SAN FRANCISCO, Jan. 21 /PRNewswire/ -- THE GOOD GUYS! (Nasdaq: GGUY) today
announced net earnings for its first fiscal quarter ended December 31, 1997
rose 20% to $2.4 million from last year's $2.0 million.  Earnings per share
was $.18 on 13.7 million weighted average shares outstanding, versus $.15 on
13.5 million weighted average shares outstanding during the first quarter of
fiscal 1997.
    As reported earlier, sales for the first quarter of fiscal 1998 were
$290.3 million, up 1% from $286.6 million in the first quarter of fiscal 1997.
Comparable store sales increased 1% from 1997 levels.
    Commenting on the Company's performance, Robert A. Gunst, President and
Chief Executive Officer, said, "Our 1% increase in same store sales in the
first quarter reversed an eight quarter downward trend for THE GOOD GUYS!.
This reflects relatively strong performance of our core Audio and Video
categories, despite the generally soft retail sales environment that continued
to prevail in our industry.  The promotional climate was also more intense
during the quarter -- especially in personal computers -- which contributed to
a .3% decline in our gross profit margin.  This was more than offset, however,
by the impact of our same store growth, coupled with rigorous cost control and
improved efficiencies realized during the quarter.  As a result, we achieved
an improved operating margin and a 20% increase in earnings.
    "We continue to be very pleased with the consumer reception and
performance of our Audio/Video Exposition stores," Gunst added. "During the
first quarter, we re-opened our Hayward store as our first Audio/Video
Exposition in Northern California.  Initial sales growth at the Hayward store
has even surpassed the earlier strong opening performances of our two Southern
California Audio/Video Exposition stores, which we opened last fiscal year.
    "Based on the success of the concept, we will open three additional new
Audio/Video Exposition stores in calendar 1998.  Two of these will be our
first Audio/Video Exposition-enhanced WOW! Multimedia Superstores, which we
will operate jointly with Tower Records.  Over the calendar year, we also plan
to remodel or relocate between four to seven existing THE GOOD GUYS! locations
into this exciting Audio/Video Exposition format."
    THE GOOD GUYS! is a leading specialty retailer of consumer electronics,
operating a total of 76 stores, 58 in California, nine in Washington, five in
Oregon and four in Nevada, and marketing a broad range of high quality, name
brand products. For more information on the Company, including news releases,
employment opportunities, product information and store locations, visit THE
GOOD GUYS! Internet home page at http://www.thegoodguys.com.  THE GOOD GUYS!
press releases are also available by fax through Company News-On-Call at
800-758-5804, extension 108403.
    This news release contains forward-looking statements, which are subject
to risks and uncertainties, including, but not limited to, 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.
                                THE GOOD GUYS!
                           SELECTED FINANCIAL DATA
                                 (Unaudited)

    Quarter Ended December 31:      1997                  1996

    Sales                    $290,303,000            $286,565,000
    Net Income                 $2,403,000              $1,966,000
    Average Shares             13,719,000              13,464,000
    Earnings Per Share               $.18                    $.15

                             THE GOOD GUYS, INC.
                      Consolidated Statements of Income
                                 (Unaudited)
                 (Amounts in thousands except per share data)

                                               Three Months Ended
                                     December 31, 1997  December 31, 1996
                                                 % of                 % of
                                      Amount    Sales     Amount      Sales

    Net Sales                        $290,303   100.0    $286,565   100.0
    Cost of sales                     218,682    75.3     214,870    75.0
    Gross profit                       71,621    24.7      71,695    25.0
    Selling, general and
     administrative expenses           67,567    23.3      68,176    23.8
    Income from operations              4,054     1.4       3,519     1.2
    Interest income expense - net        -253     0.1        -242     0.1
    Income before income taxes          3,801     1.3       3,277     1.1
    Income taxes                        1,398     0.5       1,311     0.4
    Net income                         $2,403     0.8      $1,966     0.7
    Net income per share                $0.18               $0.15
    Shares used in per
     share computation                 13,719              13,464

                             THE GOOD GUYS, INC.
                         Consolidated Balance Sheets
                                 (Unaudited)
                            (Amounts in thousands)

                                                     December 31
                                                 1997           1996

    ASSETS
    Current Assets:
     Cash                                       $28,414        $32,094
     Receivables                                 28,845         33,300
     Income tax receivable                        5,219          5,964
     Inventories                                145,828        155,800
     Prepaid assets                               8,002          7,520
    Total Current Assets                        216,308        234,678
    Property and equipment, net                  64,103         58,386
    Other assets                                  2,108          2,017
    Total assets                               $282,519       $295,081

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current Liabilities:
     Accounts payable                          $103,647        $98,007
     Accrued expenses                            58,298         66,849
    Total current liabilities                   161,945        164,856
    Shareholders' equity                        120,574        130,225
    Total liabilities and shareholders' equity $282,519       $295,081

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