NBC ACQUISITION CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - FORM 8-K - NBC ACQUISITION CORP	c22873e8vk.htm

EXHIBIT 99.1

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE

In re: Nebraska Book Company, Inc., et al.,


Case No. (Jointly Administered)		11-12005(PJW)
Reporting Period:		August 1 – August 31, 2011
Federal Tax I.D. #		47-0549819

CORPORATE MONTHLY OPERATING REPORT

File with the Court and submit a copy to the United States Trustee within 30 days after the end of the month and submit a copy of the report to any official committee appointed in the case.

Document

Explanation

DOCUMENTS

Form No.

Attached

Schedule of Disbursements

MOR-1a

Bank Account Information

MOR-1b

Statement of Operations (Income Statement)

MOR-2

Balance Sheet

MOR-3

Status of Post-petition Taxes

MOR-4

Accounts Receivable Reconciliation and Aging

MOR-5

Payments to Professionals

MOR-6

Debtor Questionnaire

MOR-7

I declare under penalty of perjury (28 U.S.C. Section 1746) that this report and the attached documents are true and correct to the best of my knowledge and belief.


/s/ Barry S. Major Signature of Authorized Individual*		September 29, 2011 Date

Barry S. Major

Printed Name of Authorized Individual

Chief Operating Officer

Title


*		Authorized individual must be an officer, director or shareholder if debtor is a corporation; a partner if debtor is a partnership; a manager or member if debtor is a limited liability company

Nebraska Book Company, Inc., et al.,
MOR 1a
Disbursements
August 2011


Company Name	Case Number		Federal ID Number		Amount
NBC Holdings Corporation		11-12006		75-3147477	$	—
NBC Acquisition Corporation		11-12008		47-0793347		—
Nebraska Book Company, Inc.		11-12005		47-0549819		59,771,556
Specialty Books, Inc.		11-12007		75-3044807		3,214
NBC Textbooks, LLC		11-12004		20-1831425		3,966,576
College Bookstores of America, Inc.		11-12009		36-3309518		15,482,247
Campus Authentic, LLC		11-12003		90-0439156		—
Net Textstore, LLC		11-12002		14-1996469		150,000

Total					$	79,373,593

The disbursement information is based on the company’s books and records that are maintained and prepared under Generally Accepted Accounting Principles (“GAAP”). The information has not been audited.

September 29, 2011

Office of the United States Trustee

Subject: August Monthly Operating Report Attestation Regarding Bank Account Reconciliations

The Debtor, Nebraska Book Company, Inc. and its affiliated Debtors, hereby submits this attestation regarding bank account reconciliations in lieu of providing copies of bank statements and copies of all account reconciliations.

The Debtor has, on a timely basis, performed all bank account reconciliations in the ordinary course of its business. Copies of bank account statements and reconciliations are available for inspection upon request by the United States Trustee’s Office.



	/s/ Amanda L. Towne
	Name:	Amanda L. Towne
	Position: Chief Accounting Officer

Sworn to and Subscribed
before me on this 29^th
day of September, 2011


/s/ Mary A. Lockard Notary Public

My Commission Expires: March 5, 2013

Nebraska Book Company, Inc., et al.
MOR 2
(DEBTOR IN POSSESSION AS OF JUNE 27, 2011)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE FIVE MONTHS ENDED AUGUST 31, 2011
(UNAUDITED)


																	COLLEGE
	CONSOLIDATED NBC						NBC ACQUISITION			NEBRASKA BOOK			NBC TEXTBOOKS,		NET TEXTSTORE,		BOOKSTORES OF			SPECIALTY			CAMPUS
	ACQUIS CORP			ELIMINATIONS			CORP			COMPANY, INC.			LLC		LLC		AMERICA			BOOKS, INC.			AUTHENTIC
REVENUES, net of returns	$	264,423,313		$	(22,517,293	)	$	—		$	139,820,249		$	73,180,618	$	4,310,834	$	66,844,920		$	2,723,454		$	60,531

COSTS OF SALES (exclusive of depreciation shown below)		158,136,823			(22,662,656	)		—			89,816,702			40,997,145		1,653,635		46,233,828			2,047,718			50,451


Gross profit		106,286,490			145,363			—			50,003,547			32,183,473		2,657,199		20,611,092			675,736			10,080

OPERATING EXPENSES:
Selling, general and administrative		75,404,794			145,363			—			52,524,129			7,275,900		1,693,082		13,097,642			661,208			7,470
Depreciation		3,401,532			—			—			2,601,670			311,515		2,158		474,568			11,621			—
Amortization		3,359,413			—			—			698,578			2,228,795		—		389,375			42,665			—
Stock-based compensation		14,550			—			—			14,550			—		—		—			—			—
Intercompany administrative charge		—			—			—			(3,838,885	)		1,521,400		119,000		2,085,485			113,000			—


		82,180,289			145,363			—			52,000,042			11,337,610		1,814,240		16,047,070			828,494			7,470


INCOME (LOSS) FROM OPERATIONS		24,106,201			—			—			(1,996,495	)		20,845,863		842,959		4,564,022			(152,758	)		2,610

OTHER EXPENSES — INCOME:
Interest expense		19,102,746			—			2,082,725			17,020,015			—		—		—			6			—
Interest income		14,476			—			—			4,820			—		—		9,192			464			—


		19,088,270			—			2,082,725			17,015,195			—		—		(9,192	)		(458	)		—


INCOME (LOSS) BEFORE REORGANIZATION ITEMS AND INCOME TAXES		5,017,931			—			(2,082,725	)		(19,011,690	)		20,845,863		842,959		4,573,214			(152,300	)		2,610

REORGANIZATION ITEMS		9,650,198			—			—			9,650,198			—		—		—			—			—


INCOME (LOSS) BEFORE INCOME TAXES		(4,632,267	)		—			(2,082,725	)		(28,661,888	)		20,845,863		842,959		4,573,214			(152,300	)		2,610

INCOME TAX EXPENSE (BENEFIT)		1,534,000			—			(729,000	)		(7,812,000	)		8,003,000		300,000		1,826,000			(54,000	)		—


NET INCOME (LOSS)	$	(6,166,267	)	$	—		$	(1,353,725	)	$	(20,849,888	)	$	12,842,863	$	542,959	$	2,747,214		$	(98,300	)	$	2,610

Nebraska Book Company, Inc., et al.
MOR 3
(DEBTOR IN POSSESSION AS OF JUNE 27, 2011)
CONSOLIDATED BALANCE SHEETS
AUGUST 31, 2011 (UNAUDITED)


																		COLLEGE
	CONSOLIDATED NBC						NBC ACQUISITION			NEBRASKA BOOK			NBC TEXTBOOKS,			NET TEXTSTORE,		BOOKSTORES OF			SPECIALTY			CAMPUS
	ACQUIS CORP			ELIMINATIONS			CORP			COMPANY, INC.			LLC			LLC		AMERICA			BOOKS, INC.			AUTHENTIC

ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	95,036,311		$	—		$	—		$	89,694,762		$	—		$	—	$	5,402,776		$	(61,227	)	$	—
Intercompany receivable (payable)		—			(26,832,749	)		26,832,749			(119,572,548	)		156,293,646			4,243,496		(37,977,637	)		(2,948,755	)		(38,202	)
Receivables, net		117,469,279						42			43,811,482			38,039,387			355,657		34,160,360			1,092,122			10,229
Inventories		116,687,534			—			—			72,100,366			17,916,607			2,004,318		23,155,785			1,510,458			—
Recoverable income taxes		1,837,358			—			—			1,837,358			—			—		—			—			—
Deferred income taxes		7,702,819			—			(45,585	)		924,404			6,100,000			—		626,000			98,000			—
Prepaid expenses and other assets		39,579,124			—			—			33,188,870			506,133			—		5,682,967			201,154			—

		378,312,425			(26,832,749	)		26,787,206			121,984,694			218,855,773			6,603,471		31,050,251			(108,248	)		(27,973	)

PROPERTY AND EQUIPMENT, net of depreciation & amortization		38,765,288			—			—			33,342,839			967,805			67,451		4,061,154			326,039			—
GOODWILL		129,436,730			—			—			113,765,621			—			—		15,671,109			—			—

IDENTIFIABLE INTANGIBLES, net of amortization		109,160,010			—			—			38,923,219			66,824,912			—		2,152,929			1,258,950			—
DEBT ISSUE COSTS, net of amortization		1,817,761			—			446,950			1,370,811			—			—		—			—			—
INVESTMENT IN SUBSIDIARIES		—			(147,614,517	)		(3,676,420	)		151,290,937			—			—		—			—			—
OTHER ASSETS		1,640,159			—			—			1,424,016			(46,100	)		—		262,243			—			—

	$	659,132,373		$	(174,447,266	)	$	23,557,736		$	462,102,137		$	286,602,390		$	6,670,922	$	53,197,686		$	1,476,741		$	(27,973	)

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable	$	40,446,275		$	—		$	—		$	32,250,532		$	797,458		$	6,372	$	7,016,207		$	375,413		$	293
Accrued employee compensation and benefits		8,086,898			—			—			5,712,283			1,216,176			—		1,128,372			30,067			—
Accrued interest		2,364,092			—			—			2,364,092			—			—		—			—			—
Accrued incentives		5,847,624			—			—			2,691			5,844,933			—		—			—			—
Accrued expenses		8,319,844			—			—			4,065,267			8,274			—		4,241,523			4,780			—
Income taxes payable		—			—			—			(93,471,961	)		86,412,759			1,755,000		5,480,246			(171,511	)		(4,533	)
Deferred revenue		4,343,191			—			—			4,340,096			—			—		3,095			—			—
Current maturities of long-term debt		199,928,694			—			—			199,928,694			—			—		—			—			—
DIP term loan facility		123,964,578			—			—			123,964,578			—			—		—			—			—

Total current liabilities		393,301,196			—			—			279,156,272			94,279,600			1,761,372		17,869,443			238,749			(4,240	)
LONG-TERM DEBT, net of current maturities		95,802			—			—			95,802			—			—		—			—			—
DEFERRED INCOME TAXES		41,135,157			—			(10,292,472	)		24,733,629			25,225,000			7,000		969,000			493,000			—
LIABILITIES SUBJECT TO COMPROMISE		270,140,175			(26,832,749	)		79,390,165			215,005,557			32,780			3,076		2,406,515			134,831			—
COMMITMENTS
REDEEMABLE PREFERRED STOCK
Series A redeemable preferred stock, $.01 par value, 20,000 shares authorized, 10,000 shares outstanding at redemption value		14,076,596			—			14,076,596						—			—		—			—			—
STOCKHOLDERS’ EQUITY (DEFICIT):
Common stock, voting, authorized 5,000,000 shares of $.01 par value; 554,094 shares issued and outstanding		5,541			(100	)		5,541			100			—			—		—			—			—
Additional paid-in capital		111,295,839			(210,374,687	)		111,295,839			148,287,638			59,817,667			—		346,232			1,923,150			—
Note receivable from stockholder		(94,716	)		—			(94,716	)					—			—		—			—			—
Retained earnings (Accumulated deficit)		(170,823,217	)		62,760,270			(170,823,217	)		(205,176,861	)		107,247,343			4,899,474		31,606,496			(1,312,989	)		(23,733	)

Total stockholders’ equity (deficit)		(59,616,553	)		(147,614,517	)		(59,616,553	)		(56,889,123	)		167,065,010			4,899,474		31,952,728			610,161			(23,733	)

	$	659,132,373		$	(174,447,266	)	$	23,557,736		$	462,102,137		$	286,602,390		$	6,670,922	$	53,197,686		$	1,476,741		$	(27,973	)

September 29, 2011

Office of the United States Trustee

Subject: August Monthly Operating Report Attestation Regarding Post-petition Taxes

The Debtor, Nebraska Book Company, Inc. and its affiliated Debtors, hereby submit this attestation regarding post-petition taxes.

All post-petition taxes for the Debtors, which are not subject to dispute or reconciliation, are current. There are no material tax disputes or reconciliations.



	/s/ Amanda L. Towne
	Name:	Amanda L. Towne
	Position: Chief Accounting Officer

Sworn to and Subscribed
before me on this 29^th
day of September, 2011


/s/ Mary A. Lockard Notary Public

My Commission Expires: March 5, 2013

Nebraska Book Company, Inc., et al.,
MOR 5
Accounts Reconciliation and Aging
August 2011

ACCOUNTS RECEIVABLE RECONCILIATION AND AGING (1)


Accounts Receivable Reconciliation	Amount

Total Accounts Receivable at the Beginning of the Reporting Period	$	59,898,700

Plus: Amounts billed during the period		74,438,928
Less: Amounts collected during the period		(23,073,147	)
Less: Amounts written off or returned during the period		(1,933,170	)
Less: Customer rebates applied against receivable		(772,835	)
Plus (less): Miscellaneous Other		(232,712	)


Change in accounts receivable, net		48,427,064


Total Accounts Receivable		108,325,764
Less: Allowance for uncollectible accounts		(1,283,360	)

Total Accounts Receivable,net at the End of the Reporting Period	$	107,042,404


Accounts Receivable Aging	8/31/2011

0-30 days old		66,464,988
31-60 days old		26,427,989
61-90 days old		10,248,698
Over 90 days old		5,184,089

Total Aged Accounts Receivable		108,325,764
Less: Allowance for uncollectible accounts		(1,283,360	)

Net Accounts Receivable	$	107,042,404


(1)		“Accounts receivable” in the accompanying Balance Sheet under Form MOR-3 includes certain items which are not included in this table, including receivables for returns to publishers and buy funds receivable.

Nebraska Book Company, Inc., et al.,
MOR 6
Payments to Professionals
August 2011


Name	Amount
Kurtzman Carson Consultants, LLC	$	464,064


Total	$	464,064

The Professional Fees information is based on the company’s books and records that are maintained and prepared under Generally Accepted Accounting Principles (“GAAP”). The information has not been audited.

In re: Nebraska Book Company, Inc., et al.,


Case No. (Jointly Administered)		11-12005(PJW)
Reporting Period:		August 31, 2011
		MOR 7
Federal Tax I.D. #		47-0549819

Debtor Questionnaire


Must be completed each month. If the answer to any of the questions is “Yes”, provide a detailed explanation
of each item. Attach additional sheets if necessary.	Yes	No
1 Have any assets been sold or transferred outside the normal course of business this reporting period?		X
2 Have any funds been disbursed from any account other than a debtor in possession account this reporting period?		X
3 Is the Debtor delinquent in the timely filing of any post-petition tax returns?		X
4 Are workers compensation, general liability or other necessary insurance coverages expired or cancelled, or has the debtor received notice of expiration or cancellation of such policies?		X
5 Is the Debtor delinquent in paying any insurance premium payment?		X
6 Have any payments been made on pre-petition liabilities this reporting period?	X
7 Are any post petition receivables (accounts, notes or loans) due from related parties?		X
8 Are any post petition payroll taxes past due?		X
9 Are any post petition State or Federal income taxes past due?		X
10 Are any post petition real estate taxes past due?		X
11 Are any other post petition taxes past due?		X
12 Have any pre-petition taxes been paid during this reporting period?	X
13 Are any amounts owed to post petition creditors delinquent?		X
14 Are any wage payments past due?		X
15 Have any post petition loans been received by the Debtor from any party?		X
16 Is the Debtor delinquent in paying any U.S. Trustee fees?		X
17 Is the Debtor delinquent with any court ordered payments to attorneys or other professionals?		X
18 Have the owners or shareholders received any compensation outside of the normal course of business?		X

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NBC ACQUISITION CORP Reports

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