Home | Business News | Browse by Publication | P | PR Newswire

Hastings Entertainment, Inc. Reports Results for the Second Quarter of Fiscal 2009.

Article Excerpt
AMARILLO, Texas, Aug. 17 /PRNewswire-FirstCall/ -- Hastings Entertainment, Inc. , a leading multimedia entertainment retailer, today reported results for the three and six months ended July 31, 2009. Net loss was approximately $0.4 million, or $0.04 per diluted share, for the second quarter of fiscal 2009 compared to net income of approximately $0.7 million, or $0.06 per diluted share, for the second quarter of fiscal 2008. Net income was $1.3 million, or $0.13 per diluted share, for the six months ended July 31, 2009 compared to net income of $3.6 million, or $0.34 per diluted share, for the same period in the prior year.

"The recession continued to negatively impact consumer spending through the second quarter," said John Marmaduke, Chief Executive Officer and Chairman. "Our core customer base remains stable; however, customer purchase behavior has shifted toward value priced merchandise. We have been very active in partnering with our key vendors to bring exceptional values while maintaining or improving our merchandise margin rates. Our movie rental business was negatively impacted by fewer releases compared to the prior year and the de-valuing of the price of a rental movie primarily as a result of the growth of rental kiosks renting movies for a dollar per day. In response we have implemented a promotion where thousands of movie titles in our stores now rent for $0.99 per week. This has lowered our rental revenue in the short-term; however, we are seeing a significant increase in units rented along with growth in new customer membership sign-ups. We continue to focus on our balance sheet and reducing costs. Our inventory was approximately $13.5 million less than a year ago and long-term debt was approximately $5.4 million less than a year ago. Additionally, cash flows from operations increased approximately $2.2 million over the comparable period last year and capital expenditures were $4.7 million less than the comparable period last year."

Financial Results for the Second Quarter of Fiscal Year 2009

Revenues. Total revenues for the second quarter decreased approximately $8.5 million, or 6.7%, to $117.2 million compared to $125.7 million for the second quarter of fiscal 2008. The following is a summary of our revenues results (dollars in thousands):

Three Months Ended July 31, 2009 2008 (Decrease) ------------------ ------------------ ---------------- Percent Percent Revenues of Total Revenues of Total Dollar Percent -------- -------- -------- -------- ------ ------- Merchandise revenue $97,366 83.1% $103,860 82.6% $(6,494) -6.3% Rental revenue 19,826 16.9% 21,806 17.4% (1,980) -9.1% ------ ----- ------ ----- ------ ----- Total revenues $117,192 100.0% $125,666 100.0% $(8,474) -6.7% ======== ====== ======== ====== ======= ===== Comparable-store revenues ("Comp"): Total -8.1% Merchandise -7.7% Rental -10.1%

Below is a summary of the Comp results for our major merchandise categories:

Three Months Ended July 31, 2009 2008 ---- ---- Hardback Cafe 17.2% 6.5% Electronics 3.3% 25.7% Consumables 3.0% 10.4% Trends 0.8% 13.6% Books -1.7% -1.1% Movies -8.1% 2.6% Music -15.6% -11.7% Video Games -20.9% 4.6%

Hardback Cafe Comps increased 17.2% for the quarter, compared to the second quarter in the prior year, primarily as a result of the opening of an additional five cafes in existing stores during the quarter and increased sales of specialty cafe drinks, mugs, and baked goods. Electronics department Comps increased 3.3% for the quarter, primarily due to strong sales of third party gift cards, hardware including digital converter boxes and Blu-ray DVD players, and accessories for iPods and MP3 players, partially offset by lower sales of refurbished iPods during the quarter. Consumable Comps increased 3.0% for the quarter, primarily resulting from...