Gross Margin Improves Substantially; Loss Narrows
SAN FRANCISCO, July 25 /PRNewswire/ -- Good Guys (Nasdaq: GGUY), the
nation's second-largest specialty retailer of consumer entertainment
electronics, today announced financial results for the third quarter and first
nine months of fiscal 2000.
For the third quarter ended June 30, Good Guys reported a net loss of
$2.97 million, or $.14 per share, compared to a net loss of $8.13 million, or
$.54 per share, for the third quarter of 1999. The company attributed the
majority of the loss to the disruption caused by the reorganization of the
company's in-store staffing and merchandising structure in April. Both
earnings and sales for continuing categories increased month-over-month during
the quarter and culminated in the best June financial performance in four
years.
For the first nine months of fiscal 2000, the net loss was $7.6 million,
or $.38 per share, compared to a net loss of $13.7 million, or $.94 per share,
for the same period last year. Earnings before interest, taxes, depreciation
and amortization (EBITDA) increased to $7.7 million from a loss of
$1.5 million in the first nine months of fiscal 1999.
Gross profit margin for the quarter improved to 29.2 percent from
26.0 percent the year before, reflecting the company's emphasis on
higher-margin digital and high-tech consumer entertainment electronics and the
elimination of computers and home office products. For the nine months, the
gross profit margin rose to 29.2 percent from 24.6 percent in fiscal 1999.
"We are pleased with the dramatic progress we made during the third
quarter and are more convinced than ever that the recent reorganization and
revised advertising program will deliver the sales volume and overall customer
experience necessary to maintain and expand our position as the West Coast's
premier specialty retailer of consumer entertainment electronics," said Ronald
A. Unkefer, chairman and CEO, Good Guys. "Coupled with our ongoing efforts to
reduce costs and maximize the value of our real estate holdings, the recent
improvements will enable Good Guys to enter fiscal 2001 stronger and healthier
than we have been in years and will firmly position the company to capitalize
on the exploding demand for digital and high-tech products."
As previously reported, third-quarter sales for continuing categories
increased 4 percent and comparable store sales for continuing categories
increased 3 percent, the first notable sales increases in over a year. Due to
the elimination of low-margin computers and home office products and the
de-emphasis of entry-level offerings, total sales for the third quarter were
$195.9 million compared to $210.5 million in the third quarter of fiscal year
1999. For the first nine months of fiscal 2000, sales were $648.5 million
compared to $723.7 million for the year-ago period, with comparable store
sales for continuing categories remaining the same and sales for continuing
categories increasing 1 percent.
"We expect the momentum from three consecutive months of sales increases
and three consecutive quarters of strong gross profit margins to continue,"
said Unkefer. "I am optimistic that we will report even stronger same store
sales increases in the fourth quarter and that we will begin fiscal 2001 with
a profitable holiday shopping season that surpasses last year's holiday
performance."
Maximizing Real Estate Value
Earlier this month Good Guys announced that Tower Records has licensed
6,000 square feet from the company to open "Tower 2" concept stores in two
Good Guys stores in Las Vegas. The stores will serve as a pilot for a more
expansive program that could involve the licensing of up to 200,000 square
feet of space within Good Guys' locations in California, Nevada, Washington
and Oregon by Tower or a combination of complementary retailers. The rollout
could be completed as early as Fall 2001 and would provide Good Guys with a
meaningful source of income and substantial in-store traffic.
Good Guys also plans to finish consolidating its five-floor corporate
headquarters into two floors by October and sub-lease the remaining three
floors. The profit from the leasing arrangement is expected to substantially
offset remaining corporate real estate costs for the balance of the lease.
Financial Outlook
Based on the continuation of recent sales trends, the company expects
continued improvement towards profitability in the fourth quarter and to
report positive EBITDA for the fiscal year ending September 30.
"Our sales and financial results for the fourth quarter and fiscal year
will be a vivid contrast to last year's dismal performance, but clearly will
not fully reflect the long-term impact we expect from the aggressive,
company-wide changes Good Guys has implemented over the past 12 months," said
Unkefer. "Based on current run rates of costs, margins and sales, I firmly
believe that Good Guys is on track to attain a healthy level of profitability
in fiscal 2001 and will be well positioned to achieve industry-leading
profitability in the years that follow."
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. For more information, visit
http://www.goodguys.com.
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 June 30: 2000 1999
Sales $ 195,936,000 $ 210,451,000
Net Loss $ (2,972,000) $(8,131,000)
Net Loss Per Share
Basic $ (0.14) $ (0.54)
Diluted $ (0.14) $ (0.54)
Average Shares
Basic 20,557,000 15,103,000
Diluted 20,557,000 15,103,000
Nine Months Ended June 30: 2000 1999
Sales $ 648,508,000 $ 723,649,000
Net Loss $(7,595,000) $(13,726,000)
Net Loss Per Share
Basic $(0.38) $(0.94)
Diluted $(0.38) $(0.94)
Average Shares
Basic 20,184,000 14,620,000
Diluted 20,184,000 14,620,000
Good Guys, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Amounts in thousands
except per share data)
Three Months Ended Nine Months Ended
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
% of % of % of % of
Amount Sales Amount Sales Amount Sales Amount Sales
Net sales 195,936 100.0 210,451 100.0 $648,508 100.0 $723,649 100.0
Cost of
sales 138,820 70.8 155,811 74.0 458,918 70.8 545,617 75.4
Gross
profit 57,116 29.2 54,640 26.0 189,590 29.2 178,032 24.6
Selling,
general
and
adminis-
trative
expenses 58,636 29.9 61,566 29.3 192,955 29.8 189,299 26.2
Income
(loss)
from
opera-
tions (1,520) (0.8) (6,926) (3.3) (3,365) (0.5) (11,267) (1.6)
Interest
expense,
net 1,452 0.7 1,205 0.6 4,230 0.7 2,459 0.3
Income
(loss)
before
income
taxes (2,972) (1.5) (8,131) (3.9) (7,595) (1.2) (13,726) (1.9)
Income
tax
expense
(benefit) 0 0.0 0 0.0 0 0.0 0 0.0
Net income
(loss) $(2,972) (1.5) $(8,131) (3.9) $(7,595) (1.2) $(13,726) (1.9)
Net income
(loss) per
common
share
Basic and
Diluted: $(0.14) $(0.54) $(0.38) $(0.94)
Weighted
average
shares
Basic and
Diluted: 20,557 15,103 20,184 14,620
Good Guys, Inc.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30,
(Amounts in thousands) 2000 1999
ASSETS
Current Assets:
Cash $2,718 $10,176
Receivables 18,396 23,560
Inventories 134,454 135,697
Prepaid Assets 13,675 7,138
Total Current Assets 169,243 176,571
Property and equipment, net 67,733 80,651
Other assets 7,788 7,162
Total Assets $244,764 $264,384
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $66,156 $68,486
Accrued expenses 32,069 35,777
Total Current Liabilities 98,225 104,263
Revolving Credit Debt 53,674 55,708
Shareholders' equity 92,865 104,413
Total Liabilities and Shareholders' Equity $244,764 $ 264,384
CONTACT: Kristen Lark of Good Guys, 214-220-2484, or klark@goodguys.com.
SOURCE Good Guys
 back to top
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
|
