- Earnings Per Share Increases 27%
- Operating Income Increases 40%
- Gross Margin On Sales Improves 0.8%
WEST CHESTER, Pa., May 20 /PRNewswire/ -- Electronics Boutique Holdings
Corp. (Nasdaq: ELBO), the world's largest specialty retailer of electronic
games, today reported a 60% increase in net income to $2.9 million, or $0.14
per share fully diluted, for the first quarter of its fiscal 2000 year, which
ended May 1, 1999.
This compares with pro forma net income of $1.8 million, or $0.11 per
share fully diluted, for the first quarter of fiscal 1999. The pro forma
results assume that Electronics Boutique was a C corporation in the first
quarter of fiscal 1999. The company converted from S corporation to C
corporation status in July, 1998 in connection with its initial public
offering. Shares outstanding totaled 20.3 million in the first quarter of
fiscal 2000, compared with pro forma shares of 15.8 million a year earlier.
Total revenues increased 15% to $123.6 million in the first quarter of
fiscal 2000, compared with $107.3 million in the prior-year period. The
growth in revenues was largely attributable to an increase in Electronics
Boutique's store base. The Company had 550 stores in operation as of May 1,
1999, an increase from 465 stores a year earlier. Comparable store sales
increased by 2%, compared with the year-ago quarter.
Joseph J. Firestone, President and Chief Executive Officer, commented,
"Comparable store sales were positively impacted in the first quarter by
strong demand in Nintendo Gameboy software and hardware, PC entertainment
software, and toy categories, which offset a relatively weak selection of new
release titles for Sony Playstation and Nintendo64."
The gross margin on sales increased 80 basis points to 26.3% for the first
quarter of fiscal 2000, compared to 25.5% for the first quarter of fiscal
1999. The Company attributes this improvement in part to the increases in
sales of Gameboy software and hardware, toys and software-related action
figures that carry higher overall margins than the console video game
category.
Operating income increased by 40% to $4.4 million in the first quarter of
fiscal 2000, compared to pro forma operating income of $3.2 million in the
first quarter of fiscal 1999. As a percent of total revenues, operating
margin was 3.6% in this year's first quarter compared to 2.9% in the prior
year's quarter.
Mr. Firestone said that net sales via the Company's website continue to
grow rapidly. During the first quarter, Electronics Boutique established
EBWorld.com, Inc., as a separate e-commerce division. Net sales generated
from its http://www.ebworld.com website more than quadrupled to $1.5 million for the
first quarter of fiscal 2000, compared with the year-ago period.
Electronics Boutique is the leading specialty retailer of video and
computer games and also sells video game hardware, PC productivity software
and accessories. The company currently operates 550 stores in 45 states,
Puerto Rico, Canada, Australia and South Korea, primarily under the names
Electronics Boutique and Stop 'N Save Software. The company has also
established a separate e-commerce division, EBWorld.com, Inc., to accelerate
the growth of its Internet business. During fiscal 1999, there were more than
10 million visits to the company's website at http://www.ebworld.com.
This press release contains "forward-looking statements." Electronics
Boutique ("EB") is including this statement for the express purpose of
availing itself of the protections of the safe harbor provided by the Private
Securities Litigation Reform Act of 1995 with respect to all such
forward-looking statements. These forward-looking statements are subject to
risks and uncertainties that could cause actual results to differ materially.
These risks include, but are not limited to, EB's dependence on the continued
introduction of new and enhanced video games and PC hardware and software;
the cyclical nature of the video game market; the rapid technological changes
which occur in the video game and PC industry; EB's ability to open and
operate new stores on a profitable basis; the intensely competitive nature of
the electronic game industry and its rapid changes in consumer preferences and
frequent new product introductions; the seasonal nature of the retail
industry; EB's dependence on its suppliers for products; risks inherent to
conducting international operations; and consumer spending patterns and
prevailing economic conditions. Please refer to Electronics Boutique's Annual
Report on Form 10-K on file with the SEC for a more detailed discussion of
these and other risks that could cause results to differ materially.
Electronics Boutique Holdings Corp.
Consolidated Statements of Income
(Unaudited; Amounts in thousands, except share and per-share amounts)
Thirteen Weeks Ended
May 1, May 2,
1999 1998
Net Sales $122,744 $106,730
Management fees 861 571
Total Revenues 123,605 107,301
Costs and Expenses:
Cost of merchandise sold, including freight 90,438 79,520
Selling, general and administrative 26,025 22,270
Depreciation and amortization 2,707 2,254
Operating Income 4,435 3,257
Equity in gain/(loss) of affiliates -- (80)
Interest expense, net (290) 214
Income before income tax expense 4,725 2,963
Income tax expense 1,852 113
Net income $2,873 $2,850
Net income per share -- basic $0.14
Weighted average shares outstanding
-- basic 20,169,200
Net income per share -- diluted $0.14
Weighted average shares outstanding
-- diluted 20,312,657
Pro Forma Data (see note):
Pro forma operating income 3,159
Pro forma income before income tax expense 2,946
Pro forma income tax expense 1,155
Pro forma net income $1,791
Pro forma net income per share
-- basic and diluted $0.11
Pro forma weighted average shares outstanding
-- basic and diluted 15,794,200
Electronics Boutique Holdings Corp. (the "Company") completed its initial
public offering on July 29, 1998. Historical statements of income prior to
that date include the results of operations of the Company's predecessors.
Immediately prior to the public offering a series of reorganization
transactions occurred in which the Company acquired substantially all of the
assets and liabilities of its predecessors and The Electronics Boutique, Inc.,
a predecessor to the Company, retained certain assets, including the West
Chester distribution center and headquarters and the shares of Electronics
Boutique plc. The pro forma data is presented in order to illustrate the
effect on the consolidated statements of income as if these assets were
retained as of the beginning of the fiscal year. Additionally, prior to the
offering, The Electronics Boutique, Inc. was taxed as an S Corporation for
federal and certain state income tax purposes. The pro forma data also
reflects the adjustment to record income taxes as if the company had been a C
Corporation for federal and state income tax purposes.
A more detailed explanation of the above pro forma adjustments can be
found in the company's registration statement relating to its initial public
offering filed with the Securities and Exchange Commission.
Electronics Boutique Holdings Corp.
Selected Consolidated Balance Sheet Data
(Unaudited; Amounts in thousands)
May 1, January 30,
1999 1999
Cash and cash equivalents $16,544 $42,006
Merchandise inventories 78,473 65,433
Total current assets 109,753 117,614
Total assets 166,585 172,047
Current liabilities 112,028 120,705
Total liabilities 114,509 123,205
Stockholders' equity 52,076 48,842
SOURCE Electronics Boutique Holdings Corp.
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Related links:
http://www.ebworld.com
CONTACT:
John R. Panichello, Chief Financial Officer
of Electronics Boutique Holdings, 610-430-8100; or General Info,
Kelly Lofts, Analyst Info, Lynn Sawyer-Landau, or Media Info,
Martin Gitlin, all of The Financial Relations Board, 212-661-8030
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