NBC ACQUISITION CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - December 1, 2011

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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:
  September 1 — September 30, 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       Attached  
Schedule of Disbursements
   MOR-1a     x          
Bank Account Information
   MOR-1b             x  
Statement of Operations (Income Statement)
   MOR-2     x          
Balance Sheet
   MOR-3     x          
Status of Post-petition Taxes
   MOR-4             x  
Accounts Receivable Reconciliation and Aging
   MOR-5     x          
Payments to Professionals
   MOR-6     x          
Debtor Questionnaire
   MOR-7     x          
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
 
   November 22, 2011
 
    
Signature of Authorized Individual*
  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.
MOR1a
Disbursements
September 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       44,106,573  
Specialty Books, Inc.
     11-12007       75-3044807       2,012  
NBC Textbooks, LLC
     11-12004       20-1831425       3,428,278  
College Bookstores of America, Inc.
     11-12009       36-3309518       19,466,772  
Campus Authentic, LLC
     11-12003       90-0439156       —  
Net Textstore, LLC
     11-12002       14-1996469       110,000  
 
                      
Total
                   $ 67,113,635  
 
                      
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.

 

 

 

Nebraska Book Company, Inc., et al.
MOR1b
Account Balances
September 2011
         
Last 4 digits of   Book Balance  
Account Number   September 30, 2011  
 
Main Corporate Accounts
       
7107
   $ 116,310,494  
3259
     (906,269 )
0248
     350,000  
5099
     34,192  
9988
     801  
7131
     1,602  
8027
     (2,766 )
7107
     (7,192,744 )
 
Change Fund
     3,898,790  
 
        
Aggregate individual bookstore accounts
     7,708,948 (1)
 
      
 
   $ 120,203,048  
 
      
     
(1)   Individual bookstore accounts are swept periodically into the corporate account.

 

 

 

November 22, 2011
Office of the United States Trustee
Subject: September 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 28th
    
day of November, 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 SIX MONTHS ENDED SEPTEMBER 30, 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
   $ 305,796,420     $ (23,329,669 )   $ —     $ 169,649,551     $ 75,863,951     $ 5,562,497     $ 74,578,973     $ 3,410,586     $ 60,531  
 
                                                                        
COSTS OF SALES (exclusive of depreciation shown below)
     186,966,060       (23,360,189 )     —       108,897,668       44,708,869       2,157,746       51,963,473       2,548,042       50,451  
 
                                                      
 
                                                                        
Gross profit
     118,830,360       30,520       —       60,751,883       31,155,082       3,404,751       22,615,500       862,544       10,080  
 
                                                                        
OPERATING EXPENSES:
                                                                        
Selling, general and administrative
     92,384,951       30,520       —       64,941,193       8,493,896       2,286,011       15,842,313       783,375       7,643  
Depreciation
     4,050,496       —       —       3,087,217       372,788       2,590       573,923       13,978       —  
Amortization
     4,022,958       —       —       841,392       2,675,541       —       454,527       51,498       —  
Impairment
     122,638,927                       106,726,035                       15,912,892       —       —  
Stock-based compensation
     17,460       —       —       17,460       —       —       —       —       —  
Intercompany administrative charge
     —       —       —       (4,474,500 )     1,942,200       93,600       2,374,200       64,500       —  
 
                                                      
 
                                                                        
 
     223,114,792       30,520       —       171,138,797       13,484,425       2,382,201       35,157,855       913,351       7,643  
 
                                                      
 
                                                                        
INCOME (LOSS) FROM OPERATIONS
     (104,284,432 )     —       —       (110,386,914 )     17,670,657       1,022,550       (12,542,355 )     (50,807 )     2,437  
 
                                                                        
OTHER EXPENSES — INCOME:
                                                                        
Interest expense
     22,181,967       —       2,082,725       20,099,108       128       —       —       6       —  
Interest income
     14,476       —       —       3,316       —       —       10,696       464       —  
 
                                                      
 
                                                                        
 
     22,167,491       —       2,082,725       20,095,792       128       —       (10,696 )     (458 )     —  
 
                                                      
 
                                                                        
INCOME (LOSS) BEFORE REORGANIZATION ITEMS AND INCOME TAXES
     (126,451,923 )     —       (2,082,725 )     (130,482,706 )     17,670,529       1,022,550       (12,531,659 )     (50,349 )     2,437  
 
                                                                        
REORGANIZATION ITEMS
     15,266,488       —       —       15,266,488       —       —       —       —       —  
 
                                                      
 
                                                                        
INCOME (LOSS) BEFORE INCOME TAXES
     (141,718,411 )     —       (2,082,725 )     (145,749,194 )     17,670,529       1,022,550       (12,531,659 )     (50,349 )     2,437  
 
                                                                        
INCOME TAX EXPENSE (BENEFIT)
     (26,348,000 )     —       (50,000 )     (28,534,000 )     6,493,000       376,000       (4,614,000 )     (19,000 )     —  
 
                                                      
 
                                                                        
NET INCOME (LOSS)
   $ (115,370,411 )   $ —     $ (2,032,725 )   $ (117,215,194 )   $ 11,177,529     $ 646,550     $ (7,917,659 )   $ (31,349 )   $ 2,437  
 
                                                      

 

 

 

Nebraska Book Company, Inc., et al.
MOR 3
(DEBTOR IN POSSESSION AS OF JUNE 27, 2011)
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 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
   $ 120,203,048     $ —     $ —     $ 114,604,165     $ 2,849,000     $ —     $ 2,861,492     $ (111,609 )   $ —  
Intercompany receivable (payable)
     —       (26,153,749 )     26,153,749       (128,620,968 )     165,397,097       4,530,919       (38,393,768 )     (2,889,282 )     (23,998 )
Receivables, net
     89,378,501               42       34,314,644       22,278,374       123,736       31,766,053       899,855       (4,203 )
Inventories
     150,698,244       —       —       90,090,296       17,239,524       2,056,839       39,379,561       1,932,024       —  
Recoverable income taxes
     2,869,703       —       —       2,869,703       —       —       —       —       —  
Deferred income taxes
     11,020,819       —       (45,585 )     3,927,404       5,675,000       —       1,360,000       104,000       —  
Prepaid expenses and other assets
     14,782,279       —       —       11,256,001       2,924,742       —       585,553       15,983       —  
 
                                                      
 
     388,952,594       (26,153,749 )     26,108,206       128,441,245       216,363,737       6,711,494       37,558,891       (49,029 )     (28,201 )
PROPERTY AND EQUIPMENT, net of depreciation & amortization
     38,192,372       —       —       32,824,728       906,352       139,020       3,998,590       323,682       —  
GOODWILL
     7,599,064       —       —       7,599,064       —       —       —       —       —  
 
                                                                        
IDENTIFIABLE INTANGIBLES, net of amortization
     108,666,060       —       —       39,057,678       66,378,166       —       1,980,099       1,250,117       —  
DEBT ISSUE COSTS, net of amortization
     1,351,689       —       446,950       904,739       —       —       —       —       —  
INVESTMENT IN SUBSIDIARIES
     —       (39,091,883 )     (112,199,054 )     151,290,937       —       —       —       —       —  
OTHER ASSETS
     2,382,262       —       —       2,133,783       31,439       —       217,040       —       —  
 
                                                      
 
   $ 547,144,041     $ (65,245,632 )   $ (85,643,898 )   $ 362,252,174     $ 283,679,694     $ 6,850,514     $ 43,754,620     $ 1,524,770     $ (28,201 )
 
                                                      
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
                                                                        
CURRENT LIABILITIES:
                                                                        
Accounts payable
   $ 50,318,027     $ —     $ —     $ 34,399,479     $ 2,017,882     $ 6,372     $ 13,478,286     $ 415,771     $ 237  
Accrued employee compensation and benefits
     7,853,937       —       —       5,772,919       1,210,669       —       846,166       24,183       —  
Accrued interest
     1,728,743       —       —       1,728,743       —       —       —       —       —  
Accrued incentives
     5,311,406       —       —       2,692       5,308,714       —       —       —       —  
Accrued expenses
     5,620,776       —       —       3,912,077       10,306       —       1,693,265       5,128       —  
Income taxes payable
     —       —       —       (86,255,491 )     84,662,389       1,831,000       (105,854 )     (127,511 )     (4,533 )
Deferred revenue
     18,544,196       —       —       15,459,234       —       —       3,084,962       —       —  
Current maturities of long-term debt
     199,982,456       —       —       199,982,456       —       —       —       —       —  
DIP term loan facility
     124,066,758       —       —       124,066,758       —       —       —       —       —  
 
                                                      
Total current liabilities
     413,426,299       —       —       299,068,867       93,209,960       1,837,372       18,996,825       317,571       (4,296 )
LONG-TERM DEBT, net of current maturities
     90,214       —       —       90,214       —       —       —       —       —  
DEFERRED INCOME TAXES
     17,584,157       —       (10,292,472 )     1,490,629       25,040,000       7,000       849,000       490,000       —  
LIABILITIES SUBJECT TO COMPROMISE
                                                                        
COMMITMENTS
                                                                       
REDEEMABLE PREFERRED STOCK
     270,784,962       (26,153,749 )     79,390,165       214,854,388       30,058       3,076       2,620,940       40,084       —  
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
     111,298,749       (210,377,197 )     111,298,749       148,290,148       59,817,667       —       346,232       1,923,150       —  
Note receivable from stockholder
     (95,116 )     —       (95,116 )             —       —       —       —       —  
Retained earnings (Accumulated deficit)
     (280,027,361 )     171,285,414       (280,027,361 )     (301,542,172 )     105,582,009       5,003,066       20,941,623       (1,246,035 )     (23,905 )
 
                                                      
Total stockholders’ equity (deficit)
     (168,818,187 )     (39,091,883 )     (168,818,187 )     (153,251,924 )     165,399,676       5,003,066       21,287,855       677,115       (23,905 )
 
                                                      
 
   $ 547,144,041     $ (65,245,632 )   $ (85,643,898 )   $ 362,252,174     $ 283,679,694     $ 6,850,514     $ 43,754,620     $ 1,524,770     $ (28,201 )
 
                                                      

 

 

 

November 22, 2011
Office of the United States Trustee
Subject: September 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 28th
    
day of November, 2011
    
 
    
/s/ Mary A. Lockard
 
Notary Public
   
My Commission Expires: March 5, 2013

 

 

 

Nebraska Book Company, Inc., et al.
MOR5
Accounts Reconciliation and Aging
September 2011
ACCOUNTS RECEIVABLE RECONCILIATION AND AGING (1)
         
Accounts Receivable Reconciliation   Amount  
 
Total Accounts Receivable at the Beginning of the Reporting Period
   $ 108,325,764  
 
Plus: Amounts billed during the period
     21,917,322  
Less: Amounts collected during the period
     (43,041,582 )
Less: Amounts written off or returned during the period
     (2,104,763 )
Less: Customer rebates applied against receivable
     (794,174 )
Plus (less): Miscellaneous Other
     107,920  
 
      
 
        
Change in accounts receivable, net
     (23,915,277 )
 
      
 
        
Total Accounts Receivable
     84,410,487  
Less: Allowance for uncollectible accounts
     (1,283,360 )
 
      
Total Accounts Receivable,net at the End of the Reporting Period
   $ 83,127,127  
 
      
         
Accounts Receivable Aging   9/30/2011  
 
0-30 days old
     18,156,123  
31-60 days old
     37,293,942  
61-90 days old
     19,436,860  
Over 90 days old
     9,523,562  
 
        
Total Aged Accounts Receivable
     84,410,487  
Less: Allowance for uncollectible accounts
     (1,283,360 )
 
      
Net Accounts Receivable
   $ 83,127,127  
 
      
     
(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.
MOR6
Payments to Professionals
September 2011
         
Name   Amount  
Kirkland & Ellis, LLP
   $ 615,758  
AlixPartners, LLP
     553,084  
Blackstone Advisory Services L.P.
        
Mesirow Financial Consulting, LLC
     154,101  
Lowenstein Sandler PC
     121,957  
Stevens & Lee, PC
     19,970  
Kurtzman Carson Consultants, LLC
     257,714  
 
      
 
Total
   $ 1,722,584  
 
      
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:
  September 30, 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  

 

 

NBC ACQUISITION CORP Reports