED. “BNED was able to pivot quickly as a result of the unique strengths of our different businesses, which are all working together to ensure that our customers receive seamless, uninterrupted service as we fight the challenges this pandemic has presented.”

“The strategic decisions and related investments we have made in our general merchandise business, eCommerce platform, virtual fulfillment capabilities and digital solutions, have allowed us to offer customized and increasingly valuable solutions during a period of significant disruption to the traditional learning model,” continued Mr. Huseby. “Our innovative and new solutions to serve schools and students, coupled with our significantly reduced and more flexible cost structure, provide us with the competitive platform necessary to adapt and lead the profound and accelerated change accompanying COVID-19, and to manage our liquidity to weather this crisis of uncertainty. I am extremely proud of both our people and the institutions we serve, who are working together more closely than ever to continue to deliver the highest possible education experience to our students.”

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