Barnes & Noble Education, Inc · NYSE:BNED

Barnes & Noble Education — Q3 FY2023 Earnings Presentation

17 slides from Barnes & Noble Education's earnings presentation, Mar 9, 2023

  1. Slide 1: Fiscal 2023 Third Quarter

    Fiscal 2023 Third Quarter March 9, 2023 1

  2. 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

  3. Slide 3: Q3 FY 2023 Highlights

    Q3 FY 2023 Highlights ‐ Grew total consolidated revenue to $447.1 million, an 11.0% increase - Total Retail Segment revenue increased 12.4% year-over-year to $421.2 million - Retail gross comparable store course materials revenue increased 7.4% - Delivered First Day Complete (FDC) revenue of $67 mil

  4. Slide 4: Fiscal 2023 Third Quarter Review

    Fiscal 2023 Third Quarter Review $ in millions Metrics Q3 FY 2023 Q3 FY 2022 $ change Retail 421.2 374.7 46.5 DSS 9.0 9.4 (0.4) Wholesale 38.9 37.0 1.9 Eliminations (22.2) (18.4) (3.8) Total Sales $447.1 402.8 44.3 Gross Profit $104.2 $87.0 17.2 Gross Margin % 23.3% 21.6% 1.7% Selling & Administrati

  5. Slide 5: Focused On A More Profitable Retail Model

    Focused On A More Profitable Retail Model $ in millions Retail Revenue Retail Gross Margin % $421.3 21.1% 18.5% 13.8% $387.7 $374.7 3Q21 3Q22 3Q23 3Q21 3Q22 3Q23 Retail EBITDA ‐ Retail revenue increased 12.4% year-over-year driven by $6.2 continued strength of First Day Complete and General Merchand

  6. Slide 6: BNED is Uniquely Positioned to Deliver a Compelling FDC Experience

    BNED is Uniquely Positioned to Deliver a Compelling FDC Experience Differentiated Technology, Seamlessly Integrated ‐ BNC’s Adoption & Insights Portal provides institutions with an advanced course-material management tool ‐ Integrations between the school, student information systems (SIS), LMS, fin

  7. Slide 7: 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

  8. Slide 8: Illustrative FDC Market Opportunity

    Illustrative FDC Market Opportunity Step 1 ~ 4M ~ 12M ~16M Total Students Students Within Students at Potential students Existing BNED Base(1) Potential Schools(2) Step 2 Sell-Through Rate ~ 16M 80% ~ 13M Potential Students Sell-Through Rate Potential students Step 3 Total Addressable Market ~ 13M $

  9. Slide 9: BNED Is Focused On Accelerating the Transition To FDC

    BNED Is Focused On Accelerating the Transition To FDC Students in thousands $ in millions Q3 FY 22 Q4 FY 22 Q1 FY 23 Q2 FY 23 Q3 FY 23 ‐ BNED has led the market change to equitable (Partial Spring (Spring (Summer (Fall Semester) (Partial Spring Semester) Semester) Semester(3) ) Semester) access - FD

  10. Slide 10: Course Material Growth Driven By FDC Strength

    Course Material Growth Driven By FDC Strength Course Materials Product Sales $286.7 • Course Material revenue grew 9.1% with $262.9 increasing shift to First Day Complete- a more predictable and profitable model • Retail gross comparable store course material sales increased 7.4% • Shift to digital

  11. Slide 11: General Merchandise Is A Long-Term Growth Opportunity

    General Merchandise Is A Long-Term Growth Opportunity General Merchandise Revenue ‐ General merchandise product sales $81.8 grew 6.6%; Gross Comparable Store $76.8 sales up 2.3% - Higher-margin logo general merchandise and Café/Convenience drove the year-over-year growth Q3 FY 22 Q2 FY 23 General Me

  12. Slide 12: DSS Is On a Clear Path to Profitable and Sustainable Growth

    DSS Is On a Clear Path to Profitable and Sustainable Growth DSS Revenue $ in millions $9.4 Product/Growth Initiatives $9.0 - Build differentiated capabilities leveraging $7.2 years of AI experience - Leverage Open AI API to help team of experts curate responses at a lower cost - AI Plagiarism Detect

  13. Slide 13: Store Count and Capex

    Store Count and Capex Store Count 1,441 1,441 1,388 ‐ 53 fewer stores (14 fewer physical stores) than Q3 FY 22 as we focus on a 676 642 more profitable store footprint 603 - Execution of the FDC strategy will lead to fewer, more profitable stores for a period of time 765 799 785 - Working capital st

  14. Slide 14: FY23 Non-GAAP Adjusted EBITDA Outlook

    FY23 Non-GAAP Adjusted EBITDA Outlook $ in millions ‐ FY 23 non-GAAP adjusted $105 EBITDA guidance represents $25 million to $35 million increase compared to FY 22. - Retail segment will be the $42 primary driver of non- $20- $30 GAAP Adjusted EBITDA growth - Key Retail drivers include: New and ongo

  15. Slide 15: Appendix

    Appendix NYSE: BNED 15

  16. Slide 16: Adjusted EBITDA (non-GAAP) Reconciliation

    Adjusted EBITDA (non-GAAP) Reconciliation $ in thousands Please refer to the company’s 10-Q filing for the period ended January 28, 2023, for additional information. NYSE: BNED 16

  17. Slide 17: 2: BNED

    2: BNED @@@© ELEVATING EDUCATION

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