Barnes & Noble Education, Inc · NYSE:BNED
Barnes & Noble Education — 25th Annual Needham Growth Conference (January 2023)
25 slides from Barnes & Noble Education's conference presentation, January 2023
Slide 1: 25th Annual Needham Growth Conference Investor Presentation
25th Annual Needham Growth Conference Investor Presentation January 2023 1
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation contains statements that may be characterized as forward‐looking statements under the Private Securities Litigation Reform Act of 1995. Those statements represent the current beliefs of management with respect to future events, financial performance and i
Slide 3: Who We Are
Who We Are BNED is a leading solutions provider for the education industry. We drive affordability, access and achievement at hundreds of institutions and ensure millions of students are equipped for success in the classroom and beyond. NYSE: BNED 3
Slide 4: BNED At a Glance
BNED At a Glance #1 $1.5B 6M+ Largest Operator of Fiscal 2022 Revenue Students & Faculty College Bookstores Served 793 606 111 Physical Bookstores* Virtual Bookstores* Campus Stores Leveraging Equitable Access Solutions * * As of second quarter ended on October 29, 2022 4 NYSE: BNED
Slide 5: BNED Is a Recognized Leader in Higher Education
BNED Is a Recognized Leader in Higher Education • Deliver superior customer experience & satisfaction- #1 in overall customer satisfaction(1) • Create state of the art destinations • Enhance an institution’s brand and appeal • Enhance student outcomes & affordability • Increase market share & financ
Slide 6: Addressing the Challenges that Students Face
Addressing the Challenges that Students Face • Affordability of a college education continues to be on the forefront of students’ minds • Less than half of students (47%) believe their school is doing something to improve affordability • Affordability influences the main reason students feel they ar
Slide 7: Q2 FY 2023 Highlights
Q2 FY 2023 Highlights Total consolidated revenue of $617.1 million decreased 1.6% - Total Retail Segment revenue was down 1.7% year-over-year to $598.6 million - Retail gross comparable course materials revenue was down 4.6%- continues to be impacted by industry headwinds FDC revenue grew 97% to $89
Slide 8: Strategic Initiatives Focused On Long-term Growth & Profitability
Strategic Initiatives Focused On Long-term Growth & Profitability Lead the industry transition to equitable access offerings through First Day Complete (FDC) Grow general merchandise sales through improved merchandising assortment and enhanced online shopping experience via partnership with Fanatics
Slide 9: BNED's Inclusive and Equitable Access Offerings Increase Access, Affordability and Achievement
BNED’s Inclusive and Equitable Access Offerings Increase Access, Affordability and Achievement First Day Complete First Day by Course Adopted by entire Adopted by individual institution- student opt out faculty member Physical or digital materials Digital course materials only Fees bundled into tuit
Slide 10: First Day Complete Benefits the Entire Ecosystem
First Day Complete Benefits the Entire Ecosystem STUDENTS BNED • 30%-50% lower course • Higher sell-through and material costs for revenue students • Improved gross margin • 73% of students said • Increased customer LTV FDC helped them • Enhanced predictability achieve better grades • Improved well-
Slide 11: First Day Complete Is A More Predictable & Profitable Model
First Day Complete Is A More Predictable & Profitable Model $ in millions First Day Complete Course Material Revenue • 97% Q2 FY2023 revenue growth $90 • FDC gross margin is significantly higher than traditional model • ~80% sell-through rates $46 • Subscription-like revenue that is ‘stickier’ and e
Slide 12: We Expect FDC's Strong Growth To Continue
We Expect FDC’s Strong Growth To Continue As It Becomes the Only Model Offered to Most Schools • BNED has led the market change to equitable access over the 800,000 120 111 past five years 700,000 100 • FDC is a high-growth, scaled solution with the platform in 600,000 place to accelerate adoption a
Slide 13: BNED is Uniquely Positioned to Deliver a Compelling FDC Experience
BNED is Uniquely Positioned to Deliver a Compelling FDC Experience Integrated Technology ‐ Adoption & Insights Portal is an advanced course-material management tool ‐ Integrations between the school, student information systems (SIS), LMS, financial aid, and billing provide a streamlined order proce
Slide 14: Omnichannel General Merchandise Experience Drives School Brand Expansion
Omnichannel General Merchandise Experience Drives School Brand Expansion Destination for campus events including student tours, homecoming, parents and reunion weekends and sporting events Highly convenient shop to support student's day-to-day needs BNC and Fanatics powered websites extend the reach
Slide 15: Strategic Partnership with Fanatics and Lids
Strategic Partnership with Fanatics and Lids Provides Best-of-Breed In-store and E-commerce Retail Experience BNED Fanatics and Lids Contractually own and manage school Source in-store logo and emblematic products relationships with data analytics Staff and manage the operations of the schools' Leve
Slide 16: Improve General Merchandise Growth & Profitability
IMPROVE GENERAL MERCHANDISE GROWTH & PROFITABILITY $ in millions Focus on logo and emblematic sales through Revenue in continued integration with Fanatics and Lids partnership $122.7 Q2 FY’23 Leverage omnichannel reach to enhance consumer experience Increase in Q2 Improve store profitability 4.5% FY
Slide 17: DSS Provides Direct-to-Student Services
DSS Provides Direct-to-Student Services Helping Students Study More Effectively and Improve Academic Performance • Leading direct-to-student subscription-based writing • Direct-to-student subscription-based offering services business providing textbook solutions, expert questions and answers, writin
Slide 18: DSS Is On a Clear Path to Profitable and Sustainable Growth
DSS Is On a Clear Path to Profitable and Sustainable Growth $ in millions Focused on streamlining our operational structure and increasing $8.3 $8.5 efficiencies to drive profitability Refine and optimize marketing & content spend Streamline data infrastructure and processes $0.8 $0.2 Optimize prici
Slide 19: Fiscal 2023 Q2 Financial Highlights
Fiscal 2023 Q2 Financial Highlights NYSE: BNED 19
Slide 20: Fiscal 2023 Second Quarter Review
Fiscal 2023 Second Quarter Review $ in millions Metrics Q3 FY 2023 Q3 FY 2022 Inc./Dec. Total Consolidated Sales $617.1 $627.0 $(9.9) Retail Gross Comparable Store Sales (2.2)% 13.2% Retail Gross Comparable Store Sales (4.6)% (0.1)% General Merchandise Gross Comp Store Sales 4.5% 76.6% Gross Profit
Slide 21: FY23 Non-GAAP Adjusted EBITDA Outlook
FY23 Non-GAAP Adjusted EBITDA Outlook $ in millions $105 ‐ On 12/6/22, BNED announced $30 million to $35 million of annualized cost savings $42 - $10 million to $15 million $20 - $30 of the cost savings will occur in FY 2023 - The remaining $15 -$5 million to $25 million will occur in FY 2024 and wi
Slide 22: Investment Highlights
Investment Highlights BNED is a unique asset in the higher ed industry 1 with the scale, strategic asset mix, and competitive positioning to meet the needs of the higher ed institutions and students we serve Accelerating our transition to the FDC model, a 2 more profitable and predictable model with
Slide 23: Appendix
Appendix NYSE: BNED 23
Slide 24: Adjusted EBITDA (non-GAAP) Reconciliation
Adjusted EBITDA (non-GAAP) Reconciliation $ in thousands 13 weeks ended 26 weeks ended October 29, 2022 October 30, 2021 October 29, 2022 October 30, 2021 Net income (loss) $ 22,144 $ 22,528 $ (30,563) $ (21,100) Add: Depreciation and amortization expense 10,759 11,952 23,292 24,576 Interest expense
Slide 25: 2: BNED
2: BNED @@@© ELEVATING EDUCATION
Barnes & Noble Education — 25th Annual Needham Growth Conference (January 2023) on 6ix