Barnes & Noble Education, Inc.

Our primary sources of cash are net cash flows from operating activities, funds available under our Credit Agreement, and short-term vendor financing. Our liquidity is highly dependent on the seasonal nature of our business, particularly with respect to course material sales, as sales are generally highest in the second and third fiscal quarters, when college students purchase textbooks for the upcoming Fall and Spring semesters, respectively. As of August 1, 2026, we had $21.5 million of cash on hand, including $13.7 million of restricted cash primarily related to segregated funds for commission due to Lids for logo merchandise sales as per the F/L Relationship-related agreements.

Dividends

On June 24, 2026, our Board of Directors declared a quarterly cash dividend on our common stock in the amount of $0.08 per share of common stock outstanding, which was paid on July 30, 2026 to the holders of record as of July 16, 2026. Because our retained earnings reflected an accumulated deficit as of May 2, 2026, the $2.8 million dividend paid on July 30, 2026 was recorded as a reduction of additional paid-in capital rather than accumulated deficit. The payment, amount and timing of future dividends remain within the discretion of our Board of Directors and will depend on our results of operations, financial condition, cash requirements, and other factors.

We believe that our future cash from operations, access to borrowings under the Credit Facility Refinancing, and short-term vendor financing will provide adequate resources to fund our operating and financing needs for the next twelve months and beyond. To the extent that available funds are insufficient to fund our future activities, we may need to raise additional funds through public or private financing of debt or equity. Our access to, and the availability of, financing in the future will be impacted by many factors, including the liquidity of the overall capital markets and the current state of the economy. There can be no assurances that we will have access to capital markets on acceptable terms.

Liquidity

Sources and Uses of Cash Flows

As of August 1, 2026 and August 2, 2025, we had restricted cash of $13.7 million and $15.0 million, respectively, comprised of $11.4 million and $12.7 million, respectively, in prepaid and other current assets in the condensed Consolidated Balance Sheets related to segregated funds for commission due to Lids for logo merchandise sales as per the Lids service provider merchandising agreement and $2.3 million and $2.4 million, respectively, in other noncurrent assets in the condensed Consolidated Balance Sheets related to amounts held in trust for future distributions related to employee benefit plans.

Cash Flow from Operating Activities

Our business is highly seasonal. Cash flows from operating activities are typically a source of cash in the second and third fiscal quarters, when students generally purchase and rent textbooks and other course materials for the upcoming semesters based on the typical academic semester. Given the growth of our BNC First Day® programs, the timing of cash collection from our school partners may shift to periods subsequent to when the revenue is recognized. When a school adopts our BNC First Day® affordable access course material program offerings, cash collection from the school generally occurs after the institution's drop/add dates, which is later in the working capital cycle, particularly in our third quarter given the timing of the Spring Term and our quarterly reporting period, as compared to direct-to-student point-of-sale transactions where cash is generally collected during the point-of-sale transaction or within a few days from the credit card processor. As a higher percentage of our sales shift to BNC First Day® affordable access course material program offerings, we are focused on efforts to better align the timing of our cash outflows to course material vendors and cash inflows from collections from schools. Our quarterly cash flows also may fluctuate depending on the timing of the start of the various schools’ semesters, as well as shifts in our fiscal calendar dates. These shifts in timing may affect the comparability of our results across periods.

Cash flows used in operating activities during the 13 weeks ended August 1, 2026 were $(52.9) million compared to $(67.6) million during the 13 weeks ended August 2, 2025. The decrease in cash flows used in operating activities of $14.7 million was primarily due to cash benefit from lower textbook inventory offset by the timing of payables to vendors for inventory purchases and expenses.

Cash Flow from Investing Activities

Cash flows used in investing activities remained relatively consistent during the 13 weeks ended August 1, 2026 and August 2, 2025, respectively.

Cash Flow from Financing Activities

Cash flows provided by financing activities during the 13 weeks ended August 1, 2026 were $49.7 million compared to $65.0 million during the 13 weeks ended August 2, 2025. The decrease of $(15.3) million is primarily related to lower net borrowings required for the 13 weeks ended August 1, 2026 of $(14.4) million.

Capital Resources

Financing Arrangements

As of August 1, 2026, the Company’s revolving credit facility had a maximum borrowing capacity of $325 million with no borrowing base or collateral limitations, subject to compliance with applicable covenants with $123.5 million outstanding.

Share Repurchases

During the 13 weeks ended August 1, 2026 and August 2, 2025 we did not repurchase any of our Common Stock under the stock repurchase program. As of August 1, 2026, approximately $26.7 million remains available under the stock repurchase program.

Critical Accounting Estimates

Our policies regarding the use of estimates and other critical accounting policies are consistent with the disclosures in Part

II - Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimatesin our Form 10-K for the fiscal year ended May 2, 2026.