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Hastings Entertainment's 1st-Qtr. Revenue Slips as DVD Fattens Video Rentals

31 May, 2001 By: Hive News

Amarillo, Texas-based Hastings Entertainment Inc., a leading multimediaentertainment superstore retailer, has reported total revenues decreased $1.0 million for the fiscal first quarter ended April 30, 2001 to $109.1 million compared to $110.1 million a year ago, due to operating an average of approximately three fewer superstores during the quarter compared to the same period last year.

Total comparable store revenues were flat for the quarter; however, comps for primary retail categories,merchandise and rental video, were -0.7% and +4.2%, respectively. The declinein merchandise comps was primarily the result of lower sales of music product during the first quarter of fiscal 2001 compared to a strong first quarter of fiscal 2000, which included breakout releases from N'Sync, Santana and Dr. Dre along with significant carryover sales from a fourth quarter fiscal 1999 release from Kid Rock. Merchandise comps excluding music would have been +4.4% for the quarter ending April 30, 2001. The increase in rental video comps was primarily the result of increased DVD rentals, stronger titles when compared to last year and additional stores implementing a multi-night rental program.

No income tax benefit was recorded during the quarter ended April 30, 2001. A Hastings press release stated a belief "the entire deferred tax asset will be realized by future operating results, [but] due to the cumulative losses incurred in recent years the deferred tax asset does not currently meet the stringent criteria for recognition under SFAS 109."

Net loss before tax was $0.8 million for the current quarter, or $0.07 per common share, compared to a net loss before tax of $0.7 million, or $0.06 per common share, a year ago.

"Our net loss for the period ending April 30, 2001 was right on our estimate," stated Dan Crow, vp, finance and c.f.o. "Therefore, we are not changing our guidance on net income of $0.40 per common share for fiscal year 2001."

Hastings Entertainment Inc. currently operates 142 superstores, primarily insmall to medium-sized markets throughout the United States.

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