This was originally published in mid-January, but it just crossed my desk this morning,
Over at InvestorPlace Bret Kerwell lays out the figures that show B&N is just one bad quarter away from having to file for bankruptcy.
As of the most recent quarter, the company has $11.2 million in cash and $63.7 million in accounts receivable. While it doesn’t have any short-term debt, it does have over $621 million in accounts payable. Further, long-term debt sits at $278 million.
Despite this seemingly lopsided situation, the company still pays out a dividend. Its yield is near 9.9%, a red flag to be sure. And even though the company turned in one of its best holiday comps in recent memory, management warned on profit, saying it may fall up to 10% year-over-year.
It’s been years since since BKS turned in an annual income statement without red ink on its net income line. This one’s bankruptcy seems inevitable at some point down the road.
It’s not just doom and gloom; Barnes & Noble really is in dire financial straits, just like its quarterly reports suggested.
The company is one bad quarter away from needing to file for bankruptcy protection and pray that it can work something out with its suppliers.
And we all know how well that worked out for Borders, don’t we?