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| Hastings Entertainment
Reports $9.9 Million Increase in Revenues for the First Quarter 2000 Results |
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AMARILLO, Texas, June 20, 2000--Hastings Entertainment,
Inc. (NASDAQ: HASTE), a leading multimedia entertainment superstore retailer, today
announceds that revenues for the fiscal 2000 first quarter ended April 30, 2000, revenues
rose 9.9% to $110,495,000 from $100,579,000 for the first quarter of fiscal 1999, with
comparable-store revenue increases of 1.6% from the same period a year ago. The net loss
for the current quarter was $462,000 or $0.04 per share compared to net income of
$2,698,000 or $0.23 per share forin the same comparable quarter of last year. Results for the first quarter of fiscal 2000, were
adversely impacted by an increase in rental video revenue sharing costspayments and video
depreciation which lowered the overall rental video gross margin, increased professional
fees due to the previously announced restatements of financial results, increased Internet
costs, and higher merchandise returns expense as the Company achieves its plan due to the
Company's efforts to lower inventory investment.
"Our first quarter results only partially show the progress
made since year-end," said John H. Marmaduke, chairman and chief executive officer.
" The 13.2% increase in rental video revenue in the current quarter over last year's
first quarter confirms that rental video has responded positively to management's
initiatives. Also during the quarter, the Ccompany has strengthened its balance sheet by
reducing inventory, current liabilities and long-termn debt as planned in fiscal
2000."
"With the restatements behind us, we are devoting our full
energies toon improvinging all aspects of our superstores to enhanceimproving our
customers' shopping experience and increaseenhance shareholder value," added
Marmaduke.
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 Ccompany 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.
In addition, investors and customers can review general and
financial information about the Company at this site.
Certain statements set forth above are forward-looking statements
within the meaning of the Securities Exchange Act of 1934. Such statements are based upon
Hastings Entertainment management’s current estimates, assumptions and expectations
and are subject to a number of factors and uncertainties, any of which could cause actual
results to differ materially from those described herein. The forward-looking statements
set forth above are also subject to the factors and uncertainties set forth under the
heading "Risk Factors" in the Ccompany’s Form 10-K for the fiscal year
ended January 31, 2000. |
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-tables follow-
Hastings Entertainment, Inc.
Consolidated Balance Sheets
(Amounts in thousands, except earnings
per share data) |
|
 |
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April 30,
2000 |
|
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January
31, 2000 |
|
|
Assets |
|
(Unaudited) |
|
|
|
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Current assets: |
|
|
|
|
|
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Cash |
$ |
4,951 |
|
$ |
7,026 |
|
Merchandise inventories, net |
|
132,777 |
|
|
152,065 |
|
Income taxes receivable |
|
7,062 |
|
|
6,272 |
|
Deferred income taxes |
|
— |
|
|
656 |
|
Other current assets |
|
4,519 |
|
|
4,968 |
|
Total current assets |
|
149,309 |
|
|
170,987 |
|
Property and equipment, net of
accumulated depreciation |
|
|
|
|
|
|
of $111,572 and $112,730
respectively |
|
70,309 |
|
|
73,242 |
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Deferred income taxes |
|
3,905 |
|
|
3,026 |
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Other assets |
|
585 |
|
|
678 |
|
|
$ |
224,108 |
|
$ |
247,933 |
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Liabilities
and Shareholders’ Equity |
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Current liabilities: |
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Current maturities on long-term
debt |
$ |
5,372 |
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$ |
5,372 |
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Trade accounts payable |
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57,526 |
|
|
66,568 |
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Accrued expenses and other
current liabilities |
|
28,139 |
|
|
31,752 |
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Deferred income taxes |
|
787 |
|
|
— |
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Total current liabilities |
|
91,824 |
|
|
103,692 |
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Long term debt, excluding current
maturities |
|
37,602 |
|
|
48,888 |
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Other liabilities |
|
5,044 |
|
|
5,262 |
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|
|
|
|
|
|
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Shareholders' equity: |
|
89,638 |
|
|
90,091 |
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Commitments and contingencies |
|
— |
|
|
— |
|
|
$ |
224,108 |
|
$ |
247,933 |
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Hastings Entertainment, Inc.
Consolidated Statement of Operations (Unaudited)
(amountsAmounts in thousands, except
per share data) |
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First Quarter Ended April 30, |
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2000 |
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|
1999 |
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Merchandise revenue |
$ |
88,132 |
|
$ |
80,819 |
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|
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Rental video revenue |
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22,363 |
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|
19,760 |
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Total revenues |
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110,495 |
|
|
100,579 |
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Merchandise cost of revenue |
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61,812 |
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55,783 |
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Rental video cost of revenue |
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8,270 |
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|
5,417 |
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Total cost of revenues |
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70,082 |
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61,200 |
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Gross profit |
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40,413 |
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39,379 |
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Selling, general and
administrative expenses |
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40,236 |
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34,131 |
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Pre-opening expenses |
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3 |
|
|
179 |
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|
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|
|
|
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Operating income |
|
174 |
|
|
5,069 |
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|
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|
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|
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Other income (expense): Interest expense
Other, net |
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(961)
41 |
|
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(822)
36 |
|
|
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|
|
|
|
|
|
|
|
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Income (loss) before income taxes |
|
(746) |
|
|
4,283 |
|
|
|
|
|
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|
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|
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Income tax expense (benefit) |
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(284) |
|
|
1,585 |
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Net income (loss) |
$ |
(462) |
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$ |
2,698 |
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Basic income (loss) per share |
$ |
(0.04) |
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$ |
0.23 |
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Diluted income (loss) per share |
$ |
(0.04) |
|
$ |
0.23 |
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Weighted-average common shares
outstanding—basic |
|
11,629 |
|
|
11,599 |
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|
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Dilutive effect of stock options |
|
— |
|
|
148 |
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Weighted-average common shares
outstanding—diluted |
|
11,629 |
|
|
11,747 |
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and 
