Borders Group reports drop in income because of one-time charge

Friday, March 16th 2001, 12:00 am
By: News On 6

ANN ARBOR, Mich. (AP) _ Book retailer Borders Group Inc. said its net income for the fourth quarter dropped 48 percent because of costs related to its Internet operations and subsidiary WaldenBooks.

Ann Arbor-based Borders reported earnings of $51.1 million, or 64 cents per share for the quarter ended Jan. 28, compared with $98.5 million, or $1.23 per share, the same time a year ago.

Without the one-time charge of $47.6 million, the company reported net income of $98.7, or $1.23 a share, compared with $98.9 million, or $.121 a share, a year ago.

Borders' performance was 1 cent per share higher than Wall Street analysts' consensus estimate for the quarter, the Ann Arbor-based book and music retailer said.

Consolidated sales, including domestic Borders superstores, international operations, Waldenbooks and, totaled $1.19 billion for the quarter ending Jan. 28. Sales a year earlier came to $1.07 billion.

For the fiscal year, Borders earned $267 million, or $1.21 per share, up 3 percent from fiscal 1999. A 14-percent increase in Borders superstore sales helped drive consolidated sales to a record $3.24 billion, up 10.2 percent from fiscal 1999.

Quarterly and yearly earnings did not include one-time charges and costs of discontinuing the All Wound Up toy store division, Borders said.

Borders stock gained 9 cents to close at $15.29 per share Thursday on the New York Stock Exchange.

Borders projects earnings of $1.38 to $1.40 per share, excluding one-time charges, for its 2001 fiscal year. The projection is based in part on completion of a special order and online book fulfillment agreement with Ingram Book Group.

The Ingram agreement is expected to result in a one-time, after-tax charge of between $15 million and $20 million in the first quarter, Borders said.

Borders employs 30,000 people worldwide and operates 335 Borders domestic superstores, 14 international Borders stores, 31 Books etc. locations, 869 Waldenbooks stores and