EX-99.1

EX-99.1 2 d304748dex991.htm EX-99.1 EX-99.1

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:		December 1 – December 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.

	September 30,	September 30,	September 30,
DOCUMENTS	Form No.	Document Attached	Explanation Attached
Schedule of Disbursements	MOR-1a	x
Bank Account Information	MOR-1b	x	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/ Alexi A. Wellman				February 17, 2012
Signature of Authorized Individual*				Date

Alexi A. Wellman
Printed Name of Authorized Individual

Chief Financial 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

December 2011

		September 30,		September 30,		September 30,
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		40,577,535
Specialty Books, Inc.		11-12007		75-3044807		10,017
NBC Textbooks, LLC		11-12004		20-1831425		21,299,483
College Bookstores of America, Inc.		11-12009		36-3309518		13,832,640
Campus Authentic, LLC		11-12003		90-0439156		—
Net Textstore, LLC		11-12002		14-1996469		20,000

Total					$	75,739,675

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

December 2011

		September 30,
Last 4 digits of Account Number	Book Balance December 31, 2011

Main Corporate Accounts
7107	$	37,915,176
3259		(60,024	)
0248		350,000
5099		91,596
9988		1,032
7131		(2,874	)
8027		(5,770	)
7107		(2,646,130	)

Change Fund		7,945,753

Aggregate individual bookstore accounts		9,724,999	(1)

	$	53,313,758

(1)	Individual bookstore accounts are swept periodically into the corporate account.

February 17, 2012

Office of the United States Trustee

Subject: December 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/ Alexi A. Wellman

Name: Alexi A. Wellman

Position: Chief Financial Officer

Sworn to and Subscribed

before me on this 17^th

day of February, 2012

/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 NINE MONTHS ENDED DECEMBER 31, 2011

(UNAUDITED)

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

REVENUES, net of returns	$	382,239,549		A	$	(34,157,672	)		—		$	212,135,083		$	106,442,885	$	6,682,011	$	86,291,946		$	4,690,868		$	154,428

COSTS OF SALES (exclusive of depreciation shown below)		234,074,742				(34,178,121	)		—			137,821,582			66,075,743		2,644,911		58,581,510			3,000,442			128,675


Gross profit		148,164,807		A		20,449			—			74,313,501			40,367,142		4,037,100		27,710,436			1,690,426			25,753

OPERATING EXPENSES:
Selling, general and administrative		126,036,287				20,449			—			89,155,720			12,619,665		2,459,320		20,663,956			1,094,221			22,956
Depreciation		5,889,678				—			—			4,476,526			555,315		8,170		828,804			20,863			—
Amortization		6,036,938				—			—			1,279,282			4,019,963		—		659,695			77,998			—
Impairment		122,638,927				—			—			106,726,036			—		—		15,912,891			—			—
Stock-based compensation		26,004				—			—			26,004			—		—		—			—			—
Intercompany administrative charge		—				—			—			(6,565,150	)		2,766,700		140,400		3,561,300			96,750			—


		260,627,834				20,449			—			195,098,418			19,961,643		2,607,890		41,626,646			1,289,832			22,956

INCOME (LOSS) FROM OPERATIONS		(112,463,027	)			—			—			(120,784,917	)		20,405,499		1,429,210		(13,916,210	)		400,594			2,797

OTHER EXPENSES (INCOME)
Interest expense		30,827,868				—			2,082,725			28,744,849			158		130		—			6			—
Interest income		(14,476	)			—			—			1,367			—		—		(15,202	)		(641	)		—

		30,813,392				—			2,082,725			28,746,216			158		130		(15,202	)		(635	)		—

INCOME (LOSS) BEFORE REORGANIZATION ITEMS AND INCOME TAXES		(143,276,419	)			—			(2,082,725	)		(149,531,133	)		20,405,341		1,429,080		(13,901,008	)		401,229			2,797

REORGANIZATION ITEMS		20,613,810				—			—			20,613,810			—		—		—			—			—


INCOME (LOSS) BEFORE INCOME TAXES		(163,890,229	)			—			(2,082,725	)		(170,144,943	)		20,405,341		1,429,080		(13,901,008	)		401,229			2,797

INCOME TAX EXPENSE (BENEFIT)		(29,828,000	)			—			(104,000	)		(32,768,000	)		7,490,000		525,000		(5,118,000	)		147,000			—


NET INCOME (LOSS)	$	(134,062,229	)		$	—		$	(1,978,725	)	$	(137,376,943	)	$	12,915,341	$	904,080	$	(8,783,008	)	$	254,229		$	2,797

A	Deferred rental revenue and gross profit as of December 31, 2011 are $726,247 and $341,102, respectively.

Nebraska Book Company, Inc., et al.

MOR 3

(DEBTOR IN POSSESSION AS OF JUNE 27, 2011)

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2011

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

ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	53,313,758		$	—		$	—		$	44,145,899		$	7,230,000	$	—		$	1,936,288		$	1,571		$	—
Intercompany receivable (payable)		—			(26,207,749	)		26,207,749			(109,873,375	)		154,047,655		4,165,408			(45,713,591	)		(2,590,830	)		(35,267	)
Receivables, net		67,788,011						42			19,204,672			34,758,729		265,959			12,942,205			608,502			7,902
Inventories		183,315,556			—			—			104,874,958			16,294,732		2,685,677			57,368,083			2,092,106			—
Recoverable income taxes		8,196,002			—			—			8,196,002			—		—			—			—			—
Deferred income taxes		7,334,819			—			(45,585	)		1,928,404			4,141,000		123,000			1,160,000			28,000			—
Prepaid expenses and other assets		41,755,973			—			—			28,217,200			4,380,156		—			9,130,559			28,058			—

		361,704,119			(26,207,749	)		26,162,206			96,693,760			220,852,272		7,240,044			36,823,544			167,407			(27,365	)
PROPERTY AND EQUIPMENT, net of depreciation & amortization		37,903,306			—			—			32,755,911			737,435		133,439			3,960,499			316,022			—
GOODWILL		7,599,064			—			—			7,599,064			—		—			—			—			—

IDENTIFIABLE INTANGIBLES, net of amortization		107,482,112			—			—			39,278,323			65,055,240		—			1,924,931			1,223,618			—
DEBT ISSUE COSTS, net of amortization		628,758			—			446,950			181,808			—		—			—			—			—
INVESTMENT IN SUBSIDIARIES		—			(20,353,382	)		(130,937,555	)		151,290,937			—		—			—			—			—
OTHER ASSETS		2,486,454			—			—			2,190,587			92,923		—			202,944			—			—

	$	517,803,813		$	(46,561,131	)	$	(104,328,399	)	$	329,990,390		$	286,737,870	$	7,373,483		$	42,911,918		$	1,707,047		$	(27,365	)

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable	$	58,859,798		$	—		$	—		$	36,451,756		$	3,989,800	$	(189	)	$	18,164,413		$	253,303		$	715
Accrued employee compensation and benefits		6,903,476			—			—			4,875,333			1,261,083		—			740,585			26,475			—
Accrued interest		1,767,271			—			—			1,767,271			—		—			—			—			—
Accrued incentives		5,146,103			—			—			13,938			5,132,165		—			—			—			—
Accrued expenses		4,751,083			—			—			3,675,829			13,807		—			1,055,273			6,174			—
Income taxes payable		—			—			—			(87,445,319	)		84,686,187		2,083,000			672,176			8,489			(4,533	)
Deferred revenue		3,606,146			—			—			3,385,047			—		—			221,099			—			—
Current maturities of long-term debt		95,871			—			—			95,871			—		—			—			—			—
DIP term loan facility		124,380,110			—			—			124,380,110			—		—			—			—			—

Total current liabilities		205,509,858			—			—			87,199,836			95,083,042		2,082,811			20,853,546			294,441			(3,818	)
LONG-TERM DEBT, net of current maturities		73,147			—			—			73,147			—		—			—			—			—
OTHER LONG-TERM LIABILITIES		20,000			—			—			20,000			—		—			—			—			—
DEFERRED INCOME TAXES		15,500,157			—			(10,292,472	)		1,528,629			24,484,000		27,000			(691,000	)		444,000			—
LIABILITIES SUBJECT TO COMPROMISE		470,126,743			(26,207,749	)		79,390,165			414,575,129			33,341		3,076			2,326,866			5,915			—
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		111,307,293			(210,384,514	)		111,307,293			148,297,465			59,817,667		—			346,232			1,923,150			—
Note receivable from stockholder		(96,343	)		—			(96,343	)					—		—			—			—			—
Retained earnings (Accumulated deficit)		(298,719,179	)		190,031,232			(298,719,179	)		(321,703,916	)		107,319,820		5,260,596			20,076,274			(960,459	)		(23,547	)

Total stockholders’ equity (deficit)		(187,502,688	)		(20,353,382	)		(187,502,688	)		(173,406,351	)		167,137,487		5,260,596			20,422,506			962,691			(23,547	)

	$	517,803,813		$	(46,561,131	)	$	(104,328,399	)	$	329,990,390		$	286,737,870	$	7,373,483		$	42,911,918		$	1,707,047		$	(27,365	)

February 17, 2012

Office of the United States Trustee

Subject: December 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/ Alexi A. Wellman

Name: Alexi A. Wellman

Position: Chief Financial Officer

Sworn to and Subscribed

before me on this 17^th

day of February, 2012

/s/ Mary A. Lockard

Notary Public

My Commission Expires: March 5, 2013

Nebraska Book Company, Inc., et al.

MOR5

Accounts Reconciliation and Aging

December 2011

ACCOUNTS RECEIVABLE RECONCILIATION AND AGING (1)

		September 30,
Accounts Receivable Reconciliation	Amount

Total Accounts Receivable at the Beginning of the Reporting Period	$	32,014,148

Plus: Amounts billed during the period		40,215,391
Less: Amounts collected during the period		(25,241,788	)
Less: Amounts written off or returned during the period		(1,934,695	)
Less: Customer rebates applied against receivable		(252,079	)
Plus (less): Miscellaneous Other		171,914


Change in accounts receivable, net		12,958,743


Total Accounts Receivable		44,972,891
Less: Allowance for uncollectible accounts		(1,283,360	)

Total Accounts Receivable,net at the End of the Reporting Period	$	43,689,531

		September 30,
Accounts Receivable Aging	12/31/2011

0-30 days old		30,855,096
31-60 days old		4,597,694
61-90 days old		(877,131	)
Over 90 days old		10,397,232

Total Aged Accounts Receivable		44,972,891
Less: Allowance for uncollectible accounts		(1,283,360	)

Net Accounts Receivable	$	43,689,531

(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

December 2011

		September 30,
Name	Amount
Kirkland & Ellis, LLP	$	311,054
AlixPartners, LLP		423,396
Mesirow Financial Consulting, LLC		74,433
Lowenstein Sandler PC		58,899
Stevens & Lee, PC		16,252
Pachulski Stang Ziehl & Jones LLP		190,309


Total	$	1,074,343

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


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

Debtor Questionnaire

	September 30,	September 30,	September 30,
	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