AMARILLO, Texas, March 24, 2014 /PRNewswire/ -- Hastings
Entertainment, Inc. (NASDAQ: HAST), a leading multimedia
entertainment retailer, today reported results for the three months
and fiscal year ended January 31,
2014. Net income was approximately $2.3 million, or $0.29 per diluted share, for the three months
ended January 31, 2014 compared to
net income of approximately $1.2
million, or $0.15 per diluted
share, for the three months ended January
31, 2013. Net loss was approximately $10.2 million, or $1.25 per diluted share, for the fiscal year
ended January 31, 2014 compared to a
net loss of $9.3 million, or
$1.14 per diluted share, for the
fiscal year ended January 31,
2013.
"As we have previously disclosed, one of our strategic
initiatives is the introduction of new product categories which
include consumer electronics, music electronics and accessories,
vinyl, hobby, recreation and lifestyle and tablets," said
John H. Marmaduke, Chief Executive
Officer and Chairman. "The majority of these products are
included in our Electronics category which had a comparable sales
increase of 5.2% for the fourth quarter of fiscal 2013 which is on
top of a 15.1% comparable sales increase for the fourth quarter of
fiscal 2012. Several of the remaining new categories are included
in our Trends department which had a 25.1% increase for the fourth
quarter of fiscal 2013 which is on top of a 6.2% increase for the
fourth quarter of fiscal 2012. This was driven by the stores that
were reset during fiscal 2012 and thirty-three stores reset by the
end of December of fiscal year 2013. The Electronic and Trends
departments in these reset stores had significant increases in
revenues when compared to the rest of our superstores that
have not had a reset. We are greatly encouraged by the
performance of these new products. With the launch of
the PlayStation 4 and Xbox One game consoles our Video Game Comps
increased 10.7% for the quarter which compares to a decrease of
22.0% for the fourth quarter of fiscal 2012. Revenues for
Music, Books and Rental continue to be impacted by the popularity
of digital delivery, rental kiosks and subscription based
services.
"In order to reduce our SG&A expenses in light of our lower
revenue base, we underwent a restructuring of our corporate store
support center which included staff reduction, department
consolidation and the termination of four of our eight corporate
officers. The total cost of this restructuring was
approximately $1.4 million which we
recognized during the first quarter of fiscal 2013. Additionally,
we closed ten underperforming stores in fiscal 2013. For the
fiscal year we reduced selling, general and administrative expenses
by approximately $12.2 million
excluding the restructuring charge."
Financial Results for the Fourth Quarter of Fiscal Year 2013
Revenues. Total revenues for the fourth quarter
decreased approximately $5.2 million,
or 3.7%, to $136.4 million compared
to $141.6 million for the fourth
quarter of fiscal 2012. As of January
31, 2014, we operated ten fewer Hastings superstores, as
compared to January 31, 2013.
The following is a summary of our revenues results (dollars in
thousands):
|
|
Three Months Ended
January 31,
|
|
|
|
|
2014
|
|
2013
|
|
Increase/(Decrease)
|
|
|
|
|
Percent
|
|
|
|
Percent
|
|
|
|
|
Revenues
|
|
Of Total
|
|
Revenues
|
|
Of Total
|
|
Dollar
|
|
Percent
|
Merchandise
Revenue
|
$
|
122,511
|
|
89.8%
|
$
|
125,992
|
|
89.0%
|
$
|
(3,481)
|
|
-2.8%
|
Rental
Revenue
|
|
13,820
|
|
10.1%
|
|
15,608
|
|
11.0%
|
|
(1,788)
|
|
-11.5%
|
Gift Card
Breakage
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
50
|
|
0.0%
|
|
40
|
|
0.0%
|
|
10
|
|
25.0%
|
Total Revenues
|
$
|
136,381
|
|
100.0%
|
$
|
141,640
|
|
100.0%
|
$
|
(5,259)
|
|
-3.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stores open at period
end
|
|
130
|
|
|
|
140
|
|
|
|
(10)
|
|
-7.1%
|
|
Comparable-store
revenues ("Comp")
|
|
Total
|
1.2%
|
Merchandise
|
2.2%
|
Rental
|
-6.7%
|
Below is a summary of the Comp results for our major merchandise
categories:
|
Three Months Ended
January 31,
|
|
2014
|
|
2013
|
Trends
|
25.1%
|
|
6.2%
|
Video
Games
|
10.7%
|
|
-22.0%
|
Electronics
|
5.2%
|
|
15.1%
|
Movies
|
1.4%
|
|
-0.8%
|
Consumables
|
-0.6%
|
|
-1.7%
|
Hardback
Cafe
|
-3.7%
|
|
10.7%
|
Books
|
-8.2%
|
|
-4.5%
|
Music
|
-11.5%
|
|
-12.9%
|
Trends Comps increased 25.1% for the quarter, primarily due to
increased sales in novelty gifts and toys, boxed games, action
figures, children's toys, licensed and branded products and
recreational and lifestyle products. Licensed and branded
products for which we experienced strong sales during the quarter
were Sons of Anarchy, Walking Dead and Doctor
Who. The Trends department also includes recreation and
lifestyles products whose growth was driven by the addition of
hobby products to reset stores as well as pet accessories and
outdoor accessories. Hobby products showed significant growth
during the quarter led by sales of remote control vehicles and
model kits. Video Games Comps increased 10.7% for the
quarter, primarily due to the launch of the PlayStation 4 and Xbox
One game consoles, as well as an increase in consumer purchases of
new and used games. Electronics Comps increased 5.2% for the
quarter, primarily due to increased sales of big screen televisions
and turntables. In addition, with the release of two new
iPhone models we had increased sales in phone accessories.
Movies Comps increased 1.4% for the quarter, primarily due to
increased sales of new and used Blu-ray and traditional DVDs,
partially offset by a decrease in Midline new and used DVDs.
Consumables Comps decreased 0.6% for the quarter, primarily due to
lower sales of bottle drinks, fountain drinks and everyday
consumable items, partially offset by an increase in seasonal
candies. Hardback Cafe Comps decreased 3.7% for the quarter,
primarily due to the closing of seven Hardback Cafes which operated
in comp stores. Books Comps decreased 8.2% for the quarter,
primarily due to a weaker release schedule for new books and a
decrease in trade paperback sales, as compared to the fourth
quarter of fiscal 2012, which included higher sales from the
Fifty Shades trilogy. Sales of digital hardware also
decreased for the quarter as compared to the same period in the
prior year. Music Comps decreased 11.5% for the quarter,
primarily due to a significant reduction in retail space in the 36
stores that were reset in fiscal 2013 as well as the increasing
popularity of digital delivery, partially offset by the increased
sales of new vinyl albums.
Rental Comps decreased 6.7% during the quarter, primarily due to
fewer rentals of traditional DVDs and video games, partially offset
by an increase in rentals of Blu-ray movies. Rental Movie
Comps decreased 5.4% for the fourth quarter as we continue to be
affected by competitor rental kiosks and subscription-based rental
services. Rental Video Game Comps decreased 18.8%.
Gross Profit – Merchandise. For the fourth quarter,
total merchandise gross profit dollars decreased approximately
$1.5 million, or 4.0%, to
$36.4 million from $37.9 million for the same quarter in the prior
year primarily due to a decrease in revenue and a slight decrease
in margin rates. The decrease in revenue was primarily attributed
to operating fewer superstores this quarter compared to the same
period in the prior year. As a percentage of total
merchandise revenue, merchandise gross profit decreased to 29.7%
for the quarter compared to 30.1% for the same quarter in the prior
year, resulting primarily from a continued shift in mix of revenues
by category and increased merchandise markdowns, partially offset
by lower freight expense, lower expense to return products and
lower shrinkage.
Gross Profit – Rental. For the fourth quarter,
total rental gross profit dollars decreased approximately
$1.4 million, or 14.1%, to
$8.5 million from $9.9 million for the same quarter in the prior
year, due to a decrease in revenue partially attributed to
operating fewer superstores this quarter compared to the same
quarter in the prior year. As a percentage of total rental
revenue, rental gross profit decreased to 61.2% for the quarter
compared to 63.2% for the same quarter in the prior year, primarily
due to an increase in revenues under revenue sharing agreements,
which generally have lower margins when compared to traditional
agreements, partially offset by a decrease in depreciation and
shrink expense. Additionally, in an effort to gain market
share, we were more promotional during the holiday season which had
a negative impact on our margin rate.
Selling, General and Administrative Expenses
("SG&A"). As a percentage of total revenue, SG&A
decreased to 31.0% for the fourth quarter compared to 32.6% for the
same period in the prior year due to a significant reduction in
SG&A expenses. SG&A decreased approximately
$4.0 million during the quarter, or
8.7%, to $42.2 million compared to
$46.2 million for the same quarter
last year. The majority of the decrease results primarily
from a $1.0 million reduction in
store labor expense, a $0.7 million
reduction in depreciation expense and a $0.5
million reduction in store advertising expense, all of which
were primarily the result of operating fewer superstores this
quarter compared to the same period in the prior year.
Several other SG&A expenses had smaller decreases or increases
during the quarter which netted to an additional $1.8 million decrease for the fourth
quarter.
Interest Expense. For both the fourth quarter of
fiscal 2013 and fiscal 2012, interest expense was approximately
$0.3 million. Interest rates
for both quarters averaged 2.5%.
Income Taxes. The effective tax rate for the fourth
quarter was 2.7% primarily due to Texas state income tax, which is based
primarily on gross margin.
Financial Results for the Fiscal Year Ended January 31, 2014
Revenues. Total revenues for the fiscal year ended
January 31, 2014 decreased
approximately $26.5 million, or 5.7%,
to $436.0 million compared to
$462.5 million for the fiscal year
ended January 31, 2013. The
following is a summary of our revenues results (dollars in
thousands):
|
|
Fiscal Year Ended
January 31,
|
|
|
|
|
2014
|
|
2013
|
|
Increase/(Decrease)
|
|
|
|
|
Percent
|
|
|
|
Percent
|
|
|
|
|
Revenues
|
|
Of Total
|
|
Revenues
|
|
Of Total
|
|
Dollar
|
|
Percent
|
Merchandise
Revenue
|
$
|
382,578
|
|
87.8%
|
$
|
402,735
|
|
87.1%
|
$
|
(20,157)
|
|
-5.0%
|
Rental
Revenue
|
|
53,043
|
|
12.2%
|
|
59,846
|
|
12.9%
|
|
(6,803)
|
|
-11.4%
|
Gift Card
Breakage
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
341
|
|
0.1%
|
|
(80)
|
|
0.0%
|
|
421
|
|
NM
|
Total Revenues
|
$
|
435,962
|
|
100.0%
|
$
|
462,501
|
|
100.0%
|
$
|
(26,539)
|
|
-5.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stores open at period
end
|
|
130
|
|
|
|
140
|
|
|
|
(10)
|
|
-7.1%
|
|
Comparable-store
revenues ("Comp")
|
Total
|
-2.8%
|
Merchandise
|
-2.0%
|
Rental
|
-7.7%
|
Below is a summary of the Comp results for our major merchandise
categories:
|
Fiscal Year Ended
January 31,
|
|
2014
|
|
2013
|
Trends
|
15.2%
|
|
8.7%
|
Electronics
|
9.9%
|
|
12.9%
|
Movies
|
2.2%
|
|
-1.1%
|
Hardback
Cafe
|
1.1%
|
|
11.1%
|
Consumables
|
-2.5%
|
|
1.5%
|
Video
Games
|
-2.9%
|
|
-21.8%
|
Books
|
-10.7%
|
|
-1.3%
|
Music
|
-12.5%
|
|
-12.0%
|
Trends Comps increased 15.2% for fiscal 2013, primarily due to
strong sales in toys and gifts, action figures, comic books,
licensed and branded products and recreational and lifestyle
products. Licensed and branded products for which we
experienced strong sales during the period were Walking
Dead, Star Wars and Doctor Who. The Trends
department also includes recreation and lifestyles products whose
growth was driven by the addition of hobby products, pet
accessories and outdoor accessories to reset stores as well as the
growth in the existing categories of skateboards and disc
golf. Hobby products showed significant growth during fiscal
2013 led by sales of remote control vehicles and model kits.
Electronics Comps increased 9.9% for fiscal 2013, primarily due to
increased sales in hardware categories, such as televisions,
turntables and speaker systems. Strong growth was also realized in
refurbished electronics. Movies Comps increased 2.2% for
fiscal 2013, primarily due to increased sales of new and used
Blu-ray, traditional and boxed set DVDs, partially offset by new,
previously viewed and used Midline DVDs. Hardback Cafe Comps
increased 1.1%, due to higher sales of iced and hot specialty cafe
drinks, partially offset by a decrease in retail products such as
mugs and baked goods. Consumables Comps decreased 2.5%,
primarily due to decreased sales in popcorn, candies, and fountain
drinks. Video Games Comps decreased only 2.9% for fiscal
2013, primarily due to the release of the PlayStation 4 and the
Xbox One game consoles in the fourth quarter as well as increased
sales in new and used games. Books Comps decreased 10.7%,
primarily due to a weaker release schedule for new books and a
decrease in trade paperback and hardback sales, as compared to
fiscal 2012, which included strong sales from the Fifty Shades
and Hunger Games trilogies. In addition, sales of digital
hardware decreased significantly for fiscal 2013 as compared to
fiscal 2012. Music Comps decreased 12.5% for the period,
primarily due to a significant reduction in retail space in the 36
stores that were reset in fiscal 2013 as well as the increasing
popularity of digital delivery, partially offset by the increased
sales of new and used vinyl albums.
Rental Comps decreased 7.7% for fiscal 2013 primarily resulting
from fewer rentals of traditional DVDs and video games, partially
offset by an increase in rentals of Blu-ray movies. Rental
Movie Comps decreased 6.3% primarily due to competition from rental
kiosks and subscription-based rental services. Rental Video
Game Comps decreased 19.8%.
Gross Profit – Merchandise. For fiscal 2013, total
merchandise gross profit dollars decreased approximately
$7.6 million, or 6.0%, to
$119.9 million from $127.5 million for the same period in the prior
year primarily due to a decrease in revenue which is primarily
attributed to operating fewer superstores for the same period in
the prior year. As a percentage of total merchandise revenue,
merchandise gross profit slightly decreased to 31.4% for fiscal
2013, compared to 31.7% for fiscal 2012, primarily due to a shift
in mix of revenues by category and higher markdown expenses,
partially offset by lower freight expense, lower expense to return
products and lower shrinkage.
Gross Profit – Rental. For fiscal 2013, total
rental gross profit dollars decreased approximately $5.1 million, or 13.0%, to $34.0 million from $39.1
million for the same period in the prior year primarily due
to a decrease in revenue which is partially attributed to operating
fewer superstores for the same period in the prior year. As a
percentage of total rental revenue, rental gross profit decreased
to 64.0% for fiscal 2013 compared to 65.3% for the prior year,
primarily due to an increase in revenues under revenue sharing
agreements, which generally have lower margins when compared to
traditional agreements. The rate decrease in partially offset
by a decrease in depreciation and shrink expense.
Selling, General and Administrative Expenses
("SG&A"). As a percentage of total revenue, SG&A
decreased to 37.5% for fiscal year 2013 compared to 37.7% for
fiscal year 2012, due to a significant reduction in SG&A
expenses. SG&A decreased approximately $10.8 million, or 6.2%, to $163.7 million compared to $174.5 million for the same period last
year. The majority of the decrease results primarily from a
$3.3 million reduction in store labor
expense, a $2.3 million reduction in
depreciation expense, a decrease of $1.7
million in store advertising expense and a decrease of
$0.6 million in store supplies, all
of which were primarily the result of operating fewer superstores
during this fiscal year compared to last fiscal year. There
was a $1.9 million reduction in
corporate salary expense due to lower bonus payouts and the
restructuring that took place in the first quarter of fiscal 2013.
Several other SG&A expenses had smaller decreases or increases
during the year which netted to an additional $1.0 million decrease for fiscal 2013.
Interest Expense. For fiscal 2013, interest expense
increased approximately $0.1 million,
or 8.3%, to $1.3 million, compared to
$1.2 million for fiscal 2012.
The increase results primarily from higher debt levels.
Interest rates for both periods averaged 2.5%.
Income Taxes. During fiscal 2013, the Company
recorded a discrete tax benefit of approximately $0.5 million from the recognition of a tax
position due to a change in state administrative practices.
No discrete items were recorded during fiscal 2012.
As the Company has a net operating loss and a net deferred tax
asset, which has been offset by a full valuation allowance at the
end of fiscal 2013, there is no tax liability, with the exception
of Texas state income tax;
therefore, considering the discrete tax benefit described above and
the Texas state income tax, the
effective tax rate for fiscal year 2013 is (2.3%). The
valuation allowance is approximately $14.3
million as of January 31,
2014. We reassess the valuation quarterly, and if future
evidence allows for a partial or full release of the valuation
allowance, a tax benefit will be recorded accordingly.
Store Activity
Since December 6, 2013, which was
the last date we reported store activity, we have the following
activity to report.
- Store closed in Borger, Texas
in February 2014
Safe Harbor Statement
This press release contains "forward-looking statements."
Hastings Entertainment, Inc. 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 based on currently available
information and represent the beliefs of the management of the
Company. These statements are subject to risks and
uncertainties that could cause actual results to differ
materially. These risks include, but are not limited to,
consumer appeal of our existing and planned product offerings, and
the related impact of competitor pricing and product offerings;
overall industry performance and the accuracy of our estimates and
judgments regarding trends; our ability to obtain favorable terms
from suppliers; our ability to respond to changing consumer
preferences, including with respect to new technologies and
alternative methods of content delivery, and to effectively adjust
our offerings if and as necessary; the application and impact of
future accounting policies or interpretations of existing
accounting policies; unanticipated adverse litigation results or
effects; the effects of a continued deterioration in economic
conditions in the U.S. or the markets in which we operate our
stores; the effect of inclement weather on the ability of consumers
to reach our stores; and other factors which may be outside of the
company's control. We undertake no obligation to affirm,
publicly update or revise any forward-looking statements, whether
as a result of new information, future events, or otherwise.
Please refer to the company's annual, quarterly, and periodic
reports on file with the Securities and Exchange Commission for a
more detailed discussion of these and other risks that could cause
results to differ materially.
About Hastings
Founded in 1968, Hastings Entertainment, Inc. is a leading
multimedia entertainment retailer that combines the sale of new and
used books, videos, video games and CDs, and trends and consumer
electronics merchandise, with the rental of videos and video games
in a superstore format. We currently operate 126 superstores,
averaging approximately 24,000 square feet, primarily in
medium-sized markets throughout the United States. We also
operate three concept stores, Sun Adventure Sports, located in
Amarillo, Texas and Lubbock, Texas, and TRADESMART, located in
Littleton, Colorado.
We operate www.goHastings.com, an e-commerce Internet web site
that makes available to our customers new and used entertainment
products and unique, contemporary gifts and toys. The site
features exceptional product and pricing offers. The Investor
Relations section of our web site contains press releases, a link
to request financial and other literature and access to our filings
with the Securities and Exchange Commission.
Consolidated Balance
Sheets
(Dollars in
thousands)
|
|
|
|
January
31,
|
|
January
31,
|
|
|
2014
|
|
2013
|
|
|
(unaudited)
|
|
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and
cash equivalents
|
$
|
3,753
|
$
|
3,730
|
Merchandise inventories, net
|
|
152,138
|
|
145,337
|
Prepaid
expenses and other current assets
|
|
10,394
|
|
10,427
|
Total current assets
|
|
166,285
|
|
159,494
|
|
|
|
|
|
Rental assets,
net
|
|
10,227
|
|
11,353
|
Property and
equipment, net
|
|
29,212
|
|
32,099
|
Intangible assets,
net
|
|
244
|
|
244
|
Other
assets
|
|
677
|
|
2,792
|
|
|
|
|
|
Total
assets
|
$
|
206,645
|
$
|
205,982
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Trade
accounts payable
|
$
|
57,236
|
$
|
54,928
|
Accrued
expenses and other current liabilities
|
|
28,359
|
|
27,396
|
Total current liabilities
|
|
85,595
|
|
82,324
|
|
|
|
|
|
Long-term debt,
excluding current maturities
|
|
51,749
|
|
41,805
|
Deferred income
taxes
|
|
60
|
|
50
|
Other
liabilities
|
|
5,239
|
|
7,828
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
Preferred stock
|
|
—
|
|
—
|
Common
stock
|
|
119
|
|
119
|
Additional paid-in capital
|
|
36,412
|
|
36,375
|
Retained
earnings
|
|
48,460
|
|
58,642
|
Accumulated other comprehensive income
|
|
347
|
|
247
|
Treasury
stock, at cost
|
|
(21,336)
|
|
(21,408)
|
Total shareholders' equity
|
|
64,002
|
|
73,975
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
206,645
|
$
|
205,982
|
|
|
|
|
Consolidated
Statements of Operations
(In thousands,
except per share data)
|
|
|
|
Three months
ended
|
|
Fiscal year
ended
|
|
|
January
31,
|
|
January
31,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Merchandise
revenue
|
$
|
122,511
|
$
|
125,992
|
$
|
382,578
|
$
|
402,735
|
Rental
revenue
|
|
13,820
|
|
15,608
|
|
53,043
|
|
59,846
|
Gift card breakage
revenue
|
|
50
|
|
40
|
|
341
|
|
(80)
|
Total
revenues
|
|
136,381
|
|
141,640
|
|
435,962
|
|
462,501
|
|
|
|
|
|
|
|
|
|
Merchandise cost of
revenue
|
|
86,112
|
|
88,100
|
|
262,639
|
|
275,251
|
Rental cost of
revenue
|
|
5,368
|
|
5,744
|
|
19,071
|
|
20,779
|
Total
cost of revenues
|
|
91,480
|
|
93,844
|
|
281,710
|
|
296,030
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
44,901
|
|
47,796
|
|
154,252
|
|
166,471
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
42,226
|
|
46,178
|
|
163,698
|
|
174,461
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
2,675
|
|
1,618
|
|
(9,446)
|
|
(7,990)
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Interest
expense, net
|
|
(345)
|
|
(302)
|
|
(1,283)
|
|
(1,173)
|
Other,
net
|
|
69
|
|
17
|
|
302
|
|
147
|
|
|
|
|
|
|
|
|
|
Income
(loss) before income taxes
|
|
2,399
|
|
1,333
|
|
(10,427)
|
|
(9,016)
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
|
65
|
|
123
|
|
(244)
|
|
297
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
$
|
2,334
|
$
|
1,210
|
$
|
(10,183)
|
$
|
(9,313)
|
|
|
|
|
|
|
|
|
|
Basic income (loss)
per share
|
$
|
0.29
|
$
|
0.15
|
$
|
(1.25)
|
$
|
(1.14)
|
|
|
|
|
|
|
|
|
|
Diluted income (loss)
per share
|
$
|
0.29
|
$
|
0.15
|
$
|
(1.25)
|
$
|
(1.14)
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares
outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
8,143
|
|
8,168
|
|
8,142
|
|
8,202
|
Dilutive effect of stock
awards
|
|
11
|
|
48
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
8,154
|
|
8,216
|
|
8,142
|
|
8,202
|
Consolidated
Statements of Cash Flows
(Dollars in
thousands)
|
|
|
|
Fiscal year ended
January 31,
|
|
|
2014
|
|
2013
|
|
|
(unaudited)
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net
loss
|
$
|
(10,183)
|
$
|
(9,313)
|
Adjustments to
reconcile net loss to net
cash
provided by (used in) operations:
|
|
|
|
|
Rental asset depreciation
expense
|
|
3.920
|
|
6,187
|
Purchases of rental
assets
|
|
(7,849)
|
|
(11,072)
|
Property and equipment
depreciation expense
|
|
12,552
|
|
14,948
|
Deferred income
taxes
|
|
10
|
|
8
|
Loss on rental assets lost,
stolen and defective
|
|
654
|
|
985
|
Loss on disposal or
impairment of property and equipment,
excluding
rental assets
|
|
607
|
|
1,411
|
Non-cash stock-based
compensation
|
|
180
|
|
704
|
|
|
|
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Merchandise inventories,
net
|
|
(2,397)
|
|
11,209
|
Prepaid expenses and other
current assets
|
|
1,963
|
|
4,802
|
Trade accounts
payable
|
|
861
|
|
1,895
|
Accrued expenses and other
current liabilities
|
|
(644)
|
|
1,246
|
Other assets and
liabilities, net
|
|
(698)
|
|
(806)
|
Net cash
provided by (used in) operating activities
|
|
(1,024)
|
|
22,204
|
Cash flows from
investing activities:
|
|
|
|
|
Purchases of property and equipment
|
|
(10,274)
|
|
(9,008)
|
Net cash
used in investing activities
|
|
(10,274)
|
|
(9,008)
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
Borrowings under revolving credit facility
|
|
437,022
|
|
433,850
|
Repayments under
revolving credit facility
|
|
(427,078)
|
|
(445,324)
|
Purchase of treasury stock
|
|
(128)
|
|
(542)
|
Cash dividends paid
|
|
—
|
|
(3,062)
|
Change in cash overdraft
|
|
1,447
|
|
1,765
|
Deferred financing costs paid
|
|
—
|
|
(325)
|
Proceeds from exercise of stock options
|
|
58
|
|
—
|
Net cash
provided by (used in) financing activities
|
|
11,321
|
|
(13,638)
|
|
|
|
|
|
Net increase
(decrease) in cash
|
|
23
|
|
(442)
|
|
|
|
|
|
Cash at beginning of
period
|
|
3,730
|
|
4,172
|
|
|
|
|
|
Cash at end of
period
|
$
|
3,753
|
$
|
3,730
|
|
|
Balance Sheet and
Other Ratios ( A )
(Dollars in
thousands, except per share amounts)
|
|
|
|
January
31,
2014
|
|
January
31,
2013
|
Merchandise
inventories, net
|
$
|
152,138
|
$
|
145,337
|
Inventory turns,
trailing 12 months ( B )
|
|
1.77
|
|
1.85
|
|
|
|
|
|
Long-term
debt
|
$
|
51,749
|
$
|
41,805
|
Long-term debt to
total capitalization ( C )
|
|
44.7%
|
|
36.1%
|
|
|
|
|
|
Book value ( D
)
|
$
|
64,002
|
$
|
73,975
|
|
|
|
|
|
Book value per share
( E )
|
$
|
7.86
|
$
|
9.02
|
|
Three Months Ended
January 31,
|
|
Fiscal Year Ended
January 31,
|
|
2014
|
2013
|
|
2014
|
|
2013
|
Comparable-store
revenues ( F ):
|
|
|
|
|
|
|
Total
|
1.2%
|
-5.7%
|
|
-2.8%
|
|
-5.1%
|
Merchandise
|
2.2%
|
-5.1%
|
|
-2.0%
|
|
-3.7%
|
Rental
|
-6.7%
|
-10.1%
|
|
-7.7%
|
|
-12.9%
|
( A )
|
Calculations may
differ in the method employed from similarly titled measures used
by other companies.
|
( B )
|
Calculated as
merchandise cost of goods sold for the period's trailing twelve
months divided by average merchandise inventory over the same
period.
|
( C )
|
Defined as long-term
debt divided by long-term debt plus total shareholders' equity
(book value).
|
( D )
|
Defined as total
shareholders' equity.
|
( E )
|
Defined as total
shareholders' equity divided by weighted average diluted shares
outstanding for the fiscal year ended January 31, 2014 and 2013,
respectively.
|
( F )
|
Stores included in
the comparable-store revenues calculation are those stores that
have been open for a minimum of 60 weeks. Also included are
stores that are remodeled or relocated during the comparable
period. Gift card breakage revenues are not included, and
closed stores are removed from each comparable period for the
purpose of calculating comparable-store revenues.
|
SOURCE Hastings Entertainment, Inc.