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Despite DVD Boost, CD Warehouse Reports Revenue Dip, Net Loss in Third Quarter

14 Nov, 2001 By: Hive News

CD Warehouse Inc. on Wednesday announced total revenues of $6.8 million for its third quarter which endedSept. 30, 2001, compared to $7.5 million for the same period last year.

The company said total system-wide retail store sales reached $25.5 million versus $24.5 million during the same period in 2000, a 4% increase.

"We anticipated the increase in comparable store sales during the quarter due to strategic changes we have implemented during the past year for our system-wide stores," said Christopher M. Salyer, chairman and c.e.o. "The increase is a result of focus on DVD, inventory management, and customer service. The positive sales trends we are seeing going into the holidayselling season, combined with the strategic changes we have implemented, give us confidence in our ability to deliver strong results in the fourth quarter and beyond."

According to a company press release, as a result of various operational changes in company-owned stores, CD Warehouse realized a decrease in store operating expenses for the three-month period. These expenses totaled $1.9million, or 34% of retail store revenue, compared to $2.3 million, or 37% of store revenue during the same period last year.

The company also said it incurred a net loss for the quarter before impairment charges of $450,000, compared to a net loss before impairment charges of $831,000 in the comparable 2000 quarter. Impairment charges for the quarter ended Sept. 30, 2001 totaled $7.1 million, which consists of goodwill relating to the original acquisition of $2.5 million, acquisition of Disc Go Round of $3 million and company retail stores of $1.6 million. After these charges, net loss for the quarter was $7.6 million or $2.07 per share.

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