Barnes & Noble Education, Inc.

During Fiscal 2025, our primary sources of cash are net cash flows from operating activities, funds available under our Credit Agreement, and short-term vendor financing. Our liquidity is highly dependent on the seasonal nature of our business, particularly with respect to course material sales, as sales are generally highest in the second and third fiscal quarters, when college students purchase textbooks for the upcoming Fall and Spring semesters, respectively. As of May 3, 2025, we had $9.1 million of cash on hand and $19.7 million of restricted cash including $17.3 million related to segregated funds for commission due to Lids for logo merchandise sales as per the F/L Relationship-related agreements.

On June 10, 2024, we completed the Transactions, including the Rights Offering, the Private Investment, the Term Loan Debt Conversion, and the Credit Facility Refinancing, to substantially deleverage our Consolidated Balance Sheet. These transactions also raised additional capital for repayment of indebtedness and provide additional flexibility for future working capital needs. For additional information, see Financing Arrangements. Additionally, on September 19, 2024 and December 20, 2024, respectively, we entered into an at-the market ("ATM") sales agreement with BTIG, LLC ("BTIG") under which we sold our Common Stock from time to time through BTIG as the sales agent (See Note 6. Equity and Earnings (Loss) Per Share).

We believe that our future cash from operations, access to borrowings under the credit facility, and short-term vendor financing will provide adequate resources to fund our operating and financing needs for the next twelve months and beyond. To the extent that available funds are insufficient to fund our future activities, we may need to raise additional funds through public or private financing of debt or equity. Our access to, and the availability of, financing in the future will be impacted by many factors, including the liquidity of the overall capital markets and the current state of the economy. There can be no assurances that we will have access to capital markets on acceptable terms.

Sources and Uses of Cash Flow - Continuing Operations

As of May 3, 2025, and April 27, 2024, we had cash of $9.1 million and $10.5 million, respectively. As of May 3, 2025 and April 27, 2024, we had restricted cash of $19.7 million and $18.1 million, respectively, comprised of $17.3 million and $17.1 million, respectively, in prepaid and other current assets in the Consolidated Balance Sheets primarily related to segregated funds for commission due to Lids for logo merchandise sales as per the Lids service provider merchandising agreement and $2.3 million and $1.0 million, respectively, in other noncurrent assets in the Consolidated Balance Sheets related to amounts held in trust for future distributions related to employee benefit plans.

Cash Flow from Operating Activities from Continuing Operations

Our business is highly seasonal. Cash flows from operating activities are typically a source of cash in the second and third fiscal quarters, when students generally purchase and rent textbooks and other course materials for the upcoming semesters based on the typical academic semester. Given the growth of our BNC First Day® programs, the timing of cash collection from our school partners may shift to periods subsequent to when the revenue is recognized. When a school adopts our BNC First Day® affordable access course material program offerings, cash collection from the school generally occurs after the institution's drop/add dates, which is later in the working capital cycle, particularly in our third quarter given the timing of the Spring Term and our quarterly reporting period, as compared to direct-to-student point-of-sale transactions where cash is generally collected during the point-of-sale transaction or within a few days from the credit card processor. As a higher percentage of our sales shift to BNC First Day® affordable access course material program offerings, we are focused on efforts to better align the timing of our cash outflows to course material vendors and cash inflows from collections from schools. Our quarterly cash flows also may fluctuate depending on the timing of the start of the various schools' semesters, as well as shifts in our fiscal calendar dates. These shifts in timing may affect the comparability of our results across periods.

Cash flows used in operating activities from continuing operations during the 53 weeks ended May 3, 2025, were $85.4 million compared to cash flows used in operating activities from continuing operations of $1.5 million during the 52 weeks ended April 27, 2024. The increase in cash flows used in operating activities from continuing operations of $83.9 million was primarily due to the timing of payables $(206.6) million to vendors for inventory purchases and expenses, lower accounts receivables collections $7.1 million compared to the prior year, and reduction of inventory balances of $44.5 million, offset by lower payments for interest expense $(7.0) million and higher earnings $9.9 million.

Cash Flow from Investing Activities from Continuing Operations

Cash flows used in investing activities from continuing operations during the 53 weeks ended May 3, 2025, were $12.1 million compared to $14.0 million during the 52 weeks ended April 27, 2024. The decrease in cash used in investing activities is primarily due to lower capital expenditures and contractual capital investments, less enhancements to internal systems and websites, and new store construction. Capital expenditures totaled $12.9 million and $14.1 million during the 53 weeks ended May 3, 2025, and the 52 weeks ended April 27, 2024, respectively.

Cash Flow from Financing Activities from Continuing Operations

Cash flows provided by (used in) financing activities from continuing operations during the 53 weeks ended May 3, 2025, were $97.7 million compared to $(5.7) million used in during the 52 weeks ended April 27, 2024. The net change of $103.4 million is primarily due the gross proceeds of $95.0 million of new equity capital through a $50.0 million new equity investment led by Immersion Corporation, and a $45.0 million fully backstopped Rights Offering, and proceeds of $78.5 million from the sale of Common Stock, offset by payments for equity issuance costs of $9.9 million and lower net borrowings of $72.7 million.

(a) On June 10, 2024, we completed the Transactions, including amending and extending the maturity date of the Credit Facility to June 9, 2028 and converting all outstanding principal and interest amounts owed under our Term Loan Credit Agreement into shares of our Common Stock. For additional information, see Note 9. Debt.

(b) For additional information on deferred financing costs, see Deferred Financing Costs below.

June 2024 Equity and Debt Transactions

On June 10, 2024, we completed the Transactions, including the Rights Offering, the Private Investment, the Term Loan Debt Conversion, and the Credit Facility Refinancing, to substantially deleverage our Consolidated Balance Sheet. These transactions raised additional capital for repayment of indebtedness and provide additional flexibility for working capital needs, which will also allow us to strategically invest in innovation and continue to execute our strategic initiatives, including but not limited to the growth of our First Day Complete program. For additional information, see Part II - Item 8. Financial Statements and Supplementary Data.

Credit Facility

We are a party to that certain Credit Agreement, dated as of August 3, 2015, by and among the Company, as borrower, the lenders party thereto, Bank of America, N.A., as administrative agent, and the other agents party thereto (the “Original Credit Agreement”), which was amended from time to time (as amended, the “Credit Agreement”). On June 10, 2024 (the “Closing Date”), we amended and restated the Credit Agreement, and through such amendment and restatement, further extended the maturity of our asset-based credit facility under the Credit Agreement (such amended and restated Credit Agreement, the “A&R Credit Agreement”).

Pursuant to the A&R Credit Agreement, the lenders thereunder have committed to provide a four-year asset-backed revolving credit facility (the "Credit Facility") in an aggregate committed principal amount of up to $325.0 million and extended the maturity date of the Credit Facility to June 9, 2028. During the 53 weeks ended May 3, 2025, we incurred debt issuance costs totaling $3.7 million related to the A&R Credit Agreement amendment. For information regarding the Credit Agreement amendments, deferred financing costs and terms, see Part II - Item 8. Financial Statements and Supplementary Data -Note 9. Debt.

As of May 3, 2025, we were in compliance with all debt covenants under the A&R Credit Agreement. We have been working with our lenders to allow sufficient time for us to complete our internal investigation and the Restatement, and to prepare our quarterly report for the first quarter of fiscal 2026; and as a result, we received an extension of the deadline to deliver our financial statements to our lenders. As of the issuance date of this Annual Report on Form 10-K, and for all periods presented in these financial statements reported on this Form 10-K, we were in compliance with all debt covenants under the A&R Credit Agreement.

During the 53 weeks ended May 3, 2025, we borrowed $887.1 million and repaid $948.9 million under the Credit Facility, with $164.9 million of outstanding borrowings as of April 27, 2024, under the Credit Facility. As of both May 3, 2025, and April 27, 2024, we have issued $0.6 million and $3.6 million, respectively, in letters of credit under the Credit Facility.

Term Loan

On June 10, 2024, pursuant to the Term Loan Credit Agreement by and among the Company, TopLids LendCo, LLC and Vital Fundco, LLC dated June 7, 2022 (the "Term Loan"), lenders converted approximately $34.0 million of outstanding principal and accrued and unpaid interest into our Common Stock, resulting in financing noncash flow activity totaling $86.8 million. We recognized a loss on extinguishment of debt of $55.2 million in the Consolidated Statement of Operations in connection with the Term Loan Debt Conversion which represents the difference between the Common Stock fair value issued upon conversion and the net carrying value of the Term Loan, plus unamortized deferred financing costs related to the Term Loan. As a result of the Term Loan Debt Conversion, the Term Loan and its related agreements were terminated. For information regarding the Term Loan amendments, deferred financing costs and terms, see Part II - Item 8. Financial Statements and Supplementary Data -Note 9. Debt.

During the 53 weeks ended May 3, 2025, we incurred $0.0 million for interest in kind and repaid $0 under the Term Loan, with $0.0 million of outstanding borrowings as of May 3, 2025. During the 52 weeks ended April 27, 2024, we incurred $2.7 million for interest in kind and repaid $0 under the Term Loan, with $32.7 million of outstanding borrowings as of April 27, 2024.

Deferred Financing Costs

The debt issuance costs have been deferred and are presented as noted below in the Consolidated Balance Sheets and are subsequently amortized ratably over the term of respective debt.

(a) On June 10, 2024, we completed the Transactions, including amending and extending the maturity date of the Credit Facility, and converting all outstanding principal and interest amounts owed under our Term Loan into shares of our Common Stock. For additional information, see Part II - Item 8. Financial Statements and Supplementary Data.

Interest

The following table presents interest expense on the Consolidated Statements of Operations and cash interest paid:

Income Tax Implications on Liquidity

The Company recognizes current income tax receivable for net operating loss carrybacks in prepaid and other current assets on the Consolidated Balance Sheet. On August 24, 2024, a final refund of $2.7 million, including $0.3 million of interest, was received, and all refunds related to these carrybacks have been fully collected. Refunds of $8.5 million and $15.8 million were received in Fiscal 2024 and Fiscal 2023, respectively.

Share Repurchases

On December 14, 2015, our Board of Directors authorized a stock repurchase program of up to $50 million, in the aggregate, of our outstanding common stock. The stock repurchase program is carried out at the direction of management (which may include a plan under Rule 10b5-1 of the Securities Exchange Act of 1934). The stock repurchase program may be suspended, terminated, or modified at any time. Any repurchased shares will be held as treasury stock and will be available for general corporate purposes. During Fiscal 2025 and Fiscal 2024, we did not purchase shares under the stock repurchase program. As of May 3, 2025, approximately $26.7 million remains available under the stock repurchase program.

During Fiscal 2025 and Fiscal 2024, we purchased 429 shares and 1,482 shares, respectively, outside of the stock repurchase program in connection with employee tax withholding obligations for vested stock awards.

Contractual Obligations

The following table sets forth our contractual obligations as of May 3, 2025 (in millions):

(a)On June 10, 2024, we completed the Transactions, including the Rights Offering, the Private Investment, the Term Loan Debt Conversion, and the Credit Facility Refinancing, to substantially deleverage our Consolidated Balance Sheet. These transactions raised additional capital for repayment of indebtedness and provide additional flexibility for working capital needs, which will also allow us to strategically invest in innovation and continue to execute our strategic initiatives, including but not limited to the growth of our First Day Complete program. For additional information, see Part II - Item 8. Financial Statements and Supplementary Data.

(b)Our contracts for physical bookstores with colleges and universities are typically five years with renewal options, but can range from one to 15 years, and are typically cancelable by either party without penalty upon advance notice ranging from 90 to 180 days depending on the contract. Annual projections are based on current minimum guarantee amounts. In the less than approximately 40% of our contracts with colleges and universities that include minimum guarantees, the minimum guaranteed amounts typically adjust annually to equal less than the prior year's commission earned. See Part II - Item 8. Financial Statements and Supplementary Data —Note 10. Leases.

(c)Includes information technology contracts.

Certain Relationships and Related Party Transactions

See Part II - Item 8. Financial Statements and Supplementary Data —Note 12. Related Party Transactions.