Good day, and welcome to the Barnes & Noble Education Third Quarter 2016 Earning Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Thomas Donohue. Please go ahead, sir.

Thank you, and good morning. And welcome to our third quarter earnings call. Joining us today are Max Roberts, CEO; Patrick Maloney, President of Barnes & Noble College; Barry Brover, CFO; and Kanuj Malhotra, Chief Operating Officer of Digital Education, as well as other members of our senior management team. Before we begin, I would remind you that this call is covered by the safe harbor disclaimer contained in our press release and public documents and is the property of Barnes & Noble Education. It is not for rebroadcast or use by any other party without prior written consent of Barnes & Noble Education. During this call, we will be making forward-looking statements with predictions, projections and other statements about future events. These statements are based upon the current expectations and assumptions that are subject to risks and uncertainties, including those contained in our press release and public filings with the Securities and Exchange Commission. The company disclaims any obligation to update any forward-looking statements that may be made or discussed during this call. At this time, I will turn the call over to Max Roberts.

Good morning. As we disclosed, sales for the third quarter decreased 0.6%, and were 1% higher for the year-to-date. Our third quarter ended January 30, 2016, and includes the results of a partial Spring Rush. We continue to see shifts in the spending patterns of college students. Based on what we saw in February, students delayed the purchasing of the course materials extending the rush period to later in the semester. The Spring Rush sales of both textbooks and general merchandise extended past the end of the quarter. We have seen stronger results in February as compared to the same time last year. Our comparable sales for the quarter declined 4.1%. However, when we include sales for the first 3 weeks of February for this year and last year, the comparable sales for the quarter declined by 2.9%. This is a slight improvement from our second quarter comps. Declining enrollments in community colleges have contributed to the reduced sales in both the second and third quarters. As previously stated, approximately 25% of our sales come from the community colleges. Comparable store sales, excluding community colleges and factoring in the 3 additional weeks of February, decreased 1.2% for the period and 0.5% year-to-date or $6.2 million below last year. Enrollments for schools excluding community colleges are essentially flat for the Spring Rush period. As we look at sales for the quarter by merchandised category, our textbook sales declined 5.4% on a comparable basis primary -- primarily due to the later rush period and decreased enrollments in community colleges. Aggressive online market place pricing, digital direct courseware sales, OER content along with students' reluctance to purchase textbooks is providing some headwinds for course material sale. In order to combat these headwinds, we have successfully piloted our textbook price matching program on multiple…

Thank you, Max. This morning, we released our third quarter results for fiscal 2016. Please note that the third quarter ended on January 30, 2016, and consisted of 13 weeks. The results of operations for the 39 weeks ended January 31, 2015, and the 13 weeks ended August 1, 2015, reflected in our consolidated financial statements are presented on a standalone basis since we were still part of Barnes & Noble, Inc. until August 1, 2015. The results of operations for the 26 weeks ended January 30, 2016, reflected in our consolidated financial statements are presented on a consolidated basis as we became a separate public company. Please note all comparisons will be to the third quarter of fiscal 2015, unless otherwise noted. Total sales for the quarter were $518.4 million compared with $521.6 million from the prior-year period. The third quarter includes our spring back-to-school or rush sales and is our second largest quarter. This sales decrease of $3.2 million or 0.6%, was driven by our comp store sales decline of $22.1 million, partially offset by our net new business, which generated incremental sales of $18.4 million. As Max discussed, our comparable store sales declined 4.1% for the quarter and 2.7% year-to-date. The Spring Rush extended beyond the close of our fiscal third quarter and continued for an additional 3 weeks into February, where we had strong sales of textbooks and general merchandise. Factoring in these 3 weeks that contributed to the Spring Rush brings the comp sales decline for the period to 2.9% and 2.3% fiscal year-to-date. Textbook revenue declined $21.4 million in comparable stores, primarily due to lower new and used textbook sales, driven by the decrease in enrollment in 2-year community colleges as well as the factors that Max discussed. For the quarter, our general merchandise…

[Operator Instructions] And we'll take our first question from Alex Fuhrman with Craig-Hallum Capital Group.

First question I'd like to ask is more about the decision to outsource some of the digital platform that you've been building with Yuzu. I guess, would love to get a sense of what exactly, functionality-wise, you might be losing by outsourcing, and maybe if you could walk us through a little bit of the history of what exactly you guys were building with the $26 million a year? And what your thought had been 6 months, 12 months ago versus what's changed now? And do you still feel that Yuzu and FacultyEnlight is a really strong recruiting and sales area for you guys to really be winning new business with new schools?

Good morning, Alex. This is Max. Thank you for the question. If you go back, the Yuzu platform was conceived and built under the NOOK study, under the NOOK group and as part of it. And at the time, both publishers, ourselves, we felt that the e-textbook platform would be the significant e-learning tool and used by students and faculty. As that decision was made, we started developing, we had to start in order to build an entire facility, the software technology from the ground-up for a e-textbook platform. We also built an architecture that we thought would be expandable into a learning platform. Those were the costs that we had on a run rate of the $26 million. We soon with a sense of urgency, evaluated after we separated, that the e-textbook market was -- did not materialize to the expectations that we had in the publishers and we quickly started looking at other alternatives. The vision was always to have a learning platform along with the e-textbook platform. So therefore, we decided very -- we saw an opportunity to bifurcate the 2 products. We had the opportunity to acquire a learning platform, LoudCloud, and an outsourcer, VitalSource, to transfer the e-textbook. They also served as an e-textbook platform for a number of other companies. And we felt that, that was the most efficient use of capital. We -- and the acquisition of LoudCloud, we have a learning platform that's both classroom dashboards, LMS, different analytic tracking, competency-based education. That was the vision we always had to evolve Yuzu into. And as a result, by bifurcating, we have a very efficient provider of e-textbooks only. And then we have a learning platform that is offshored in the development. And also the ability to use its marketing staff to grow the digital services and learning platform business.

Great. That's helpful. And then I would also like to ask a little bit about the price match that you talked about on the conference call. Forgive me if you gave some of these numbers on the call and I missed it. But can you tell us how many schools you tested the price matching? And then how many schools do you think there's an opportunity to roll that out to looking out into the next year? And was there any sort of a discernible margin hit in those schools where you did the price match? And I'd just be curious if the lift you saw there was really driven by more aggressive pricing or maybe just more the marketing message around it just by telling students we have as low a price as anywhere else if, that just drove more traffic into your stores?

Yes. That's a great question and as we said, we will roll it out on a measured basis and making sure that what we saw in the schools early on continue the same trends. And I'll turn it over to Patrick, our President, who actually managed the process and manages the field.

Thanks, Max. We actually are live right now with 97 campuses across the United States with the price matching program. Our units were up on these campuses and the margin dollars associated with those units were also up in net margin dollars. So we'll be looking to expand this. We can't commit to how many campuses we're going to expand to for the fall, but it will be significant.

[Operator Instructions] And it appears there are no further questions at this time. So I'll turn it back over to our host for any additional or closing remarks.

Thank you. And thank you for joining today's call. Please note our next scheduled financial release will be our fiscal 2016 fourth quarter earnings call on or about June 28. Thank you all, and have a good day.

Thank you for your participation. This does conclude today's call.