2015 Q1 Form 10-Q Financial Statement

#000163411716000038 Filed on March 09, 2016

View on sec.gov

Income Statement

Concept 2015 Q1
Revenue $521.6M
YoY Change 7.96%
Cost Of Revenue $399.9M
YoY Change 8.88%
Gross Profit $121.6M
YoY Change 5.03%
Gross Profit Margin 23.32%
Selling, General & Admin $94.69M
YoY Change 13.41%
% of Gross Profit 77.86%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $12.50M
YoY Change 5.04%
% of Gross Profit 10.28%
Operating Expenses $94.69M
YoY Change -0.64%
Operating Profit $14.35M
YoY Change -30.02%
Interest Expense $0.00
YoY Change
% of Operating Profit 0.0%
Other Income/Expense, Net
YoY Change
Pretax Income $14.32M
YoY Change -29.83%
Income Tax $5.665M
% Of Pretax Income 39.57%
Net Earnings $8.650M
YoY Change -28.51%
Net Earnings / Revenue 1.66%
Basic Earnings Per Share $0.09
Diluted Earnings Per Share $0.09
COMMON SHARES
Basic Shares Outstanding 38.92M shares
Diluted Shares Outstanding 38.97M shares

Balance Sheet

Concept 2015 Q1
SHORT-TERM ASSETS
Cash & Short-Term Investments $174.6M
YoY Change
Cash & Equivalents $174.6M
Short-Term Investments
Other Short-Term Assets $30.30M
YoY Change
Inventory $462.1M
Prepaid Expenses
Receivables $188.5M
Other Receivables $0.00
Total Short-Term Assets $925.2M
YoY Change
LONG-TERM ASSETS
Property, Plant & Equipment $104.7M
YoY Change
Goodwill $274.1M
YoY Change
Intangibles $200.8M
YoY Change
Long-Term Investments
YoY Change
Other Assets $34.55M
YoY Change
Total Long-Term Assets $614.1M
YoY Change
TOTAL ASSETS
Total Short-Term Assets $925.2M
Total Long-Term Assets $614.1M
Total Assets $1.539B
YoY Change
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $492.2M
YoY Change
Accrued Expenses $190.8M
YoY Change
Deferred Revenue
YoY Change
Short-Term Debt $0.00
YoY Change
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $683.0M
YoY Change
LONG-TERM LIABILITIES
Long-Term Debt $0.00
YoY Change
Other Long-Term Liabilities $62.67M
YoY Change
Total Long-Term Liabilities $62.67M
YoY Change
TOTAL LIABILITIES
Total Short-Term Liabilities $683.0M
Total Long-Term Liabilities $62.67M
Total Liabilities $817.1M
YoY Change
SHAREHOLDERS EQUITY
Retained Earnings
YoY Change
Common Stock $0.00
YoY Change
Preferred Stock
YoY Change
Treasury Stock (at cost) $0.00
YoY Change
Treasury Stock Shares 0.000 shares
Shareholders Equity $722.2M
YoY Change
Total Liabilities & Shareholders Equity $1.539B
YoY Change

Cashflow Statement

Concept 2015 Q1
OPERATING ACTIVITIES
Net Income $8.650M
YoY Change -28.51%
Depreciation, Depletion And Amortization $12.50M
YoY Change 5.04%
Cash From Operating Activities -$67.10M
YoY Change -2.19%
INVESTING ACTIVITIES
Capital Expenditures -$10.50M
YoY Change 43.84%
Acquisitions
YoY Change
Other Investing Activities $1.500M
YoY Change -16.67%
Cash From Investing Activities -$9.000M
YoY Change 63.64%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -2.300M
YoY Change -111.86%
NET CHANGE
Cash From Operating Activities -67.10M
Cash From Investing Activities -9.000M
Cash From Financing Activities -2.300M
Net Change In Cash -78.40M
YoY Change 43.33%
FREE CASH FLOW
Cash From Operating Activities -$67.10M
Capital Expenditures -$10.50M
Free Cash Flow -$56.60M
YoY Change -7.67%

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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-top:8px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Basis of Presentation</font></div><div style="line-height:120%;padding-top:8px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Our condensed consolidated financial statements reflect our consolidated financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States (&#8220;GAAP&#8221;). In the opinion of the Company&#8217;s management, the accompanying unaudited condensed consolidated financial statements of the Company contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly its consolidated financial position and the results of its operations and cash flows for the periods reported. These consolidated financial statements are condensed and therefore do not include all of the information and footnotes required by GAAP.</font></div><div style="line-height:120%;padding-top:8px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Our fiscal year is comprised of 52 or 53 weeks, ending on the Saturday closest to the last day of April. Due to the seasonal nature of the business, the results of operations for the 13 and </font><font style="font-family:inherit;font-size:10pt;">39 weeks ended</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;">January&#160;30, 2016</font><font style="font-family:inherit;font-size:10pt;"> are not indicative of the results expected for the 52 weeks ending April&#160;30, 2016 (Fiscal 2016). Our business is highly seasonal, with the major portion of sales and operating profit realized during the second and third fiscal quarters, when college students generally purchase and rent textbooks for the upcoming semesters.</font></div><div style="line-height:120%;padding-top:8px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">As discussed below, the results of operations for the 39 weeks ended </font><font style="font-family:inherit;font-size:10pt;">January&#160;31, 2015</font><font style="font-family:inherit;font-size:10pt;"> and the 13 weeks ended August 1, 2015 reflected in our condensed consolidated financial statements are presented on a stand-alone basis since we were still part of Barnes &amp; Noble, Inc. until the consummation of the Spin-Off on August 2, 2015 and the results of operations for the 26 weeks ended </font><font style="font-family:inherit;font-size:10pt;">January&#160;30, 2016</font><font style="font-family:inherit;font-size:10pt;"> reflected in our condensed consolidated financial statements are presented on a consolidated basis as we became a separate consolidated entity.</font></div><div style="line-height:120%;padding-top:8px;text-align:justify;padding-left:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Stand-alone basis financial statements</font></div><div style="line-height:120%;padding-top:8px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The results of operations for the 39 weeks ended </font><font style="font-family:inherit;font-size:10pt;">January&#160;31, 2015</font><font style="font-family:inherit;font-size:10pt;"> (i.e. first, second and third quarter of fiscal 2015) and the 13 weeks ended August 1, 2015 (i.e. first quarter of fiscal 2016) (collectively referred to as the "stand-alone periods") reflected in our condensed consolidated financial statements are presented on a stand-alone basis since we were still part of Barnes &amp; Noble, Inc. </font></div><div style="line-height:120%;padding-top:8px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Our condensed consolidated financial statements were derived from the consolidated financial statements and accounting records of Barnes&#160;&amp; Noble. Our condensed consolidated financial statements include certain assets and liabilities that have historically been held at the Barnes&#160;&amp; Noble corporate level but are specifically identifiable or otherwise attributable to us.</font></div><div style="line-height:120%;padding-top:8px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">All intercompany transactions between us and Barnes&#160;&amp; Noble have been included in our condensed consolidated financial statements and are considered to be effectively settled for cash in our condensed consolidated financial statements at the time the Spin-Off became effective. The total net effect of the settlement of these intercompany transactions is reflected in our condensed consolidated statements of cash flow as a financing activity and in our condensed consolidated balance sheets as &#8220;Parent company investment.&#8221;</font></div><div style="line-height:120%;padding-top:8px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The condensed consolidated financial statements for the stand-alone periods include an allocation for certain corporate and shared service functions historically provided by Barnes&#160;&amp; Noble, including, but not limited to, executive oversight, accounting, treasury, tax, legal, human resources, occupancy, procurement, information technology and other shared services. These expenses have been allocated to us on the basis of direct usage when identifiable, with the remainder allocated on a pro rata basis of consolidated sales, headcount, tangible assets or other measures considered to be a reasonable reflection of the historical utilization levels of these services. Management believes the assumptions underlying our condensed consolidated financial statements, including the assumptions regarding the allocation of general corporate expenses from Barnes&#160;&amp; Noble were reasonable. </font></div><div style="line-height:120%;padding-top:8px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Nevertheless, our condensed consolidated financial statements for these stand-alone periods may not include all of the actual expenses that would have been incurred had we operated as a stand-alone company and may not reflect our consolidated results of operations, financial position and cash flows had we operated as a stand-alone company during the periods presented. Actual costs that would have been incurred if we had operated as a stand-alone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure. As discussed below, following the Spin-Off on August 2, 2015, we began to perform these functions using our own resources or contracted services, certain of which may be provided by Barnes &amp; Noble during a transitional period pursuant to the Transition Services Agreement (as defined in </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Note 9. Barnes &amp; Noble, Inc. 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Certain corporate and shared service functions historically provided by Barnes&#160;&amp; Noble (as described above) will continue to be provided by Barnes&#160;&amp; Noble under the Transition Services Agreement. For additional information, see </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Note 9. Barnes &amp; Noble, Inc. Transactions</font><font style="font-family:inherit;font-size:10pt;">.</font></div><div style="line-height:120%;padding-top:12px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;"></font></div></div>
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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-top:16px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Note 3. </font><font style="font-family:inherit;font-size:10pt;font-weight:bold;text-decoration:underline;">Recent Accounting Pronouncements</font></div><div style="line-height:120%;padding-top:8px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In February 2016, the Financial Accounting Standards Board (&#8220;FASB&#8221;) issued Accounting Standard Update (&#8220;ASU&#8221;) No. 2016-02, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Leases (Topic 842)</font><font style="font-family:inherit;font-size:10pt;"> ("ASU 2016-01") to increase transparency and comparability by providing additional information to users of financial statements regarding an entity's leasing activities. The revised guidance seeks to achieve this objective by requiring reporting entities to recognize lease assets and lease liabilities on the balance sheet for substantially all lease arrangements. We are required to adopt this standard in the first quarter of fiscal 2020 and early adoption is permitted. The guidance will be applied on a modified retrospective basis beginning with the earliest period presented. We are currently evaluating this standard to determine the impact of adoption on our condensed consolidated financial statements.</font></div><div style="line-height:120%;padding-top:8px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In November 2015, the FASB issued ASU No.&#160;2015-17, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Income Taxes (Topic 740) - Balance Sheet Classification of Deferred Taxes</font><font style="font-family:inherit;font-size:10pt;"> ("ASU 2015-17") to simplify the presentation of deferred income taxes. The amendments in this update require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in this update. The amendments in this update may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. We are required to adopt this standard in the first quarter of fiscal 2018. This standard will impact the classification of current deferred income taxes on our condensed consolidated financial statements.</font></div><div style="line-height:120%;padding-top:8px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In September 2015, the FASB issued ASU No.&#160;2015-16, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Business Combinations (Topic 805) - Simplifying the Accounting for Measurement-Period Adjustments </font><font style="font-family:inherit;font-size:10pt;">("ASU 2015-16") to simplify the accounting for measurement-period adjustments resulting from business combinations. The amendments in this update eliminate the requirement to retrospectively account for measurement-period adjustments. Instead, these adjustments will be recognized in the period the adjustment amount is determined. We are required to adopt this standard in the first quarter of fiscal 2017, but have early adopted this standard during the second quarter of fiscal 2016 as permitted. Adoption of this standard will impact our condensed consolidated financial statements to the extent adjustments to provisional amounts recorded for future acquisitions are determined subsequent to the period the acquisition is originally reported.</font></div><div style="line-height:120%;padding-top:8px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In July 2015, the FASB issued ASU No.&#160;2015-11, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Inventory (Topic 330) &#8211; Simplifying the Measurement of Inventory</font><font style="font-family:inherit;font-size:10pt;"> (&#8220;ASU 2015-11&#8221;). The amendments in this update state that inventory should be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The update does not apply to inventory that is measured using last-in, first-out (&#8220;LIFO&#8221;) or the retail inventory method. The update applies to all other inventory, which includes inventory that is measured using first-in, first-out (&#8220;FIFO&#8221;) or average cost. We are required to adopt this standard in the first quarter of fiscal 2018, but have early adopted this standard during the first quarter of fiscal 2016 as permitted. This standard does not have an impact on our condensed consolidated financial statements.</font></div><div style="line-height:120%;padding-top:8px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In April 2015, the FASB issued ASU No.&#160;2015-05, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer&#8217;s Accounting for Fees Paid in a Cloud Computing Arrangement</font><font style="font-family:inherit;font-size:10pt;"> (&#8220;ASU 2015-05&#8221;) to simplify the accounting for cloud computing arrangements. The amendments in this update requires that if a cloud computing arrangement includes a software license, then a customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance will not change GAAP for a customer&#8217;s accounting for service contracts. We are required to adopt this standard in the first quarter of fiscal 2017 and early adoption is permitted. We are currently evaluating this standard to determine the impact of adoption on our condensed consolidated financial statements.</font></div><div style="line-height:120%;padding-top:8px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In April 2015, the FASB issued ASU No.&#160;2015-03, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs</font><font style="font-family:inherit;font-size:10pt;"> (&#8220;ASU 2015-03&#8221;) to simplify the presentation of debt issuance costs. The amendments in the update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction of the carrying amount of the debt. Recognition and measurement of debt issuance costs were not affected by this amendment. In August 2015, FASB issued ASU No.&#160;2015-15, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">&#8220;Presentation and Subsequent Measurement of Debt Issuance Costs Associated With Line-of-Credit Arrangements &#8212; Amendments to SEC Paragraphs Pursuant to Staff Announcement at June&#160;18, 2015 EITF Meeting&#8221;</font><font style="font-family:inherit;font-size:10pt;"> which clarified that the SEC would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement. We are required to adopt ASU 2015-03 in the first quarter of fiscal 2017, but have early adopted this standard during the first quarter of fiscal 2016 as permitted. As discussed in </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Note 7. Credit Facility</font><font style="font-family:inherit;font-size:10pt;">, debt issuance costs related to the New Credit Facility have been deferred and are presented as an asset which is subsequently amortized ratably over the term of the New Credit Facility.</font></div><div style="line-height:120%;padding-top:8px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In May 2014, the FASB issued ASU No.&#160;2014-09, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Revenue from Contracts with Customers</font><font style="font-family:inherit;font-size:10pt;"> (&#8220;ASU 2014-09&#8221;). The standard provides companies with a single model for use in accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance, including industry-specific revenue guidance. The core principle of the model is to recognize revenue when control of the goods or services transfers to the customer, as opposed to recognizing revenue when the risks and rewards transfer to the customer under the existing revenue guidance. In August 2015, FASB issued ASU No.&#160;2015-14, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date</font><font style="font-family:inherit;font-size:10pt;">, which effectively delayed the adoption date by one year. We are required to adopt ASU 2014-09 in the first quarter of fiscal 2019 and early adoption is permitted. The guidance permits companies to either apply the requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through a cumulative adjustment.&#160;We have not yet selected a transition method nor have we determined the impact of adoption on our condensed consolidated financial statements.</font></div></div>
us-gaap Nature Of Operations
NatureOfOperations
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-top:16px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Note 1. </font><font style="font-family:inherit;font-size:10pt;font-weight:bold;text-decoration:underline;">Organization</font></div><div style="line-height:120%;padding-top:8px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Description of Business</font></div><div style="line-height:120%;padding-top:8px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">We are one of the largest contract operators of bookstores on college and university campuses across the United States and a leading provider of digital education services. We create and operate campus stores that are focal points for college life and learning, enhancing the educational mission of the institution, enlivening campus culture and delivering an important revenue stream to our partner schools. We typically operate our stores under multi-year management service agreements granting us the right to operate the official school bookstore on campus. In turn, we pay the school a percentage of store sales and, in some cases, a minimum fixed guarantee.</font></div><div style="line-height:120%;padding-top:8px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">We build relationships and derive sales by actively engaging and marketing to over </font><font style="font-family:inherit;font-size:10pt;">5 million</font><font style="font-family:inherit;font-size:10pt;"> students and their faculty on the campuses we serve and offer a full assortment of items in our campus stores, including course materials, which includes new and used print textbooks and digital textbooks, which are available for sale or rent, emblematic apparel and gifts, trade books, computer products, school and dorm supplies, convenience and caf&#233; items and graduation products. We are a multi-channel marketer and operate school-branded e-commerce sites for each store, allowing students and faculty to purchase textbooks, course materials and other products online.</font></div><div style="line-height:120%;padding-top:8px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">As of May&#160;2, 2015, we operated </font><font style="font-family:inherit;font-size:10pt;">724</font><font style="font-family:inherit;font-size:10pt;"> stores nationwide, which reached </font><font style="font-family:inherit;font-size:10pt;">24%</font><font style="font-family:inherit;font-size:10pt;"> of the total United States college and university student enrolled population. During the </font><font style="font-family:inherit;font-size:10pt;">39 weeks ended</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;">January&#160;30, 2016</font><font style="font-family:inherit;font-size:10pt;">, we opened </font><font style="font-family:inherit;font-size:10pt;">34</font><font style="font-family:inherit;font-size:10pt;"> stores and closed </font><font style="font-family:inherit;font-size:10pt;">10</font><font style="font-family:inherit;font-size:10pt;"> stores. As of </font><font style="font-family:inherit;font-size:10pt;">January&#160;30, 2016</font><font style="font-family:inherit;font-size:10pt;">, we operated </font><font style="font-family:inherit;font-size:10pt;">748</font><font style="font-family:inherit;font-size:10pt;"> stores nationwide.</font></div><div style="line-height:120%;padding-top:16px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Separation from Barnes&#160;&amp; Noble, Inc.</font></div><div style="line-height:120%;padding-top:8px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">On February&#160;26, 2015, Barnes&#160;&amp; Noble announced plans to Spin-Off its </font><font style="font-family:inherit;font-size:10pt;">100%</font><font style="font-family:inherit;font-size:10pt;"> equity interest in our Company. At the time of the Spin-Off on August 2, 2015, Barnes&#160;&amp; Noble distributed all of its equity interest in us, consisting of all of the outstanding shares of our Common Stock, to Barnes&#160;&amp; Noble&#8217;s stockholders on a pro rata basis (the &#8220;Distribution&#8221;). Following the Spin-Off, Barnes&#160;&amp; Noble did not own any equity interest in us. On August&#160;2, 2015, we completed the legal separation from Barnes&#160;&amp; Noble, at which time we began to operate as an independent publicly-traded company. For details related to the Distribution of our Common Stock, see </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Note 5. Equity and Earnings Per Share</font><font style="font-family:inherit;font-size:10pt;">.</font></div><div style="line-height:120%;padding-top:8px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In connection with the separation from Barnes&#160;&amp; Noble, we entered into several agreements that govern the relationship between the parties after the separation and allocate between the parties various assets, liabilities, rights and obligations following the separation and also describe Barnes&#160;&amp; Noble&#8217;s future commitments to provide us with certain transition services following the Spin-Off. For additional information related to these agreements, see </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Note 9. Barnes &amp; Noble, Inc. Transactions</font><font style="font-family:inherit;font-size:10pt;">.</font></div><div style="line-height:120%;padding-top:12px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The results of operations for the </font><font style="font-family:inherit;font-size:10pt;">39 weeks ended</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;">January&#160;31, 2015</font><font style="font-family:inherit;font-size:10pt;"> and the 13 weeks ended August 1, 2015 reflected in our condensed consolidated financial statements are presented on a stand-alone basis since we were still part of Barnes &amp; Noble, Inc. until the consummation of the Spin-Off on August 2, 2015 and the results of operations for the 26 weeks ended </font><font style="font-family:inherit;font-size:10pt;">January&#160;30, 2016</font><font style="font-family:inherit;font-size:10pt;"> reflected in our condensed consolidated financial statements are presented on a consolidated basis as we became a separate consolidated entity (as discussed in </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Note 2. Summary of Significant Accounting Policies</font><font style="font-family:inherit;font-size:10pt;">).</font></div><div style="line-height:120%;padding-top:12px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-top:20px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Strategies </font></div><div style="line-height:120%;padding-top:8px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Our primary business strategies include growing our business by increasing market share with new accounts, increasing sales at existing bookstores, growing digital sales and services by expanding our digital platform, and expanding strategic opportunities through acquisitions and partnerships. For an update on recent transactions that support these strategies, see </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Note 14. Subsequent Events</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Item 2. Management&#8217;s Discussion and Analysis of Financial Condition and Results of Operations - Overview.</font></div></div>
us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-top:12px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Use of Estimates</font></div><div style="line-height:120%;padding-top:8px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In preparing financial statements in conformity with GAAP, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and revenues and expenses during the reporting period. Actual results could differ from those estimates.</font></div></div>

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