SAN FRANCISCO, April 25 /PRNewswire/ -- Good Guys (Nasdaq: GGUY), a
leading specialty retailer of consumer entertainment electronics, today
announced financial results for the second quarter and first half of fiscal
2000.
For the second quarter ended March 31, Good Guys reported a net loss of
$10.2 million, or $.50 per share, which includes a one-time charge of
$475,000, compared to a net loss of $7.2 million, or $.50 per share, for the
second quarter of 1999. During the second quarter of fiscal 2000 there were
20.3 million weighted average shares outstanding compared to 14.5 million
weighted average shares outstanding in the year-prior period. Earlier this
month, Good Guys announced that it expected a pre-tax loss of approximately
$10 million compared to a pre-tax loss of $8.2 million in the second quarter
of fiscal 1999.
For the first six months of fiscal 2000, the net loss was $4.6 million
compared to a net loss of $5.6 million for the same period last year. The
loss per share was $.23 on 20.0 million weighted average shares compared to a
loss per share of $.39 on 14.4 million weighted average shares. Earnings
before interest, taxes, depreciation and amortization (EBITDA) increased to
$5.5 million from $3.0 million in the first six months of fiscal 1999.
Earnings for the quarter were impacted by the reorganization of the
company's in-store operations and merchandise categories, which eliminated the
stand-alone personal electronics department and its entry-level staff by
redistributing most of the products into the audio, video and mobile
electronics departments. Good Guys also eliminated its internal advertising
production department to leverage external expertise and resources to
strengthen its advertising and marketing efforts. The restructuring, which
will reduce costs by approximately $9 million annually and improve the level
of service at the company's 79 stores, eliminated approximately 315 positions
and resulted in a one-time charge for severance packages.
"The second quarter marked an important, strategic shift in the way we
staff and merchandise our store floors and promote the company. We fully
expect these changes to transform us into a more customer-focused sales
organization with a more powerful advertising presence," said Ronald A.
Unkefer, founder, chairman and CEO, Good Guys. "We now have the mechanisms in
place to more effectively manage our operating costs and to maximize sales
opportunities in our stores that will significantly enhance the total shopping
experience and position us to increase our market share and achieve sales
growth consistent with the current and expected explosion in the consumer
electronics industry."
Gross profit margin for the quarter improved to 28.2 percent from
23.7 percent the year before, reflecting the company's emphasis on
higher-margin digital and high-tech consumer entertainment electronics. In
addition, extended service contract sales and inventory turns on continuing
categories increased from year-ago figures.
"Our efforts over the past three quarters to reduce operating costs by
more than $24 million annually, eliminate unprofitable lines of business and
emphasize more fully featured and higher-end brands and models are already
delivering the gross profit margin and competitive differentiation we have
been striving toward," said Unkefer. "We expect to make significant progress
towards our longer-term goal of sustainable increases in sales and earnings by
the fourth quarter and return to profitability in the current fiscal year."
As previously reported, second quarter sales were $190.4 million compared
to $219.1 million in the second quarter of fiscal 1999. The decline in
overall sales was due primarily to the discontinuation of computers and home
office products. Sales for continuing categories decreased approximately
1 percent from the same period last year. For the first six months of fiscal
2000, sales were $452.6 million compared to $513.2 million for the year-ago
period with sales for continuing categories remaining the same.
In addition to the in-store reorganization and other cost reductions, Good
Guys expects to improve its financial performance by more effectively
communicating and demonstrating its differentiation in product selection,
price and overall customer service through more targeted and aggressive
advertising and promotions and an increased emphasis on employee training.
The company will also continue expanding its selection of exclusive,
limited-distribution brands and models.
"By increasing the gap between Good Guys and our largest competitors in
customer service, product knowledge and product selection, we will continue to
position Good Guys as the premier provider of digital and high-tech
entertainment electronics and reestablish ourselves as a market-leader and
trend-setter in our industry," said Unkefer.
Good Guys is a leading specialty retailer of consumer entertainment
electronics, offering a distinctive selection of fully featured digital and
high-tech products from more than 100 of the world's most respected
manufacturers. Founded in 1973, Good Guys currently operates 79 stores in
California, Nevada, Oregon and Washington.
To the extent this news release contains forward-looking statements, such
statements are subject to risks and uncertainties, including, but not limited
to the successful implementation of the Company's current restructuring
program, increases in promotional activities of competitors, changes in
consumer buying attitudes, the presence or absence of new products or product
features in the Company's merchandise categories, changes in vendor support
for advertising and promotional programs, changes in the Company's merchandise
sales mix, and economic conditions.
Good Guys, Inc.
SELECTED FINANCIAL DATA
(Unaudited)
Quarter Ended March 31: 2000 1999
Sales $ 190,364,000 $ 219,099,000
Net Loss $ (10,231,000) $(7,246,000)
Net Loss Per Share
Basic $ (0.50) $ (0.50)
Diluted $ (0.50) $ (0.50)
Average Shares
Basic 20,300,000 14,508,000
Diluted 20,300,000 14,508,000
Six Months Ended March 31: 2000 1999
Sales $ 452,575,000 $ 513,199,000
Net Loss $(4,612,000) $(5,594,000)
Net Loss Per Share
Basic $(0.23) $(0.39)
Diluted $(0.23) $(0.39)
Average Shares
Basic 19,998,000 14,378,000
Diluted 19,998,000 14,378,000
Good Guys, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Amounts in thousands
except per share data) Three Months Ended
March 31, 2000 March 31, 1999
% of % of
Amount Sales Amount Sales
Net sales $190,364 100.0 $219,099 100.0
Cost of sales 136,662 71.8 167,156 76.3
Gross profit 53,702 28.2 51,943 23.7
Selling, general and
administrative expenses 62,884 33.0 59,475 27.1
Income (loss)
from operations (9,182) (4.8) (7,532) (3.4)
Interest expense, net 1,049 (0.6) 666 (0.3)
Income (loss) before
income taxes (10,231) (5.4) (8,198) (3.7)
Income tax expense
(benefit) 0 0.0 (952) 0.3
Net income (loss) $(10,231) (5.4) $(7,246) (3.3)
Net income (loss) per
common share
Basic and Diluted: $(0.50) $(0.50)
Weighted average shares
Basic and Diluted: 20,300 14,508
Good Guys, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Amounts in thousands
except per share data) Six Months Ended
March 31, 2000 March 31, 1999
% of % of
Amount Sales Amount Sales
Net sales $452,575 100.0 $513,199 100.0
Cost of sales 320,096 70.7 389,806 75.2
Gross profit 132,479 29.3 123,393 24.8
Selling, general and
administrative expenses 134,313 28.1 127,733 24.9
Income (loss)
from operations (1,834) (3.8) (4,340) (0.8)
Interest expense, net 2,778 (0.5) 1,254 (0.2)
Income (loss) before
income taxes (4,612) (4.3) (5,594) (1.1)
Income tax expense
(benefit) 0 0.0 0 0.0
Net income (loss) $(4,612) (4.3) $(5,594) (1.1)
Net income (loss) per
common share
Basic and Diluted: $(0.23) $(0.39)
Weighted average shares
Basic and Diluted: 19,998 14,378
Good Guys, Inc.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31,
(Amounts in thousands) 2000 1999
ASSETS
Current Assets:
Cash $1,885 $3,124
Receivables 18,319 26,184
Inventories 120,609 147,596
Prepaid Assets 13,312 6,530
Total Current Assets 154,125 183,434
Property and equipment, net 70,895 76,452
Other assets 7,644 7,283
Total Assets $232,664 $267,169
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $58,545 $92,205
Accrued expenses 32,192 37,922
Total Current Liabilities 90,737 130,127
Revolving Credit Debt 46,784 29,305
Shareholders' equity 95,143 107,737
Total Liabilities and
Shareholders' Equity $232,664 $267,169
SOURCE Good Guys
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Related links:
http://www.thegoodguys.com
Company News On-Call:
http://www.prnewswire.com/comp/108403.html or fax,
800-758-5804, ext. 108403
CONTACT:
Kristen Lark of Good Guys, 214-220-2484, or
klark@goodguys.com
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