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 Barnes & Noble Reports Fiscal 2017 Third Quarter Financial Results
   Thursday, March 02, 2017 8:30:01 AM ET

Barnes & Noble, Inc. (BKS ) today reported sales and earnings for its fiscal 2017 third quarter ended January 28, 2017.

Total sales for the third quarter were $1.3 billion, declining 8.0% as compared to the prior year. Retail sales, which include Barnes & Noble stores and BN.com, declined 7.5% to $1.3 billion for the quarter. Comparable store sales declined 8.3% for the quarter largely due to lower traffic, as well as the decline in coloring books, artist supplies and last year’s best-selling album by Adele, which collectively accounted for nearly one third of the sales decline. Online sales increased 2.2% for the period. NOOK(R) sales, which include digital content, devices and accessories, declined 25.7% to $38.4 million for the quarter.



Consolidated third quarter net earnings were $70.3 million, or $0.96 per share, as compared to the prior year net earnings of $80.3 million, or $1.04 per share. For the quarter, Retail generated operating income of $135.0 million, while NOOK incurred an operating loss of $6.2 million, for a total operating income of $128.8 million.

Consolidated third quarter EBITDA was $157.8 million, as compared to $169.0 million a year ago. NOOK EBITDA losses of $2.4 million improved $8.8 million over the prior year, as the Company continues to reduce NOOK expenses. Retail EBITDA of $160.2 million declined $19.9 million on the sales decline.

The Company ended the third quarter with borrowings of $18.2 million under its $750 million credit facility.

Return of Capital

During the quarter, the Company returned $14.4 million in cash to its shareholders, including $10.9 million in dividends and $3.5 million through share repurchases. The Company acquired approximately 311,000 shares at an average price of $11.23 during the quarter, completing its $50 million stock repurchase program.

Outlook

Despite sales improvements post-holiday, trends softened in late January and into the fourth quarter. As a result, the Company now expects full year fiscal 2017 comparable store sales to decline approximately 7%, and consolidated EBITDA to be in a range of $180 million to $190 million, excluding the impact of any charges related to its cost reduction initiatives and costs associated with the CEO departure. Fiscal 2017 Retail EBITDA is now expected to be in a range of $200 million to $210 million, while NOOK’s EBITDA loss has improved and is now expected to be approximately $20 million, which includes previously announced transitional costs.

Conference Call

A conference call with Barnes & Noble, Inc.’s senior management will be webcast beginning at 10:00 A.M. ET on Thursday, March 2, 2017, and is accessible at investors.barnesandnobleinc.com.

Barnes & Noble, Inc. will report fiscal 2017 fourth quarter results on or about June 22, 2017.

About Barnes & Noble, Inc.

Barnes & Noble, Inc. (BKS ) is a Fortune 500 company, the nation’s largest retail bookseller, and a leading retailer of content, digital media and educational products. The Company operates 634 Barnes & Noble bookstores in 50 states, and one of the Web’s premier e-commerce sites, BN.com (www.bn.com). The Nook Digital business offers a lineup of popular NOOK(R) tablets and eReaders and an expansive collection of digital reading and entertainment content through the NOOK Store(R). The NOOK Store features more than 4.5 million digital books in the US (www.nook.com), plus periodicals and comics, and offers the ability to enjoy content across a wide array of popular devices through Free NOOK Reading Apps(TM) available for Android(TM), iOS(R) and Windows(R).

General information on Barnes & Noble, Inc. can be obtained by visiting the Company’s corporate website at www.barnesandnobleinc.com.

BKS - Financial

Forward-Looking Statements

This press release contains certain forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) and information relating to Barnes & Noble that are based on the beliefs of the management of Barnes & Noble as well as assumptions made by and information currently available to the management of Barnes & Noble. When used in this communication, the words "anticipate," "believe," "estimate," "expect," "intend," "plan," "will," "forecasts," "projections," and similar expressions, as they relate to Barnes & Noble or the management of Barnes & Noble, identify forward-looking statements.

Such statements reflect the current views of Barnes & Noble with respect to future events, the outcome of which is subject to certain risks, including, among others, the general economic environment and consumer spending patterns, decreased consumer demand for Barnes & Noble’s products, low growth or declining sales and net income due to various factors, including store closings, higher-than-anticipated or increasing costs, including with respect to store closings, relocation, occupancy (including in connection with lease renewals) and labor costs, the effects of competition, the risk of insufficient access to financing to implement future business initiatives, risks associated with data privacy and information security, risks associated with Barnes & Noble’s supply chain, including possible delays and disruptions and increases in shipping rates, various risks associated with the digital business, including the possible loss of customers, declines in digital content sales, risks and costs associated with ongoing efforts to rationalize the digital business and the digital business not being able to perform its obligations under the Samsung commercial agreement and the consequences thereof, the risk that financial and operational forecasts and projections are not achieved, the performance of Barnes & Noble’s initiatives including but not limited to its new store concept and e-commerce initiatives, unanticipated adverse litigation results or effects, potential infringement of Barnes & Noble’s intellectual property by third parties or by Barnes & Noble of the intellectual property of third parties, and other factors, including those factors discussed in detail in Item 1A, "Risk Factors," in Barnes & Noble’s Annual Report on Form 10-K for the fiscal year ended April 30, 2016, and in Barnes & Noble’s other filings made hereafter from time to time with the SEC.

Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those described as anticipated, believed, estimated, expected, intended or planned. Subsequent written and oral forward-looking statements attributable to Barnes & Noble or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements in this paragraph. Barnes & Noble undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this communication.

                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                BARNES & NOBLE, INC. AND SUBSIDIARIES
                                                                                                                                                                                                                                Consolidated Statements of Operations
                                                                                                                                                                                                                                (In thousands, except per share data)
                                                                                                                                                                                                                                     (Unaudited)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
                                                                  
------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                   13 weeks ended                                                                                 13 weeks ended                                                                                                     39 weeks ended                                                                                           39 weeks ended
                                                                                                                                  January 28, 2017                                                                                         January 30, 2016                                                                                         January 28, 2017                                                                                         January 30, 2016
                                                                                                           ---------------------------------------------------------------                                          ---------------------------------------------------------------                                          ---------------------------------------------------------------                                          ---------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
Sales                                                                                                      $                               1,300,908                                                                $                               1,413,947                                                                $                               3,073,338                                                                $                               3,287,160
Cost of sales and occupancy                                                                                               864,107                                                            922,292                                                          2,103,623                                                          2,225,621  
                                                                                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
   Gross profit                                                                                                           436,801                                                            491,655                                                            969,715                                                          1,061,539  
                                                                                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
Selling and administrative expenses                                                                                                          278,962                                                                                                  322,652                                                                                                  801,499                                                                                                  885,063
Depreciation and amortization                                                                                              29,052                                                             35,147                                                             90,083                                                            103,864  
                                                                                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
   Operating income                                                                                                                          128,787                                                                                                  133,856                                                                                                   78,133                                                                                                   72,612
Interest expense, net                                                                                                       2,076                                                              1,976                                                              5,666                                                              7,233  
                                                                                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
    Income before taxes                                                                                                                      126,711                                                                                                  131,880                                                                                                   72,467                                                                                                   65,379
Income taxes                                                                                                               56,435                                                             51,618                                                             37,016                                                             20,071  
                                                                                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
     Net income from continuing operations                                                                                                    70,276                                                                                                   80,262                                                                                                   35,451                                                                                                   45,308
Loss from discontinued operations                                                                                               -                                                                  -                                                                  -                                                            (39,146 )
                                                                                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
     Net income                                                                                            $                                  70,276                                             $                                  80,262                                             $                                  35,451                                             $                                   6,162  
                                                                                                           ==================== ==================== ====================                                           ==================== ==================== ====================                                           ==================== ==================== ====================                                           ==================== ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
Basic income (loss) per common share:
      Income from continuing operations                                                                    $                                    0.97                                                                $                                    1.04                                                                $                                    0.48                                                                $                                    0.48
      Loss from discontinued operations                                                                                         -                                                                  -                                                                  -                                                              (0.54 )
                                                                                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
    Basic income (loss) per common share                                                                   $                                    0.97                                             $                                    1.04                                             $                                    0.48                                             $                                   (0.06 )
                                                                                                           ==================== ==================== ====================                                           ==================== ==================== ====================                                           ==================== ==================== ====================                                           ==================== ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
Diluted income (loss) per common share:
      Income from continuing operations                                                                    $                                    0.96                                                                $                                    1.04                                                                $                                    0.48                                                                $                                    0.48
      Loss from discontinued operations                                                                                         -                                                                  -                                                                  -                                                              (0.54 )
                                                                                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
    Diluted income (loss) per common share                                                                 $                                    0.96                                             $                                    1.04                                             $                                    0.48                                             $                                   (0.06 )
                                                                                                           ==================== ==================== ====================                                           ==================== ==================== ====================                                           ==================== ==================== ====================                                           ==================== ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
Weighted average common shares outstanding:
   Basic                                                                                                                                      71,581                                                                                                   74,856                                                                                                   72,232                                                                                                   71,987
   Diluted                                                                                                                                    71,714                                                                                                   74,924                                                                                                   72,387                                                                                                   72,124
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
Dividends declared per common share                                                                        $                                    0.15                                                                $                                    0.15                                                                $                                    0.45                                                                $                                    0.45
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
Percentage of sales:
Sales                                                                                                                                          100.0 %                                                                                                  100.0 %                                                                                                  100.0 %                                                                                                  100.0 %
Cost of sales and occupancy                                                                                                  66.4 %                                                                                65.2 %                                                                                68.4 %                                                                                67.7 %
                                                                                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
   Gross profit                                                                                                              33.6 %                                                                                34.8 %                                                                                31.6 %                                                                                32.3 %
                                                                                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
Selling and administrative expenses                                                                                                             21.4 %                                                                                                   22.8 %                                                                                                   26.1 %                                                                                                   26.9 %
Depreciation and amortization                                                                                                 2.2 %                                                                                 2.5 %                                                                                 2.9 %                                                                                 3.2 %
                                                                                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
   Operating income                                                                                                                              9.9 %                                                                                                    9.5 %                                                                                                    2.5 %                                                                                                    2.2 %
Interest expense, net                                                                                                         0.2 %                                                                                 0.1 %                                                                                 0.2 %                                                                                 0.2 %
                                                                                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
    Income before taxes                                                                                                                          9.7 %                                                                                                    9.3 %                                                                                                    2.4 %                                                                                                    2.0 %
Income taxes                                                                                                                  4.3 %                                                                                 3.7 %                                                                                 1.2 %                                                                                 0.6 %
                                                                                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
     Net income from continuing operations                                                                                                       5.4 %                                                                                                    5.7 %                                                                                                    1.2 %                                                                                                    1.4 %
Loss from discontinued operations                                                                                             0.0 %                                                                                 0.0 %                                                                                 0.0 %                                                                                -1.2 %
                                                                                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
     Net income                                                                                                                                  5.4 %                                                                                                    5.7 %                                                                                                    1.2 %                                                                                                    0.2 %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
                                                                                                                                                                                                                                                                     
                                                                                                                                                                                                                                     BARNES & NOBLE, INC. AND SUBSIDIARIES
                                                                                                                                                                                                                                     Segment Information
                                                                                                                                                                                                                                     (In thousands)
                                                                                                                                                                                                                                     (Unaudited)
                                                          
-------------------- --------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                              13 weeks ended                                                                                           13 weeks ended                                                                                           39 weeks ended                                                                                           39 weeks ended
                                                                                                                                             January 28, 2017                                                                                         January 30, 2016                                                                                         January 28, 2017                                                                                         January 30, 2016
                                                                                                                      ---------------------------------------------------------------                                          ---------------------------------------------------------------                                          ---------------------------------------------------------------                                          ---------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
Sales
-------------------------------------------------------
                     Retail                                                                                           $                               1,276,039                                                                $                               1,378,887                                                                $                               2,988,471                                                                $                               3,178,590
                     NOOK                                                                                                                                38,434                                                                                                   51,737                                                                                                  114,524                                                                                                  149,568
                     Elimination                                                                                                     (13,565 )                                                                             (16,677 )                                                                             (29,657 )                                                                             (40,998 )
                                                                                                                      -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
Total                                                                                                                 $                               1,300,908                                             $                               1,413,947                                             $                               3,073,338                                             $                               3,287,160  
                                                                                                                      ==================== ==================== ====================                                           ==================== ==================== ====================                                           ==================== ==================== ====================                                           ==================== ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
Gross Profit
-------------------------------------------------------
                     Retail                                                                                           $                                 422,251                                                                $                                 474,595                                                                $                                 919,473                                                                $                               1,009,598
                     NOOK                                                                                                             14,550                                                             17,060                                                             50,242                                                             51,941  
                                                                                                                      -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
Total                                                                                                                 $                                 436,801                                             $                                 491,655                                             $                                 969,715                                             $                               1,061,539  
                                                                                                                      ==================== ==================== ====================                                           ==================== ==================== ====================                                           ==================== ==================== ====================                                           ==================== ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
Selling and Administrative Expenses
-------------------------------------------------------
                     Retail                                                                                           $                                 262,024                                                                $                                 294,438                                                                $                                 738,176                                                                $                                 783,353
                     NOOK                                                                                                             16,938                                                             28,214                                                             63,323                                                            101,710  
                                                                                                                      -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
Total                                                                                                                 $                                 278,962                                             $                                 322,652                                             $                                 801,499                                             $                                 885,063  
                                                                                                                      ==================== ==================== ====================                                           ==================== ==================== ====================                                           ==================== ==================== ====================                                           ==================== ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
EBITDA
-------------------------------------------------------
                     Retail                                                                                           $                                 160,227                                                                $                                 180,157                                                                $                                 181,297                                                                $                                 226,245
                     NOOK                                                                                                             (2,388 )                                                                             (11,154 )                                                                             (13,081 )                                                                             (49,769 )
                                                                                                                      -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
Total                                                                                                                 $                                 157,839                                             $                                 169,003                                             $                                 168,216                                             $                                 176,476  
                                                                                                                      ==================== ==================== ====================                                           ==================== ==================== ====================                                           ==================== ==================== ====================                                           ==================== ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
Depreciation and Amortization
-------------------------------------------------------
                     Retail                                                                                           $                                 (25,236 )                                                              $                                 (26,853 )                                                              $                                 (74,756 )                                                              $                                 (78,079 )
                     NOOK                                                                                                             (3,816 )                                                                              (8,294 )                                                                             (15,327 )                                                                             (25,785 )
                                                                                                                      -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
Total                                                                                                                 $                                 (29,052 )                                                              $                                 (35,147 )                                                              $                                 (90,083 )                                                              $                                (103,864 )
                                                                                                                      ==================== ==================== ====================                                           ==================== ==================== ====================                                           ==================== ==================== ====================                                           ==================== ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
Operating Income (Loss)
-------------------------------------------------------
                     Retail                                                                                           $                                 134,991                                                                $                                 153,304                                                                $                                 106,541                                                                $                                 148,166
                     NOOK                                                                                                             (6,204 )                                                                             (19,448 )                                                                             (28,408 )                                                                             (75,554 )
                                                                                                                      -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
Total                                                                                                                 $                                 128,787                                             $                                 133,856                                             $                                  78,133                                             $                                  72,612  
                                                                                                                      ==================== ==================== ====================                                           ==================== ==================== ====================                                           ==================== ==================== ====================                                           ==================== ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
Net Income
-------------------------------------------------------
                     Operating income                                                                                 $                                 128,787                                                                $                                 133,856                                                                $                                  78,133                                                                $                                  72,612
                     Interest expense, net                                                                                                               (2,076 )                                                                                                 (1,976 )                                                                                                 (5,666 )                                                                                                 (7,233 )
                     Income taxes                                                                                                                       (56,435 )                                                                                                (51,618 )                                                                                                (37,016 )                                                                                                (20,071 )
                     Loss from discontinued operations                                                                                     -                                                                  -                                                                  -                                                            (39,146 )
                                                                                                                      -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
Total                                                                                                                 $                                  70,276                                             $                                  80,262                                             $                                  35,451                                             $                                   6,162  
                                                                                                                      ==================== ==================== ====================                                           ==================== ==================== ====================                                           ==================== ==================== ====================                                           ==================== ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
Percentage of sales:
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
Gross Margin
-------------------------------------------------------
                     Retail                                                                                                                                33.1 %                                                                                                   34.4 %                                                                                                   30.8 %                                                                                                   31.8 %
                     NOOK                                                                                                               58.5 %                                                                                48.7 %                                                                                59.2 %                                                                                47.8 %
                                                                                                                      -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
Total                                                                                                                                                      33.6 %                                                                                                   34.8 %                                                                                                   31.6 %                                                                                                   32.3 %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
Selling and Administrative Expenses
-------------------------------------------------------
                     Retail                                                                                                                                20.5 %                                                                                                   21.4 %                                                                                                   24.7 %                                                                                                   24.6 %
                     NOOK                                                                                                               68.1 %                                                                                80.5 %                                                                                74.6 %                                                                                93.7 %
                                                                                                                      -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
Total                                                                                                                                                      21.4 %                                                                                                   22.8 %                                                                                                   26.1 %                                                                                                   26.9 %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
EBITDA
-------------------------------------------------------
                     Retail                                                                                                                                12.6 %                                                                                                   13.1 %                                                                                                    6.1 %                                                                                                    7.1 %
                     NOOK                                                                                                               -9.6 %                                                                               -31.8 %                                                                               -15.4 %                                                                               -45.8 %
                                                                                                                      -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
Total                                                                                                                                                      12.1 %                                                                                                   12.0 %                                                                                                    5.5 %                                                                                                    5.4 %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
Depreciation and Amortization
-------------------------------------------------------
                     Retail                                                                                                                                -2.0 %                                                                                                   -1.9 %                                                                                                   -2.5 %                                                                                                   -2.5 %
                     NOOK                                                                                                              -15.3 %                                                                               -23.7 %                                                                               -18.1 %                                                                               -23.7 %
                                                                                                                      -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
Total                                                                                                                                                      -2.2 %                                                                                                   -2.5 %                                                                                                   -2.9 %                                                                                                   -3.2 %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
Operating Income (Loss)
-------------------------------------------------------
                     Retail                                                                                                                                10.6 %                                                                                                   11.1 %                                                                                                    3.6 %                                                                                                    4.7 %
                     NOOK                                                                                                              -24.9 %                                                                               -55.5 %                                                                               -33.5 %                                                                               -69.6 %
                                                                                                                      -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
Total                                                                                                                                                       9.9 %                                                                                                    9.5 %                                                                                                    2.5 %                                                                                                    2.2 %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                           
                                                                                                                                   BARNES & NOBLE, INC. AND SUBSIDIARIES
                                                                                                                                        Consolidated Balance Sheets
                                                                                                                                              (In thousands)
                                                                                                                                                (Unaudited)
                                                                     
------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                         January 28, 2017                                                                                         January 30, 2016
                                                                                                                                  ---------------------------------------------------------------                                          ---------------------------------------------------------------
                                                                                                                                                                                                                                                                                      
         ASSETS
Current assets:
   Cash and cash equivalents                                                                                                      $                                  11,628                                                                $                                  63,557
   Receivables, net                                                                                                                                                  70,434                                                                                                   69,364
   Merchandise inventories, net                                                                                                                                   1,010,343                                                                                                1,043,930
   Prepaid expenses and other current assets                                                                                                      62,164                                                             66,674  
                                                                                                                                  -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
        Total current assets                                                                                                                   1,154,569                                                          1,243,525  
                                                                                                                                  -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                      
Property and equipment:
   Land and land improvements                                                                                                                                         2,541                                                                                                    2,541
   Buildings and leasehold improvements                                                                                                                           1,060,416                                                                                                1,047,357
   Fixtures and equipment                                                                                                                      1,597,435                                                          1,571,457  
                                                                                                                                  -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
                                                                                                                                                                  2,660,392                                                                                                2,621,355
   Less accumulated depreciation and amortization                                                                                              2,378,925                                                          2,314,176  
                                                                                                                                  -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
      Net property and equipment                                                                                                                 281,467                                                            307,179  
                                                                                                                                  -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                      
Goodwill                                                                                                                                                            211,276                                                                                                  215,197
Intangible assets, net                                                                                                                                              310,369                                                                                                  311,066
Other non-current assets                                                                                                                          11,275                                                             11,637  
                                                                                                                                  -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
   Total assets                                                                                                                   $                               1,968,956                                             $                               2,088,604  
                                                                                                                                  ==================== ==================== ====================                                           ==================== ==================== ====================
                                                                                                                                                                                                                                                                                      
          LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
   Accounts payable                                                                                                               $                                 500,751                                                                $                                 576,958
   Accrued liabilities                                                                                                                                              319,145                                                                                                  334,314
   Gift card liabilities                                                                                                                         384,830                                                            384,915  
                                                                                                                                  -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
      Total current liabilities                                                                                                                1,204,726                                                          1,296,187  
                                                                                                                                  -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                      
Long-term debt                                                                                                                                                       18,200                                                                                                        -
Deferred taxes                                                                                                                                                       54,290                                                                                                   16,289
Other long-term liabilities                                                                                                                                         105,212                                                                                                  138,668
                                                                                                                                                                                                                                                                                      
Shareholders’ equity:
   Common stock; $0.001 par value; 300,000 shares authorized;
    111,648 and 110,740 shares issued, respectively                                                                                                                     112                                                                                                      111
   Additional paid-in capital                                                                                                                                     1,743,562                                                                                                1,734,898
   Accumulated other comprehensive income (loss)                                                                                                                        198                                                                                                  (16,533 )
   Retained earnings                                                                                                                                                (22,045 )                                                                                                 17,629
   Treasury stock, at cost, 40,093 and 36,797 shares, respectively                                                                            (1,135,299 )                                                                          (1,098,645 )
                                                                                                                                  -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
      Total Barnes & Noble, Inc. shareholders’ equity                                                                                            586,528                                                            637,460  
                                                                                                                                  -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
Commitments and contingencies                                                                                                                          -                                                                  -  
                                                                                                                                  -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
   Total liabilities and shareholders’ equity                                                                                     $                               1,968,956                                             $                               2,088,604  
                                                                                                                                  ==================== ==================== ====================                                           ==================== ==================== ====================
                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                       
                                                                                                                                                                                                                                     BARNES & NOBLE, INC. AND SUBSIDIARIES
                                                                                                                                                                                                                                     Earnings (Loss) Per Share
                                                                                                                                                                                                                                     (In thousands, except per share data)
                                                                                                                                                                                                                                     (Unaudited)
                                                                                               
------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                13 weeks ended                                                                                           13 weeks ended                                                                                           39 weeks ended                                                                                           39 weeks ended
                                                                                                                                                               January 28, 2017                                                                                         January 30, 2016                                                                                         January 28, 2017                                                                                         January 30, 2016
                                                                                                                                        ---------------------------------------------------------------                                          ---------------------------------------------------------------                                          ---------------------------------------------------------------                                          ---------------------------------------------------------------
Numerator for basic income (loss) per share:
Net income from continuing operations                                                                                                   $                                  70,276                                                                $                                  80,262                                                                $                                  35,451                                                                $                                  45,308
   Inducement fee paid upon conversion of Series J preferred stock                                                                                                              -                                                                                                        -                                                                                                        -                                                                                                   (3,657 )
   Preferred stock dividends paid in shares                                                                                                                                     -                                                                                                        -                                                                                                        -                                                                                                   (1,783 )
   Accretion of dividends on preferred stock                                                                                                                                    -                                                                                                        -                                                                                                        -                                                                                                   (4,204 )
   Less allocation of dividends to participating securities                                                                                                                  (168 )                                                                                                   (307 )                                                                                                   (559 )                                                                                                   (999 )
   Less allocation of undistributed earnings to participating securities                                                                                  (948 )                                                                              (1,871 )                                                                                 (42 )                                                                                   -  
                                                                                                                                        -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
Net income from continuing operations available to common                                                                               $                                  69,160                                                                $                                  78,084                                                                $                                  34,850                                                                $                                  34,665
shareholders
Net loss from discontinued operations available to common                                                                                                    -                                                                  -                                                                  -                                                            (39,146 )
shareholders
                                                                                                                                        -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
Net income (loss) available to common shareholders                                                                                      $                                  69,160                                             $                                  78,084                                             $                                  34,850                                             $                                  (4,481 )
                                                                                                                                        ==================== ==================== ====================                                           ==================== ==================== ====================                                           ==================== ==================== ====================                                           ==================== ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
Numerator for diluted income (loss) per share:
Net income from continuing operations available to common                                                                               $                                  69,160                                                                $                                  78,084                                                                $                                  34,850                                                                $                                  34,665
shareholders
   Accretion of dividends on preferred stock (a)                                                                                                                                -                                                                                                        -                                                                                                        -                                                                                                        -
   Allocation of undistributed earnings to participating securities                                                                                                           948                                                                                                    1,871                                                                                                       42                                                                                                        -
   Less diluted allocation of undistributed earnings to participating                                                                                     (946 )                                                                              (1,869 )                                                                                 (42 )                                                                                   -  
   securities
                                                                                                                                        -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
Net income from continuing operations available to common                                                                                                                  69,162                                                                                                   78,086                                                                                                   34,850                                                                                                   34,665
shareholders
Net loss from discontinued operations available to common                                                                                                    -                                                                  -                                                                  -                                                            (39,146 )
shareholders
                                                                                                                                        -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
Net income (loss) available to common shareholders                                                                                      $                                  69,162                                             $                                  78,086                                             $                                  34,850                                             $                                  (4,481 )
                                                                                                                                        ==================== ==================== ====================                                           ==================== ==================== ====================                                           ==================== ==================== ====================                                           ==================== ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
Denominator for basic income (loss) per share:
Basic weighted average common shares                                                                                                                                       71,581                                                                                                   74,856                                                                                                   72,232                                                                                                   71,987
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
Denominator for diluted income (loss) per share:
Basic weighted average common shares                                                                                                                                       71,581                                                                                                   74,856                                                                                                   72,232                                                                                                   71,987
   Average dilutive options                                                                                                                                                    68                                                                                                       68                                                                                                       77                                                                                                      136
   Average dilutive non-participating securities                                                                                                            65                                                                  -                                                                 78                                                                  1  
                                                                                                                                        -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
Diluted weighted average common shares                                                                                                                  71,714                                                             74,924                                                             72,387                                                             72,124  
                                                                                                                                        ==================== ==================== ====================                                           ==================== ==================== ====================                                           ==================== ==================== ====================                                           ==================== ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
Basic income (loss) per common share:
   Income from continuing operations                                                                                                    $                                    0.97                                                                $                                    1.04                                                                $                                    0.48                                                                $                                    0.48
   Loss from discontinued operations                                                                                                                         -                                                                  -                                                                  -                                                              (0.54 )
                                                                                                                                        -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
Basic income (loss) per common share                                                                                                    $                                    0.97                                             $                                    1.04                                             $                                    0.48                                             $                                   (0.06 )
                                                                                                                                        ==================== ==================== ====================                                           ==================== ==================== ====================                                           ==================== ==================== ====================                                           ==================== ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
Diluted income (loss) per common share:
   Income from continuing operations                                                                                                    $                                    0.96                                                                $                                    1.04                                                                $                                    0.48                                                                $                                    0.48
   Loss from discontinued operations                                                                                                                         -                                                                  -                                                                  -                                                              (0.54 )
                                                                                                                                        -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
Diluted income (loss) per common share                                                                                                  $                                    0.96                                             $                                    1.04                                             $                                    0.48                                             $                                   (0.06 )
                                                                                                                                        ==================== ==================== ====================                                           ==================== ==================== ====================                                           ==================== ==================== ====================                                           ==================== ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
(a)   Although the Company was in a net income position during the 39
                         weeks ended January 30, 2016, the dilutive effect of the Company’s
                         convertible preferred shares was excluded from the calculation of
                         income per share using the two-class method because the effect would
                         be antidilutive.
                          
                                                                                                                           
                                                                                                                           BARNES & NOBLE, INC. AND SUBSIDIARIES
                                                                                                                     Forward-Looking Statement Non-GAAP Reconciliation
                                                                                                                                       (In millions)
                                                                                                                                        (Unaudited)
                                  
-------------------- ----------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                      
                                                                                                                                                                                            Forward-Looking Range
                                                                                                                  ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                      
EBITDA
---------------------------------------------------
                     Retail                                                                                       $                                     200                                                                $                                     210
                     NOOK                                                                                                            (20 )                                                                                 (20 )
                                                                                                                  -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
Total                                                                                                             $                                     180                                             $                                     190  
                                                                                                                  ==================== ==================== ====================                                           ==================== ==================== ====================
                                                                                                                                                                                                                                                                      
                     Charges (a)                                                                                                                         12                                                                                                       12
                                                                                                                                                                                                                                                                      
Operating Profit
---------------------------------------------------
                     EBITDA                                                                                       $                                     168                                                                $                                     178
                     Depreciation and amortization                                                                                  (118 )                                                                                (118 )
                                                                                                                  -------------------- -------------------- --------------------                                           -------------------- -------------------- --------------------
Total                                                                                                             $                                      50                                             $                                      60  
                                                                                                                  ==================== ==================== ====================                                           ==================== ==================== ====================
                                                                                                                                                                                                                                                                      
(a)   Charges related to its cost reduction initiatives and costs
                         associated with the CEO departure.
                          

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20170302005702r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20170302005702/en/

SOURCE: Barnes & Noble, Inc.

Barnes & Noble, Inc. 
Media: 
Mary Ellen Keating, 212-633-3323 
Senior Vice President 
Corporate Communications 
mkeating@bn.com 
or 
Investors: 
Andy Milevoj, 212-633-3489 
Vice President, Investor Relations 
amilevoj@bn.com


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