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There has certainly been much worry that book retailer, Borders Group (BGP), is headed for a bankruptcy filing. Two years ago, the company had to take a $42.5 million loan from Pershing Square Capital Management, which is the company's largest shareholder. Since then, the loan has undergone three renegotiations. Also, Borders has gone through two CEOs in 15 months and is trying to find ways to stay relevant as the market undergoes change from the digital revolution.But this week, the shareholders of the beleaguered company got some great news. Borders was able to repay the loan.
What's more, the latest quarter turned out to be fairly strong. Profits came to $59.9 million, or $0.91 per share, which compares to a profit of $29.6 million, or $0.48 per share in the same period a year ago. Although, revenues still declined by 13% to $946.5 million.
Of course, Borders saw the benefit from extreme cost cutting. This also involved the closing of 186 Waldenbooks stores.
Borders also took some steps to improve its capital structure with an amended revolving credit agreement. This boosts the amount to $700 million. There is also a $90 million term loan.
In Thursday's trading, the shares of Borders are up 54% to $2.64. However, the company still has much work to do. Then again, it will be easier in light of the improved financing position and cost structure.
Tom Taulli advises on business tax preparation and is also the author of a variety of books, including The Complete M&A Handbook. His website is at Taulli.com.
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Reader Comments (Page 1 of 1)
4-02-2010 @ 4:56PM
rgolub said...
I wonder how does the church feel about the bible being on a computer ???????????????/
A book is still better. Guess I'm old fashioned. A newspaper is garbage the next day.
There is a use for somethings but not for all things.
4-02-2010 @ 5:15PM
Ted said...
All you Hollywood weirdos can come out of the closet and cheat on eachother, molest one another and drop dead. But please.. PUHLEASE... DO NOT DESTROY BORDERS !!!. .ITS THE GREATEST BOOK STORE ON GODS GREEN EARTH! ITS AMAZING, ITS STUPENDOUS... Its more relevant than most things in this century. Its an American institution. I love this store. I love the selections. I love everything about it. DO NOT DESTROY BORDERS !!
4-02-2010 @ 5:29PM
David S. said...
Ted -- what does Hollywood have to do with Borders being in financial trouble? Book stores are failing because of the competition of the internet and people getting their books from other sources. You have some serious problems, pal. Hope you get some help.
4-02-2010 @ 6:05PM
John F.C. Taylor said...
Real books may be going the way of the dinosaur and dodo, but they'll live always for me. Book has to be paper and ink, not just some electronic pattern on a screen.
4-02-2010 @ 6:07PM
John F. C. Taylor said...
Real books are the only way to go if you treuly enjoy reading. There's just something about real paper and ink. Electronic words on a small screen just don't cut it.
4-02-2010 @ 10:56PM
micky eggs said...
it was the smart thing to do letting go of waldon books. no matter where you were a walden book store was near, all of them looking like a tornado had just passed by.it was like a drug store in the 50s with all the books on those book holders that kept spinning around.as for myself i'm a barnes and noble fan they have comfortable seats and couches and if it's raining out you better get there early becaus most constrution workers can't work.every couple of hours some body runs to the coffee shop 2 stores down and we have a little snack.i've made some good friends and read some wonderful books when it was raining in connecticut. borders i'm not that into them but i do buy books there a couple of times a year
4-02-2010 @ 7:45PM
Ida said...
Our Church thinks its wonderful that we can carry a bible in our purse on a palm pilot computer, anywhere anytime.
4-02-2010 @ 8:13PM
J. Pida said...
Books and book stores will remain. The stores may change and modify, but they'll remain. Currently, it is one of the greatest fallicies that the geeks and their megacorps along with 'Madison' avenue backed by big money that is being sold to us > that all books and their UNIQUE capabilities can be replaced by 0's and 1's on a screen and memory circuits. We're not Matrix batteries as much as that might appeal to the above mentioned people. We're messy analog and books have a deep, intrinsic psychological bond with the human mind - always have and always will ( until the dna is changed). Kindle and it's brethren will remain insignificant and those plans to replace school books with screens will fail as student intellectual capabilitites will fall. Try telling the children that it would be better to 'read' about Harry Potter on a screen then those big books on their shelves,,,yeah right.