Compared to restated net income of $862,000 or $0.07 per share in the second quarter of fiscal 1999, the company reported a net loss for the current quarter of $2,289,000 or $0.18 per share. The second quarter fiscal 2000 results included pre-tax non-recurring charges of $2,700,000 for accounting, financial and legal expenses and fees relating to accounting adjustments for 1999 and prior years.

“Revenue growth for the second quarter was essentially in line with management expectations, since we are comparing against a strong quarter last year,” said John H. Marmaduke, chairman and chief executive officer. The net loss primarily resulted from significant charges related to the restatement of operating results, along with our initiative to reduce and balance our inventories. Inventories decreased by over $14 million, which caused higher-than-normal merchandise returns expense. Margins were also impacted by our accelerated sell-off of excess merchandise. “Hastings completed the first half of the year in a strong financial position, with positive cash flow from operations of $22 million, $52 million in working capital and book value of $7.51 per share,” said Marmaduke.

Hastings also announced the execution of a new three year $70 million secured revolving credit facility headed by Fleet Retail Finance in syndication with The CIT Group/Business Credit, Inc. Dan Crow, Vice President - Finance commented, “The new facility, put together in just over 40 days, significantly enhances the Company’s financial liquidity and operating flexibility. Hastings has increased its borrowing capacity by close to $20 million over our past credit facilities, and in addition, the new arrangement expands to $80 million during the fourth quarter to provide for higher seasonal needs. The new interest rate is at the prime rate or 2.0% over the LIBOR rate at Hastings’ option and other than the requirement to maintain $10 million of borrowing availability, has no financial covenants.” “We are pleased to provide Hastings with this new credit facility,” said Ed Siskin, Chief Operating Officer with Fleet Retail Finance, Inc. “We look forward to working with the Company to achieve its strategic objectives and goals.” Crow stated, “A credit facility is more than pricing. Your banker must understand your business and be a partner, not just a lender, who can appreciate and respond to a company’s needs. In my experience, no one does it better than Fleet, one of the premier commercial lenders in the country.”

Founded in 1968, Hastings Entertainment, Inc. is a leading multimedia entertainment retailer that combines the sale of books, music, software, periodicals, DVDs, videos and video games with the rental of videos, DVDs and video games in a superstore format. The Company currently operates 143 superstores, averaging 21,500 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 its customers new and used entertainment products and unique, contemporary gifts and toys. The site features exceptional product and pricing offers, including best-selling books at up to 50% off list price.