NBC ACQUISITION CORP - FORM 8-K - EX-99.2 - EXHIBIT 99.2

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8-K - FORM 8-K - NBC ACQUISITION CORP	c25407e8vk.htm
EX-99.1 - EXHIBIT 99.1 - NBC ACQUISITION CORP	c25407exv99w1.htm

EXHIBIT 99.2

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE

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


		Case No. (Jointly Administered) Reporting Period: Federal Tax I.D. #		11-12005(PJW) October 1 — October 31, 2011 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 Signature of Authorized Individual*				November 30, 2011 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
October 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		28,662,901
Specialty Books, Inc.	11-12007	75-3044807		183
NBC Textbooks, LLC	11-12004	20-1831425		2,878,700
College Bookstores of America, Inc.	11-12009	36-3309518		10,659,631
Campus Authentic, LLC	11-12003	90-0439156		—
Net Textstore, LLC	11-12002	14-1996469		—

Total			$	42,201,415

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
October 2011


Last 4 digits of	Book Balance
Account Number	October 31, 2011

Main Corporate Accounts
7107	$	121,587,056
3259		103,087
0248		350,000
5099		45,645
9988		777
7131		308
8027		(1,277	)
7107		(2,355,910	)

Change Fund		867,394

Aggregate individual bookstore accounts		5,256,188	(1)

	$	125,853,268


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

November 30, 2011

Office of the United States Trustee

Subject: October 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 30^th 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 SEVEN MONTHS ENDED OCTOBER 31, 2011 (UNAUDITED)		A Deferred rental revenue and gross profit as of October 31, 2011 are $8,812,514 and $4,484,833, respectively.


																	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	$	325,862,547	A	$	(24,581,709	)	$	—		$	184,144,027		$	77,406,235	$	5,847,927	$	78,988,711		$	3,965,107		$	92,249

COSTS OF SALES (exclusive of depreciation shown below)		200,289,371			(24,783,056	)		—			118,352,304			46,946,022		2,191,922		55,031,819			2,473,474			76,886


Gross profit		125,573,176	A		201,347			—			65,791,723			30,460,213		3,656,005		23,956,892			1,491,633			15,363

OPERATING EXPENSES:
Selling, general and administrative		103,776,802			201,347			—			73,221,336			9,843,009		2,167,519		17,413,878			917,933			11,780
Depreciation		4,653,785			—			—			3,541,159			433,743		3,021		659,562			16,300			—
Amortization		4,716,595			—			—			994,533			3,125,085		—		536,646			60,331			—
Impairment		122,638,927			—			—			106,726,036			—		—		15,912,891			—			—
Stock-based compensation		20,370			—			—			20,370			—		—		—			—			—
Intercompany administrative charge		—			—			—			(5,220,250	)		2,265,900		109,200		2,769,900			75,250			—


		235,806,479			201,347			—			179,283,184			15,667,737		2,279,740		37,292,877			1,069,814			11,780


INCOME (LOSS) FROM OPERATIONS		(110,233,303	)		—			—			(113,491,461	)		14,792,476		1,376,265		(13,335,985	)		421,819			3,583

OTHER EXPENSES — INCOME:
Interest expense		25,174,753			—			2,082,725			23,091,734			158		130		—			6			—
Interest income		14,476			—			—			1,788			—		—		12,224			464			—


		25,160,277			—			2,082,725			23,089,946			158		130		(12,224	)		(458	)		—


INCOME (LOSS) BEFORE REORGANIZATION ITEMS AND INCOME TAXES		(135,393,580	)		—			(2,082,725	)		(136,581,407	)		14,792,318		1,376,135		(13,323,761	)		422,277			3,583

REORGANIZATION ITEMS		16,173,100			—			—			16,173,100			—		—		—			—			—


INCOME (LOSS) BEFORE INCOME TAXES		(151,566,680	)		—			(2,082,725	)		(152,754,507	)		14,792,318		1,376,135		(13,323,761	)		422,277			3,583

INCOME TAX EXPENSE (BENEFIT)		(28,176,000	)		—			(28,000	)		(28,148,000	)		—		—		—			—			—


NET INCOME (LOSS)	$	(123,390,680	)	$	—		$	(2,054,725	)	$	(124,606,507	)	$	14,792,318	$	1,376,135	$	(13,323,761	)	$	422,277		$	3,583

Nebraska Book Company, Inc., et al.
MOR 3
(DEBTOR IN POSSESSION AS OF JUNE 27, 2011)
CONSOLIDATED BALANCE SHEETS *
OCTOBER 31, 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	$	125,853,268		$	—		$	—		$	123,930,248		$	—	$	—	$	1,921,506		$	1,514		$	—
Intercompany receivable (payable)		—			(26,131,749	)		26,131,749			(143,445,613	)		171,786,381		4,312,112		(30,320,472	)		(2,290,581	)		(41,827	)
Receivables, net		70,616,591						42			36,539,857			9,778,074		111,561		23,373,444			798,901			14,712
Inventories		114,499,974			—			—			62,413,507			23,217,710		2,641,837		24,652,745			1,574,175			—
Recoverable income taxes		9,737,488			—			—			9,737,488			—		—		—			—			—
Deferred income taxes		8,290,819			—			(45,585	)		3,833,404			3,896,000		—		506,000			101,000			—
Prepaid expenses and other assets		11,750,612			—			—			6,758,841			4,364,905		—		608,875			17,991			—

		340,748,752			(26,131,749	)		26,086,206			99,767,732			213,043,070		7,065,510		20,742,098			203,000			(27,115	)

PROPERTY AND EQUIPMENT, net of depreciation & amortization		38,357,482			—			—			33,101,976			844,539		138,588		3,958,025			314,354			—
GOODWILL		7,599,064			—			—			7,599,064			—		—		—			—			—

IDENTIFIABLE INTANGIBLES, net of amortization		107,972,424			—			—			38,904,538			65,928,622		—		1,897,980			1,241,284			—
DEBT ISSUE COSTS, net of amortization		1,020,557			—			446,950			573,607			—		—		—			—			—
INVESTMENT IN SUBSIDIARIES		—			(31,096,111	)		(120,194,826	)		151,290,937			—		—		—			—			—
OTHER ASSETS		1,599,195			—			—			1,395,115			—		—		204,080			—			—

	$	497,297,474		$	(57,227,860	)	$	(93,661,670	)	$	332,632,969		$	279,816,231	$	7,204,098	$	26,802,183		$	1,758,638		$	(27,115	)

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable	$	13,089,641		$	—		$	—		$	9,998,619		$	2,819,665	$	6,372	$	210,116		$	54,689		$	180
Accrued employee compensation and benefits		8,456,861			—			—			6,147,026			1,324,293		—		949,590			35,952			—
Accrued interest		1,705,092			—			—			1,705,092			—		—		—			—			—
Accrued incentives		5,058,400			—			—			2,691			5,055,709		—		—			—			—
Accrued expenses		4,750,092			—			—			3,724,832			10,590		—		1,009,193			5,477			—
Income taxes payable		—			—			—			(78,603,706	)		73,779,389		1,455,000		3,469,361			(95,511	)		(4,533	)
Deferred revenue		12,374,743			—			—			10,471,032			—		—		1,903,711			—			—
Current maturities of long-term debt		200,036,268			—			—			200,036,268			—		—		—			—			—
DIP term loan facility		124,172,344			—			—			124,172,344			—		—		—			—			—

Total current liabilities		369,643,441			—			—			277,654,198			82,989,646		1,461,372		7,541,971			607			(4,353	)

LONG-TERM DEBT, net of current maturities		84,576			—			—			84,576			—		—		—			—			—
DEFERRED INCOME TAXES		19,893,157			—			(10,292,472	)		1,020,629			27,651,000		7,000		1,033,000			474,000			—
LIABILITIES SUBJECT TO COMPROMISE		270,435,663			(26,131,749	)		79,390,165			214,514,300			161,121		3,076		2,345,458			153,292			—
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		111,301,659			(210,379,694	)		111,301,659			148,292,645			59,817,667		—		346,232			1,923,150			—
Note receivable from stockholder		(95,529	)		—			(95,529	)					—		—		—			—			—
Retained earnings (Accumulated deficit)		(288,047,630	)		179,283,683			(288,047,630	)		(308,933,479	)		109,196,797		5,732,650		15,535,522			(792,411	)		(22,762	)

Total stockholders’ equity (deficit)		(176,835,959	)		(31,096,111	)		(176,835,959	)		(160,640,734	)		169,014,464		5,732,650		15,881,754			1,130,739			(22,762	)

	$	497,297,474		$	(57,227,860	)	$	(93,661,670	)	$	332,632,969		$	279,816,231	$	7,204,098	$	26,802,183		$	1,758,638		$	(27,115	)

November 30, 2011

Office of the United States Trustee

Subject: October 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 30^th 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
October 2011

ACCOUNTS RECEIVABLE RECONCILIATION AND AGING (1)


Accounts Receivable Reconciliation	Amount

Total Accounts Receivable at the Beginning of the Reporting Period	$	84,410,487

Plus: Amounts billed during the period		5,233,443
Less: Amounts collected during the period		(40,081,838	)
Less: Amounts written off or returned during the period		(4,436,314	)
Less: Customer rebates applied against receivable		(300,757	)
Plus (less): Miscellaneous Other		6,239


Change in accounts receivable, net		(39,579,227	)


Total Accounts Receivable		44,831,260
Less: Allowance for uncollectible accounts		(1,283,360	)

Total Accounts Receivable,net at the End of the Reporting Period	$	43,547,900


Accounts Receivable Aging	10/31/2011

0-30 days old		7,440,008
31-60 days old		3,250,407
61-90 days old		20,008,604
Over 90 days old		14,132,241

Total Aged Accounts Receivable		44,831,260
Less: Allowance for uncollectible accounts		(1,283,360	)

Net Accounts Receivable	$	43,547,900


(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
October 2011


Name	Amount
Kirkland & Ellis, LLP	$	496,172
AlixPartners, LLP		262,798
Mesirow Financial Consulting, LLC		101,822
Lowenstein Sandler PC		74,533
Stevens & Lee, PC		20,007
Kurtzman Carson Consultants, LLC		120,457
Brown Rudnick LLP		79,192


Total	$	1,154,981

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:		October 31, 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 - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - December 1, 2011

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NBC ACQUISITION CORP Reports