Earlier this week Judge Peter Walsh of the U.S. Bankruptcy Court in Delaware signed an order granting NBC Acquisition Corp., parent company of college book wholesaler and bookstore operator Nebraska Book Company, a second extension to file a Chapter 11 reorganization plan. Nebraska now has until April 23 to create a plan to emerge from pre-arranged bankruptcy. The solicitation period goes through June 21, almost exactly one year to the day since the company entered bankruptcy protection. As noted in a declaration by COO and president Barry S. Major, the reason for the extensions is that “various macroeconomic indicators had disrupted capital markets and made exit financing more difficult to obtain.”
In a performance update, Nebraksa report in its 10-Q filing for the third quarter ended December 31 that total revenue rose 10.4%, to $76.4 million. The gain was primarily due to an increase in same-store sales in the bookstore division due to $13.2 million increase in textbook rental revenue, which were partially offset by decreased new and used textbook sales. Net loss was $18.7 million up from $16.3 million. For the first nine months of the year, sales fell 7.7% to $382.2 million, and the net loss, which includes $20.6 million in reorganization costs, deepened to $134.1 million from $12.5 million in the nine months of fiscal 2011.
During the quarter, Nebraska rejected leases for seven off-campus stores effective at the end of February—GotUsed Bookstore in Pittsburgh; The College Store in Akron, Oh.; Spirit Shop in Lubbock, Tex.; Traditions Bkst-Woodstone in College Station, Tex.; Chattanooga Books in Chattanooga; Madison Textbooks in Madison, Wisc.; and Florida Bookstore Volume III in Gainesville. It is also analyzing another 45 off-campus stores and assumed leases for 90 stores; it has until mid April to keep or reject the leases. Even has it rejects leases, Nebraska established two start-up locations (one on-campus contract-managed bookstore and one off-campus store), acquired four bookstore locations and closed three locations (one on-campus contract-managed bookstore and two off-campus bookstores) during the quarter ended December 31, 2011.
At the time of its bankruptcy filing last June, Nebraska Book reported $657.2 million in assets and $564 million in debt as of February 14, 2011. The company is funding post-petition operations with a $200 million Superpriority DIP Credit agreement, which was amended at the end of December.
