We were pleased, in 2003, to have achieved the following results:
- Rebounding solidly from a negative first quarter, consolidated sales grew by more than 7% in each successive quarter, compared to prior-year results. We ended 2003 with consolidated sales of $3.7 billion, a gain of 6.1% over 2002.
- Led by strong fourth quarter profits of nearly $120 million, we generated full-year consolidated earnings per share of $1.52, an 11.8% increase compared to $1.36 per share in 2002.
- Our international operations reached a significant milestone, achieving its first full year of profitability, while increasing sales nearly 30%.
- We strengthened our balance sheet, ending 2003 with cash, net of debt, of $180.4 million, a 69.5% increase compared to the prior year.
Wall Street rewarded us for our resiliency, sound management and commitment to consistent earnings growth, contributing to a 39.1% increase in the value of Borders Group common stock for fiscal year 2003, compared to a 34.7% increase for the S&P 500 for the same period.
To create additional shareholder value, our Board of Directors declared our first-ever cash dividend in November 2003. The quarterly dividend, of $0.08 per share, was paid to shareholders of our common stock in January 2004, and we intend to pay regular quarterly cash dividends going forward subject to Board approval. During the year, we also repurchased stock totaling $44.0 million as part of our long-term strategy to increase shareholder value.
Driving Cost Efficiencies, Targeting Top-Line Growth After recent years of lackluster performance, consumer book sales across the industry normalized in 2003 beginning in the second quarter, helped by the release of several major bestsellers, including "Harry Potter and the Order of the Phoenix." While we continued to increase our share of the overall retail book market — including selling more than 900,000 copies of J.K. Rowling's heroic tome worldwide in its first weekend of release alone — the majority of this growth came from opening new stores, rather than from same-store growth, which remains a key challenge.