MAIN NEWS HEADLINES
March 26 – April 2, 2009 Edition
Hastings Book Retailer Sees
Sharp Dip in Earnings
AMARILLO, TX/Authorlink News/03/23/09–Hastings Entertainment, Inc., a leading multimedia entertainment retailer of books and games, today reported that net earnings for the fiscal year ended January 31, 2009, fell to $4.1 million from $10.2 million a year ago. Earnings for the fourth quarter of fiscal 2008 dropped to $4.1 million from $5.8 million in the fourth quarter of fiscal 2007.
John Marmaduke, Chief Executive Officer and Chairman, said, “As the economy weakened further in the fourth quarter, we continued to outperform most of our major competitors in same-store sales. This speaks well of our multimedia store model and the relatively low price points for our new and used merchandise and rental products.”
“While fiscal 2008 results reflect the worst economic environment of our generation, we have taken aggressive action to drive sales, maintain profitability and pay down debt. This includes reducing expenses and capital expenditures and effectively managing inventory. For the fourth quarter, cash flow from operations totaled $19.4 million compared to $9.2 million for the same period in fiscal 2007. At the end of the fiscal year, merchandise inventories totaled $148.0 million which was $23.6 million less than the end of the prior fiscal year. Additionally, we reduced debt by $14.4 million during the fourth quarter whereas during the fourth quarter of last fiscal year we only reduced debt by $3.2 million.”
“Hastings remains financially healthy, with strong cash flow and ample borrowing capacity. We believe we are well-positioned to continue to weather this downturn and to accelerate results once the economy begins to rebound.”
Total revenues for the fourth quarter of fiscal year 2008 decreased approximately $4.6 million, or 2.7%, to $166.9 million compared to $171.5 million for the fourth quarter of fiscal 2007.
Marmaduke said uncertainty in the direction of the economy makes forecasts of future performance difficult. “We are assuming this very challenging environment will continue throughout fiscal 2009. As a part of our budget process we have implemented, among other actions, a freeze on raises for our associates, including senior management, and reduced capital expenditures by approximately $10.6 million.”
The company projects a low digit decrease for the year ending January 31, 2010.
Hastings Entertainment, Inc. is a leading multimedia entertainment retailer that combines the sale of new and used books, videos, video games and CDs, as well as trends merchandise, with the rental of videos and video games in a superstore format. The company currently operates 153 superstores, averaging approximately 20,000 square feet, primarily in medium-sized markets throughout the United States.
Hastings also operates www.gohastings.com, an e-commerce Internet Web site.