Neebo, Inc. Reports Fiscal 2013 Second Quarter Financial Results

Neebo, Inc. Reports Fiscal 2013 Second Quarter Financial Results

LINCOLN, Neb.--(BUSINESS WIRE)-- Neebo, Inc. (the "Company") today announced financial results for the fiscal second quarter ended September 30, 2012. Neebo, Inc. is a holding company and the beneficial owner of Nebraska Book Company, Inc., an industry leader in solutions for the college bookstore marketplace.

Fiscal 2013 Financial Highlights (six months ended September 30, 2012)

  • Debt reduced by $56.8 million, from $218.3 million at June 30, 2012 to $161.5 million at September 30, 2012. The Company made a $25.0 million voluntary prepayment on its senior secured term loan, permanently reducing the outstanding principal amount under this facility. In addition, the Company has repaid the full $31.8 million balance on its Bridge loan.

  • Adjusted EBITDA** of $31.8 million for the six months ended September 30, 2012, an increase of $5.9 million over prior year period.

  • Gross profit of 40.7% for the six months ended September 30, 2012, up from 39.2% in prior year period.


"I am proud to say that our team has continued to execute on our key strategies for continued growth and profitability," said Steve Clemente, President and Chief Executive Officer. "Our simple, yet effective approach focuses on best in class guest service, expanding textbook rental programs, growing our site Neebo.com and strengthening our balance sheet through disciplined working capital management, all of which contributed to significant improvements in gross profit and SG&A expenses during the past quarter."

"We fully intend to remain focused on paying down debt with free cash flow and net working capital improvements as we demonstrate our commitment to disciplined capital management," explains Alexi Wellman, Chief Financial Officer.

The following table presents selected financial data for continuing operations as of and for the six months ended September 30, 2012 and 2011 ($ in 000's).

Six months ended

September 30,
2012

September 30,
2011

Percent
Change

Total assets

$

377,389

$

547,144

*

Long-term debt

161,472

452,073

*

Revenues, net of returns

264,065

283,601

-6.9

%

Adjusted EBITDA**

31,837

25,931

22.8

%

Adjusted EBITDA Margin

12.1

%

9.1

%

Net cash flows provided by (used in) operating activities

4,835

(45,615

)

-110.6

%

Net cash flows used in investing activities

(4,769

)

(5,377

)

*

Net cash provided by (used in) financing activities

(72,817

)

117,131

*

Net income (loss) from operations

$

268,518

$

(115,370

)

-332.7

%

* Not Meaningful

** Adjusted EBITDA is a non-GAAP financial measure. See additional disclosure below.

Item Impacting the Six Months Ended September 30, 2012 Comparability

  • The Company recorded the impact of fresh start accounting as of June 30, 2012. As a result of fresh start accounting, Adjusted EBITDA was positively impacted by approximately $3.0 million related to the recording of overhead capitalization.

Conference Call

Management will hold a conference call on November 29, 2012 at 11:00AM Eastern Time (10:00AM Central Time) to review the Company's fiscal second quarter financial results. To participate in the call, please dial (800) 553-5275 or (888) 428-4470 (International). Interested parties are asked to dial in ten minutes prior to the start time of the call.

A digitized replay of the call will be available from November 29, 2012 through December 6, 2012. To access the replay, call (800) 475-6701 or (320) 365-3844 (International) and use the access code 271935.

The unaudited condensed consolidated financial statements as of and for the three and six months ended September 30, 2012 and 2011 are located on the Company's website at: http://www.nebook.com/financial/company_filings.asp.

About the Company

Neebo, Inc. is the beneficial owner of the Nebraska Book Company, Inc. Nebraska Book Company, Inc. began in 1915 with a single college store near the University of Nebraska campus and now operates nearly 250 stores serving colleges and universities with more than two million students. Nebraska Book Company, Inc. serves more than 2,500 bookstores, selling six million textbooks annually and installing more than 1,600 technology platforms and e-commerce sites. Additional information about Nebraska Book Company, Inc. can be found at the Company's website: www.nebook.com.

Notice Regarding Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they do not fully materialize or prove incorrect, could cause the Company's business and results of operations to differ materially from those expressed or implied by such forward-looking statements. Such forward-looking statements include statements that discuss management's beliefs and assumptions and can be identified by the use of words such as "will," "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "intends," "potential," "continue," or the negative of such terms, or other comparable terminology. These forward-looking statements speak only as of the date on which the statements were made. The Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by applicable law. Additional information regarding forward-looking statements as well as risks and uncertainties is contained in Management's Discussion and Analysis.

Selected Financial Data

The information contained herein is more fully detailed and explained in the Company's Unaudited Condensed Consolidated Financial Statements and Management Discussion & Analysis, which is available at: http://www.nebook.com/financial/company_filings.asp.

Consolidated Statement of Operations($ in 000's)

Three months ended

Six months ended

Successor

Predecessor

three months

three months

Successor

Predecessor

ended

ended

Predecessor

September 30,
2012

September 30,
2011

September 30,
2012

June 30,
2012

September 30,
2011

Revenues, net of returns

$

195,911

$

217,744

$

195,911

$

68,153

$

283,601

Costs of sales

113,468

133,453

113,468

43,027

172,547

Gross profit

82,443

84,291

82,443

25,127

111,054

Operating expenses:

Selling, general, and administrative

47,901

48,656

47,901

31,318

85,123

Depreciation

1,758

1,743

1,758

1,642

3,618

Amortization

2,224

1,979

2,224

2,067

3,972

51,884

52,378

51,884

35,027

92,712

Income (loss) from operations

30,559

31,912

30,559

(9,900

)

18,342

Operating expenses:

Interest expense

10,077

9,417

10,077

8,337

22,182

Interest income

(17

)

-

(17

)

-

(14

)

Goodwill impairment

-

122,639

-

-

122,639

10,060

132,056

10,060

8,337

144,806

Income (loss) before reorganization items and income taxes

20,499

(100,143

)

20,499

(18,237

)

(126,464

)

Reorganization items

(679

)

8,749

(679

)

(274,817

)

15,266

Income (loss) from continuing operations before income taxes

21,178

(108,892

)

21,178

256,580

(141,731

)

Income tax expense (benefit)

7,785

(16,396

)

7,785

-

(26,353

)

Income (loss) from continuing operations

13,393

(92,496

)

13,393

256,580

(115,378

)

Income (loss) from discontinuing operations, net of tax

(514

)

823

(514

)

(941

)

8

Net income (loss)

$

12,879

$

(91,674

)

$

12,879

$

255,639

$

(115,370

)

Net Revenues by Segment ($ in 000's)

Three months ended

Six months ended

Successor

Predecessor

three months

three months

Successor

Predecessor

ended

ended

Predecessor

September 30,

2012

Percent
of total

September 30,

2011

Percent
of total

September 30,

2012

June 30,

2012

September 30,

2011

Percent
of total

College Stores

$

141,760

72.4

%

$

167,497

76.9

%

$

141,760

$

43,762

$

209,919

74.0

%

Textbooks

58,145

29.7

%

55,463

25.5

%

58,145

25,885

81,426

28.7

%

Complementary Services

7,628

3.9

%

8,612

4.0

%

7,628

5,319

15,585

5.5

%

Intersegment

(11,621

)

-5.9

%

(13,829

)

-6.4

%

(11,621

)

(6,813

)

(23,330

)

-8.2

%

Total net revenues

$

195,911

100.0

%

$

217,744

100.0

%

$

195,911

$

68,153

$

283,601