AMARILLO, Texas, May 31, 2000 --
Hastings Entertainment, Inc. (Nasdaq: HAST - news), a leading multimedia
entertainment superstore retailer, today reported results for the quarter
ended April 30, 2001.
Total revenues decreased $1.0 million for the quarter
to $109.1 million compared to $110.1 million a year ago due to operating an
average of approximately three fewer superstores during the quarter compared
to the same period last year.
Total comparable store revenues (``Comps'') were
flat for the quarter; however, Comps for our primary retail categories,
merchandise and rental video, were -0.7% and +4.2%, respectively.
The decline
in merchandise Comps was primarily the result of lower sales of music product
during the first quarter of fiscal 2001 compared to a strong first quarter of
fiscal 2000, which included break-out releases from N'Sync, Santana and Dr.
Dre along with significant carryover sales from a fourth quarter fiscal 1999
release from Kid Rock.
Merchandise Comps excluding music would have been
+4.4% for the quarter ending April 30, 2001.
The increase in rental video
Comps was primarily the result of increased DVD rentals, stronger titles when
compared to last year and additional stores implementing our multi-night
rental program.
During the fourth quarter of fiscal 2000, we reviewed the net deferred tax
asset under the provisions set forth in Statement of Financial Accounting
Standards No. 109, ``Accounting for Income Taxes'' (SFAS 109).
While we believe
the entire deferred tax asset will be realized by future operating results,
due to the cumulative losses incurred in recent years the deferred tax asset
does not currently meet the stringent criteria for recognition under SFAS 109.
As a result, no income tax benefit was recorded during the quarter ended
April 30, 2001.
Net loss before tax was $0.8 million for the current quarter, or $0.07 per
common share, compared to a net loss before tax of $0.7 million, or $0.06 per
common share, a year ago.
``Our net loss for the period ending April 30, 2001 was right on our
estimate,'' stated Dan Crow, Vice President -- Finance and Chief Financial
Officer.
``Therefore, we are not changing our guidance on net income of
$0.40 per common share for fiscal year 2001.''
About Hastings Entertainment
Founded in 1968, Hastings Entertainment, Inc. is a leading multimedia
entertainment retailer that combines the sale of books, music, software,
periodicals, new and used DVDs, videos and video games with the rental of
videos, DVDs and video games in a superstore format.
We currently operate
142 superstores, averaging approximately 22,000 square feet, primarily in
small to medium-sized markets throughout the United States.
Hastings also operates www.gohastings.com, an e-commerce Internet Web site
that makes available to our customers new and used entertainment products and
unique, contemporary gifts and toys.
The site features exceptional product
and pricing offers.
Consolidated Statement of Operations
(Dollars in thousands, except per share data) (Unaudited)
Three Months Ended
April 30,
2001 2000
Merchandise revenue $ 86,614 $ 88,131
Rental video revenue 22,526 21,954
Total revenues 109,140 110,085
Merchandise cost of revenue 65,171 66,945
Rental video cost of revenue 10,842 8,270
Total cost of revenues 76,013 75,215
Gross profit 33,127 34,870
Selling, general and
administrative expenses 33,293 34,693
Pre-opening expenses -- 3
Operating income (loss) (166) 174
Other income (expense):
Interest expense (627) (961)
Other, net 26 41
Loss before income taxes (767) (746)
Income tax benefit -- (284)
Net loss (767) (462)
Basic loss per share (0.07) (0.04)
Diluted loss per share (0.07) (0.04)
Weighted-average common shares
outstanding - basic and dilutive 11,754 11,629
Other Information (1)
(Dollars in thousands, except per share amounts) (Unaudited)
April 30, 2001 April 30, 2000
Merchandise inventories, net 127,331 132,777
Long-term debt 35,309 42,974
Long-term debt to total capitalization (2) 32.0% 32.4%
EBITDA (3) 8,750 8,407
EBITDA per share 0.74 0.72
Free cash flow (4) 2,921 2,586
Book value (5) 75,110 89,638
Book value per share 6.39 7.71
Comparable store total revenues (6) 0.3% 1.6%
Comparable store merchandise revenues (6) (0.7%) 0.9%
Comparable store rental video revenues (6) 4.2% 4.2%
(1) Calculations may differ in the method employed from similarly titled
measures used by other companies.
(2) Defined as long-term debt divided by long-term debt plus total
shareholders' equity (book value)
(3) Defined as net loss before tax plus interest, depreciation and
amortization expenses.
(4) Defined as net loss plus depreciation and amortization expenses less
capital expenditures for rental video assets.
(5) Defined as total shareholders' equity.
(6) This represents the increase (decrease) over the prior comparable
period.
Store Data
Quarter Ending
April 30, 2001 April 30, 2000
Superstores:
Beginning number of stores 142 147
Openings - - --
Closings - (5)
Ending number of stores 142 142
Fiscal Year 2001 Guidance
Comparable store revenue increase 4.0%
Gross margin percentage 31.2%
Operating income percentage 1.4%
Earnings per share $ 0.40
Weighted average shares outstanding 11,800,000
New stores Seven
Safe Harbor Statement
This document contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 that involve a
number of risks and uncertainties. A number of factors could cause actual
results, performance, achievements of the Company, or industry results to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. These factors
include, but are not limited to, the competitive environment in the retail
industries within which the Company operates in general and in the Company's
specific market area; inflation; economic conditions in general and in the
Company's specific market areas; the number of store openings and closings;
the profitability of certain product lines, capital expenditures and future
liquidity; liability and other claims asserted against the Company.
In
addition, such forward-looking statements are necessarily dependent upon
assumptions, estimates and dates that may be incorrect or imprecise and
involve known and unknown risks, uncertainties and other factors. Accordingly,
any forward-looking statements included herein do not purport to be
predictions of future events or circumstances and may not be realized. Given
these uncertainties, shareholders and prospective investors are cautioned not
to place undue reliance on such forward-looking statements. The Company
disclaims any obligations to update any such factors or to publicly announce
the results of any revisions to any of the forward-looking statements
contained herein to reflect future events or developments.
and 
