EXHIBIT 99.1
Electronics Boutique Announces Stock Buy-Back and Adopts New Accounting Method for Recognition of Vendor Allowances
- Early Adoption of New Accounting Method (EITF 02-16) Results in Revised Fiscal 2003 Earnings including a $4.8 Million Non-Cash Charge -
WEST CHESTER, Pa., May 1, 2003 /PRNewswire-FirstCall via COMTEX/ — Electronics Boutique Holdings Corp. (Nasdaq: ELBO) announced today that its Board of Directors has approved a program to repurchase up to 1.5 million shares of the company’s outstanding common stock. The stock repurchases may, at the discretion of the company’s management, be made from time to time on the open market or in privately negotiated transactions.
The decision was prompted by Electronics Boutique’s strong cash position and the company’s current stock price, which closed at $18.70 in yesterday’s trading. The company currently has 25,891,158 shares of common stock outstanding.
Under the buy-back program, the company may repurchase shares of its common stock from time to time in compliance with SEC regulations and subject to market conditions. The program does not require the company to acquire any specific number of shares and the company may terminate the program at any time.
Separately, the company today announced revised financial results for its fiscal year ended February 1, 2003. This revision is solely due to the company’s election to early adopt a new method of accounting for vendor allowances retroactive to the first quarter of fiscal 2003 (the quarter ended May 4, 2002). The new method is consistent with the March 20, 2003 clarification by the Financial Accounting Standards Board’s Emerging Issues Task Force (“EITF”) of the transition rules relating to accounting for vendor allowances (“EITF 02-16”), Accounting by a Customer (including a Reseller) for Certain Consideration Received from a Vendor.
The effect of the company’s early adoption of EITF 02-16 to its fiscal 2003 results is a one-time, non-cash, after-tax charge of $4.8 million or $0.18 per diluted share, which is reflected as a “cumulative effect of a change in accounting principle” and a reduction in fiscal 2003 net income before the cumulative effect of the accounting change of $1.5 million or $0.06 per diluted share. The following is a brief description of the EITF 02-16 issue and the development of the EITF consensus for its implementation.
In 2002, the EITF discussed EITF 02-16, which addresses the accounting for cash consideration received from a vendor by a reseller for various vendor- funded allowances, including cooperative advertising support. The EITF determined that cash consideration received from a vendor should be presumed to be a reduction of the prices of vendors’ products and should therefore be shown as a reduction in the cost of goods sold when recognized in the reseller’s income statements. The only exceptions to this rule are if the vendor receives an identifiable benefit or if the reimbursement is for specific, incremental identifiable costs. If the amount of
cash consideration received exceeds the cost being reimbursed, that excess amount should be characterized as a reduction of cost of goods sold when recognized in the reseller’s income statements. In January 2003, the EITF issued transition guidance concluding that this interpretation should be applied to all new or modified arrangements entered into after December 31, 2002. The company adopted this transition guidance in its financial results released on March 13, 2003 for the 2003 fourth quarter and fiscal year. At a March 20, 2003 meeting, the EITF further clarified its transition guidance under EITF 02-16 indicating that an entity that has not issued financial statements is permitted to report this change in accounting as a cumulative-effect adjustment. Following its receipt of this guidance, the company elected to adopt the new method retroactive to the beginning of fiscal 2003.
This change in accounting principle had the following impact on the company’s reported results for fiscal 2003:
About Electronics Boutique Holdings Corp.
Electronics Boutique, a Fortune 1000 company, is among the world’s largest specialty retailers dedicated exclusively to video game hardware, software and PC entertainment software and accessories. The company currently operates 1,211 stores in the United States, Australia, Canada, Denmark, Germany, Italy, New Zealand, Norway, Puerto Rico, Sweden and South Korea — primarily under the names EB Games and Electronics Boutique. The company also operates an e-commerce website at www.ebgames.com. Additional company information is available at www.ebholdings.com.
This release contains forward-looking statements. Forward-looking statements refer to expectations, projections and other characterizations of future events or circumstances and are often identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimated,” “continue” or comparable terminology. In addition to factors specified in Electronics Boutique’s recent filings with the Securities and Exchange Commission, there are other factors that could cause actual results to materially differ from those expressed or implied in such forward-looking statements, such as the continued impact of a weak economy on Electronics Boutique's sales, the schedule for new software releases, consumer demand for video game hardware and software, pricing changes by key vendors for hardware and software,
increased competition and promotional activity from other retailers, and the availability of suitable locations for new stores. In light of the risks and uncertainties inherent in the forward-looking statements, such statements should not be regarded as a representation by Electronics Boutique or any other person that the projected results, objectives or plans will be achieved. Electronics Boutique undertakes no obligation to revise or update the forward-looking statements to reflect events or circumstances after the date hereof.
The first table presents the company’s results of operations for the fiscal years ended February 1, 2003, February 2, 2002 and February 3, 2001 as reported and as adjusted to reflect the adoption of EITF 02-16 as of February 2, 2002. The second table presents the company’s results of operations for the fiscal quarters ended May 4, 2002, August 3, 2002 and November 2, 2002 as reported and as adjusted to reflect the adoption of EITF 02-16 as of February 2, 2002.
Electronics Boutique Holdings Corp.
Consolidated Statements of Income
(Amounts in thousands, except per-share amounts)
|
|
|
As
reported |
|
Actual |
|
As
reported |
|
Pro Forma |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net sales |
|
$ |
1,309,226 |
|
$ |
1,309,226 |
|
$ |
1,059,338 |
|
$ |
1,059,338 |
|
|
Management fees |
|
7,553 |
|
7,553 |
|
5,889 |
|
5,889 |
|
||||
|
Total revenues |
|
1,316,779 |
|
1,316,779 |
|
1,065,227 |
|
1,065,227 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Cost of goods sold |
|
1,013,494 |
|
971,204 |
|
826,599 |
|
784,505 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Gross profit |
|
303,285 |
|
345,575 |
|
238,628 |
|
280,722 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
||||
|
Selling, general and administrative expense |
|
222,915 |
|
267,566 |
|
179,464 |
|
222,374 |
|
||||
|
Restructuring and asset impairment charge (reversal), net |
|
(2,611 |
) |
(2,611 |
) |
12,638 |
|
12,638 |
|
||||
|
Depreciation and amortization |
|
22,524 |
|
22,524 |
|
19,750 |
|
19,750 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Operating income |
|
60,457 |
|
58,096 |
|
26,776 |
|
25,960 |
|
||||
|
Other income |
|
— |
|
— |
|
— |
|
— |
|
||||
|
Interest income, net |
|
1,677 |
|
1,677 |
|
1,884 |
|
1,884 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Income before income tax expense & cumulative effect of change in accounting principle |
|
62,134 |
|
59,773 |
|
28,660 |
|
27,844 |
|
||||
|
Income tax expense |
|
23,257 |
|
22,373 |
|
10,948 |
|
10,636 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Income before cumulative effect of change in accounting principle |
|
38,877 |
|
37,400 |
|
17,712 |
|
17,208 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Cumulative effect of change in accounting principle, net of tax |
|
— |
|
(4,773 |
) |
— |
|
— |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net income |
|
$ |
38,877 |
|
$ |
32,627 |
|
$ |
17,712 |
|
$ |
17,208 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Earnings per share excluding the cumulative effect of change in accounting principle: |
|
|
|
|
|
|
|
|
|
||||
|
Basic |
|
$ |
1.50 |
|
$ |
1.44 |
|
$ |
0.74 |
|
$ |
0.72 |
|
|
Diluted |
|
$ |
1.48 |
|
$ |
1.42 |
|
$ |
0.73 |
|
$ |
0.71 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Cumulative effect of change in accounting principle: |
|
|
|
|
|
|
|
|
|
||||
|
Basic |
|
$ |
— |
|
$ |
(0.18 |
) |
$ |
— |
|
$ |
— |
|
|
Diluted |
|
$ |
— |
|
$ |
(0.18 |
) |
$ |
— |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Earnings per share including the cumulative effect of change in accounting principle: |
|
|
|
|
|
|
|
|
|
||||
|
Basic |
|
$ |
1.50 |
|
$ |
1.26 |
|
$ |
0.74 |
|
$ |
0.72 |
|
|
Diluted |
|
$ |
1.48 |
|
$ |
1.24 |
|
$ |
0.73 |
|
$ |
0.71 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
||||
|
Basic |
|
25,833 |
|
25,833 |
|
23,868 |
|
23,868 |
|
||||
|
Diluted |
|
26,247 |
|
26,247 |
|
24,230 |
|
24,230 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Selected Balance Sheet information: |
|
|
|
|
|
|
|
|
|
||||
|
Merchandise inventories |
|
236,855 |
|
226,866 |
|
149,792 |
|
142,164 |
|
||||
|
Stockholders’ equity |
|
280,750 |
|
274,500 |
|
237,160 |
|
232,387 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Results excluding EBK and BCSC (1): |
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Total revenues |
|
$ |
1,316,779 |
|
$ |
1,316,779 |
|
1,065,227 |
|
1,065,227 |
|
|
Adjustment for EBK and BCSC (1) |
|
(13,457 |
) |
(13,457 |
) |
(32,274 |
) |
(32,274 |
) |
||
|
Total revenues excluding EBK and BCSC |
|
$ |
1,303,322 |
|
$ |
1,303,322 |
|
1,032,953 |
|
1,032,953 |
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Cost of goods sold |
|
1,013,494 |
|
971,204 |
|
826,599 |
|
784,505 |
|
||
|
Adjustment for EBK and BCSC (1) |
|
(9,632 |
) |
(9,632 |
) |
(24,056 |
) |
(24,056 |
) |
||
|
Cost of goods sold excluding EBK and BCSC |
|
1,003,862 |
|
961,572 |
|
802,543 |
|
760,449 |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Selling, general and administrative expense |
|
222,915 |
|
267,566 |
|
179,464 |
|
222,374 |
|
||
|
Adjustment for EBK and BCSC (1) |
|
(6,882 |
) |
(6,882 |
) |
(13,102 |
) |
(13,102 |
) |
||
|
Selling, general and administrative expense excluding EBK and BCSC |
|
216,033 |
|
260,684 |
|
166,362 |
|
209,272 |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Depreciation and amortization |
|
22,524 |
|
22,524 |
|
19,750 |
|
19,750 |
|
||
|
Adjustment for EBK and BCSC and goodwill amortization (1) |
|
(78 |
) |
(78 |
) |
(1,682 |
) |
(1,682 |
) |
||
|
Depreciation and amortization excluding EBK and BCSC and goodwill amortization |
|
22,446 |
|
22,446 |
|
18,068 |
|
18,068 |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Operating income |
|
60,457 |
|
58,096 |
|
26,776 |
|
25,960 |
|
||
|
Adjustment for EBK and BCSC and goodwill amortization (1) |
|
524 |
|
524 |
|
19,204 |
|
19,204 |
|
||
|
Operating income excluding EBK and BCSC and goodwill amortization |
|
60,981 |
|
58,620 |
|
45,980 |
|
45,164 |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Income before cumulative effect of change in accounting principle |
|
38,877 |
|
37,400 |
|
17,712 |
|
17,208 |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
Adjustment for EBK and BCSC and goodwill amortization (1) |
|
324 |
|
324 |
|
11,867 |
|
11,867 |
|
||
|
Income before cumulative effect of change in accounting principle excluding EBK and BCSC and goodwill amortization |
|
39,201 |
|
37,724 |
|
29,579 |
|
29,075 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Income per share before cumulative effect of change in accounting principle - diluted |
|
$ |
1.48 |
|
$ |
1.42 |
|
$ |
0.73 |
|
$ |
0.71 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Adjustment for EBK and BCSC and goodwill amortization (1) |
|
$ |
0.01 |
|
$ |
0.02 |
|
$ |
0.49 |
|
$ |
0.49 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Income per share before cumulative effect of change in accounting principle excluding EBK and BCSC and goodwill amortization - diluted |
|
$ |
1.49 |
|
$ |
1.44 |
|
$ |
1.22 |
|
$ |
1.20 |
|
(1) The company decided to close its EB Kids (“EBK”) business and sell its BC Sports collectibles (“BCSC”) business at the end of fiscal 2002. The company believes that the presentation of this information will better enable investors to analyze the results of operations of the continuing business for each period reflected. The adjusted amounts exclude the results of operations and related expenses associated with the company’s EBK and BCSC businesses in both the current and prior year periods, fiscal 2002 inventory write-down and restructuring and asset impairment charges related to these businesses, as well as the exclusion of amortization of goodwill recorded in fiscal 2002.
|
|
|
As
reported Fiscal |
|
Pro Forma
Fiscal |
|
||
|
|
|
|
|
|
|
||
|
Net sales |
|
$ |
802,851 |
|
$ |
802,851 |
|
|
Management fees |
|
4,425 |
|
4,425 |
|
||
|
Total revenues |
|
807,276 |
|
807,276 |
|
||
|
|
|
|
|
|
|
||
|
Cost of goods sold |
|
626,939 |
|
588,732 |
|
||
|
|
|
|
|
|
|
||
|
Gross profit |
|
180,337 |
|
218,544 |
|
||
|
|
|
|
|
|
|
||
|
Costs and expenses: |
|
|
|
|
|
||
|
Selling, general and administrative expense |
|
144,466 |
|
183,567 |
|
||
|
|
|
|
|
|
|
||
|
Restructuring and asset impairment charge (reversal), net |
|
— |
|
— |
|
||
|
Depreciation and amortization |
|
15,855 |
|
15,855 |
|
||
|
|
|
|
|
|
|
||
|
Operating income |
|
20,016 |
|
19,122 |
|
||
|
Other income |
|
1,550 |
|
1,550 |
|
||
|
Interest income, net |
|
3,096 |
|
3,096 |
|
||
|
|
|
|
|
|
|
||
|
Income before income tax expense |
|
24,662 |
|
23,768 |
|
||
|
Income tax expense |
|
9,791 |
|
9,436 |
|
||
|
|
|
|
|
|
|
||
|
Net income |
|
14,871 |
|
14,332 |
|
||
|
|
|
|
|
|
|
||
|
Earnings per share: |
|
|
|
|
|
||
|
Basic |
|
$ |
0.67 |
|
$ |
0.64 |
|
|
Diluted |
|
$ |
0.66 |
|
$ |
0.64 |
|
|
|
|
|
|
|
|
||
|
Weighted average shares outstanding: |
|
|
|
|
|
||
|
Basic |
|
22,254 |
|
22,254 |
|
||
|
Diluted |
|
22,466 |
|
22,466 |
|
||
|
|
|
|
|
|
|
||
|
Selected Balance Sheet information: |
|
|
|
|
|
||
|
Merchandise inventories |
|
100,185 |
|
93,373 |
|
||
|
Stockholders’ equity |
|
131,220 |
|
127,112 |
|
||
Electronics Boutique Holdings Corp.
Consolidated Statements of Income (unaudited)
(Amounts in thousands, except per-share amounts)
|
|
|
As
reported |
|
Adjusted |
|
As
reported |
|
Adjusted |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net sales |
|
$ |
236,272 |
|
$ |
236,272 |
|
$ |
261,061 |
|
$ |
261,061 |
|
|
Management fees |
|
1,368 |
|
1,368 |
|
1,574 |
|
1,574 |
|
||||
|
Total revenues |
|
237,640 |
|
237,640 |
|
262,635 |
|
262,635 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Cost of goods sold |
|
180,840 |
|
174,596 |
|
202,491 |
|
196,461 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Gross profit |
|
56,800 |
|
63,044 |
|
60,144 |
|
66,174 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
||||
|
Selling, general and administrative expense |
|
51,608 |
|
56,487 |
|
53,882 |
|
60,077 |
|
||||
|
Restructuring and asset impairment charge (reversal), net |
|
(508 |
) |
(508 |
) |
134 |
|
134 |
|
||||
|
Depreciation and amortization |
|
5,147 |
|
5,147 |
|
5,414 |
|
5,414 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Operating income |
|
553 |
|
1,918 |
|
714 |
|
549 |
|
||||
|
Other income |
|
— |
|
— |
|
— |
|
— |
|
||||
|
Interest income, net |
|
461 |
|
461 |
|
412 |
|
412 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Income before income tax expense & cumulative effect of change in accounting principle |
|
1,014 |
|
2,379 |
|
1,126 |
|
961 |
|
||||
|
Income tax expense |
|
387 |
|
908 |
|
430 |
|
367 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Income before cumulative effect of change in accounting principle |
|
627 |
|
1,471 |
|
696 |
|
594 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Cumulative effect of change in accounting principle, net of tax |
|
— |
|
(4,773 |
) |
— |
|
— |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net income |
|
627 |
|
(3,302 |
) |
696 |
|
594 |
|
||||
|
Earnings per share excluding the cumulative effect of change in accounting principle: |
|
|
|
|
|
|
|
|
|
||||
|
Basic |
|
$ |
0.02 |
|
$ |
0.06 |
|
$ |
0.03 |
|
$ |
0.02 |
|
|
Diluted |
|
$ |
0.02 |
|
$ |
0.06 |
|
$ |
0.03 |
|
$ |
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Cumulative effect of change in accounting principle: |
|
|
|
|
|
|
|
|
|
||||
|
Basic |
|
$ |
— |
|
$ |
(0.19 |
) |
$ |
— |
|
$ |
— |
|
|
Diluted |
|
$ |
— |
|
$ |
(0.19 |
) |
$ |
— |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Earnings per share including the cumulative effect of change in accounting principle: |
|
|
|
|
|
|
|
|
|
||||
|
Basic |
|
$ |
0.02 |
|
$ |
(0.13 |
) |
$ |
0.03 |
|
$ |
0.02 |
|
|
Diluted |
|
$ |
0.02 |
|
$ |
(0.13 |
) |
$ |
0.03 |
|
$ |
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
||||
|
Basic |
|
25,796 |
|
25,796 |
|
25,820 |
|
25,820 |
|
||||
|
Diluted |
|
26,364 |
|
26,364 |
|
26,260 |
|
26,260 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Selected Balance Sheet information: |
|
|
|
|
|
|
|
|
|
||||
|
Merchandise inventories |
|
154,217 |
|
147,955 |
|
158,127 |
|
151,700 |
|
||||
|
Stockholders’ equity |
|
238,471 |
|
234,542 |
|
239,484 |
|
235,453 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Results excluding EBK and BCSC (1): |
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Total revenues |
|
237,640 |
|
237,640 |
|
262,635 |
|
262,635 |
|
||||
|
Adjustment for EBK and BCSC (1) |
|
(6,123 |
) |
(6,123 |
) |
(3,539 |
) |
(3,539 |
) |
||||
|
Total revenues excluding EBK and BCSC |
|
231,517 |
|
231,517 |
|
259,096 |
|
259,096 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Cost of goods sold |
|
180,840 |
|
174,596 |
|
202,491 |
|
196,461 |
|
||||
|
Adjustment for EBK and BCSC (1) |
|
(4,928 |
) |
(4,928 |
) |
(2,234 |
) |
(2,234 |
) |
||||
|
Cost of goods sold excluding EBK and BCSC |
|
175,912 |
|
169,668 |
|
200,257 |
|
194,227 |
|
||||
|
Selling, general and administrative expense |
|
51,608 |
|
56,487 |
|
53,882 |
|
60,077 |
|
||||
|
Adjustment for EBK and BCSC (1) |
|
(3,143 |
) |
(3,143 |
) |
(1,900 |
) |
(1,900 |
) |
||||
|
Selling, general and administrative expense excluding EBK and BCSC |
|
48,465 |
|
53,344 |
|
51,982 |
|
58,177 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Depreciation and amortization |
|
5,147 |
|
5,147 |
|
5,414 |
|
5,414 |
|
||||
|
Adjustment for EBK and BCSC and goodwill amortization (1) |
|
(73 |
) |
(73 |
) |
(5 |
) |
(5 |
) |
||||
|
Depreciation and amortization excluding EBK and BCSC and goodwill amortization |
|
5,074 |
|
5,074 |
|
5,409 |
|
5,409 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Operating income |
|
553 |
|
1,918 |
|
714 |
|
549 |
|
||||
|
Adjustment for EBK and BCSC and goodwill amortization (1) |
|
1,513 |
|
1,513 |
|
734 |
|
734 |
|
||||
|
Operating income excluding EBK and BCSC and goodwill amortization |
|
2,066 |
|
3,431 |
|
1,448 |
|
1,283 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Income before cumulative effect of change in accounting principle |
|
627 |
|
1,471 |
|
696 |
|
594 |
|
||||
|
Adjustment for EBK and BCSC and goodwill amortization (1) |
|
934 |
|
934 |
|
454 |
|
454 |
|
||||
|
Income before cumulative effect of change in accounting principle excluding EBK and BCSC and goodwill amortization |
|
1,561 |
|
2,405 |
|
1,150 |
|
1,048 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Income per share before cumulative effect of change in accounting principle - diluted |
|
$ |
0.02 |
|
$ |
0.06 |
|
$ |
0.03 |
|
$ |
0.02 |
|
|
Adjustment for EBK and BCSC and goodwill amortization (1) |
|
$ |
0.04 |
|
$ |
0.03 |
|
$ |
0.01 |
|
$ |
0.02 |
|
|
Income per share before cumulative effect of change in accounting principle excluding EBK and BCSC and goodwill amortization - diluted |
|
$ |
0.06 |
|
$ |
0.09 |
|
$ |
0.04 |
|
$ |
0.04 |
|
(1) The company decided to close its EB Kids (“EBK”) business and sell its BC Sports Collectibles (“BCSC”) business at the end of fiscal 2002. The company believes that the presentation of this information will better enable investors to analyze the results of operations of the continuing business for each period reflected. The adjusted amounts exclude the results of operations and related expenses associated with the company’s EBK and BCSC businesses in both the current and prior year periods, fiscal 2002 inventory write-down and restructuring and asset impairment charges related to these businesses, as well as the exclusion of amortization of goodwill recorded in fiscal 2002.
Electronics Boutique Holdings Corp.
Consolidated Statements of Income (unaudited)
(Amounts in thousands, except per-share amounts)
|
|
|
As |
|
Adjusted |
|
As |
|
Adjusted |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net sales |
|
$ |
281,704 |
|
$ |
281,704 |
|
$ |
530,189 |
|
$ |
530,189 |
|
|
Management fees |
|
1,256 |
|
1,256 |
|
3,355 |
|
3,355 |
|
||||
|
Total revenues |
|
282,960 |
|
282,960 |
|
533,544 |
|
533,544 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Cost of goods sold |
|
216,904 |
|
207,831 |
|
413,259 |
|
392,316 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Gross profit |
|
66,056 |
|
75,129 |
|
120,285 |
|
141,228 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
||||
|
Selling, general and administrative expense |
|
51,368 |
|
65,945 |
|
66,057 |
|
85,057 |
|
||||
|
Restructuring and asset impairment charge (reversal), net |
|
(2,237 |
) |
(2,237 |
) |
— |
|
— |
|
||||
|
Depreciation and amortization |
|
5,739 |
|
5,739 |
|
6,224 |
|
6,224 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Operating income |
|
11,186 |
|
5,682 |
|
48,004 |
|
49,947 |
|
||||
|
Other income |
|
— |
|
— |
|
— |
|
— |
|
||||
|
Interest income, net |
|
375 |
|
375 |
|
429 |
|
429 |
|
||||
|
Income before income tax expense & cumulative effect of change in accounting principle |
|
11,561 |
|
6,057 |
|
48,433 |
|
50,376 |
|
||||
|
Income tax expense |
|
4,417 |
|
2,315 |
|
18,023 |
|
18,783 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Income before cumulative effect of change in accounting principle |
|
7,144 |
|
3,742 |
|
30,410 |
|
31,593 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Cumulative effect of change in accounting principle, net of tax |
|
— |
|
— |
|
— |
|
— |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net income |
|
$ |
7,144 |
|
$ |
3,742 |
|
$ |
30,410 |
|
$ |
31,593 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Earnings per share excluding the cumulative effect of change in accounting principle: |
|
|
|
|
|
|
|
|
|
||||
|
Basic |
|
$ |
0.28 |
|
$ |
0.14 |
|
$ |
1.18 |
|
$ |
1.22 |
|
|
Diluted |
|
$ |
0.27 |
|
$ |
0.14 |
|
$ |
1.16 |
|
$ |
1.21 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Cumulative effect of change in accounting principle: |
|
|
|
|
|
|
|
|
|
||||
|
Basic |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
Diluted |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Earnings per share including the cumulative effect of change in accounting principle: |
|
|
|
|
|
|
|
|
|
||||
|
Basic |
|
$ |
0.28 |
|
$ |
0.14 |
|
$ |
1.18 |
|
$ |
1.22 |
|
|
Diluted |
|
$ |
0.27 |
|
$ |
0.14 |
|
$ |
1.16 |
|
$ |
1.21 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
||||
|
Basic |
|
25,844 |
|
25,844 |
|
25,869 |
|
25,869 |
|
||||
|
Diluted |
|
26,234 |
|
26,234 |
|
26,130 |
|
26,130 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Selected Balance Sheet information: |
|
|
|
|
|
|
|
|
|
||||
|
Merchandise inventories |
|
282,917 |
|
270,986 |
|
236,855 |
|
226,866 |
|
||||
|
Stockholders’ equity |
|
248,121 |
|
240,688 |
|
280,750 |
|
274,500 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Results excluding EBK and BCSC (1): |
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Total revenues |
|
282,960 |
|
282,960 |
|
533,544 |
|
533,544 |
|
||||
|
Adjustment for EBK and BCSC (1) |
|
(3,795 |
) |
(3,795 |
) |
— |
|
— |
|
||||
|
Total revenues excluding EBK and BCSC |
|
279,165 |
|
279,165 |
|
533,544 |
|
533,544 |
|
||||
|
Cost of goods sold |
|
216,904 |
|
207,831 |
|
413,259 |
|
392,316 |
|
||||
|
Adjustment for EBK and BCSC (1) |
|
(2,470 |
) |
(2,470 |
) |
— |
|
— |
|
||||
|
Cost of goods sold excluding EBK and BCSC |
|
214,434 |
|
205,361 |
|
413,259 |
|
392,316 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Selling, general and administrative expense |
|
51,368 |
|
65,945 |
|
66,057 |
|
85,057 |
|
||||
|
Adjustment for EBK and BCSC (1) |
|
(1,839 |
) |
(1,839 |
) |
— |
|
— |
|
||||
|
Selling, general and administrative expense excluding EBK and BCSC |
|
49,529 |
|
64,106 |
|
66,057 |
|
85,057 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Depreciation and amortization |
|
5,739 |
|
5,739 |
|
6,224 |
|
6,224 |
|
||||
|
Adjustment for EBK and BCSC and goodwill amortization (1) |
|
— |
|
— |
|
— |
|
— |
|
||||
|
Depreciation and amortization excluding EBK and BCSC and goodwill amortization |
|
5,739 |
|
5,739 |
|
6,224 |
|
6,224 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Operating income |
|
11,186 |
|
5,682 |
|
48,004 |
|
49,947 |
|
||||
|
Adjustment for EBK and BCSC and goodwill amortization (1) |
|
(1,723 |
) |
(1,723 |
) |
— |
|
— |
|
||||
|
Operating income excluding EBK and BCSC and goodwill amortization |
|
9,463 |
|
3,959 |
|
48,004 |
|
49,947 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Income before cumulative effect of change in accounting principle |
|
7,144 |
|
3,742 |
|
30,410 |
|
31,593 |
|
||||
|
Adjustment for EBK and BCSC and goodwill amortization (1) |
|
(1,064 |
) |
(1,064 |
) |
— |
|
— |
|
||||
|
Income before cumulative effect of change in accounting principle excluding EBK and BCSC and goodwill amortization |
|
6,080 |
|
2,678 |
|
30,410 |
|
31,593 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Income per share before cumulative effect of change in accounting principle - diluted |
|
$ |
0.27 |
|
$ |
0.14 |
|
$ |
1.16 |
|
$ |
1.21 |
|
|
Adjustment for EBK and BCSC and goodwill amortization (1) |
|
$ |
(0.04 |
) |
$ |
(0.04 |
) |
— |
|
— |
|
||
|
Income per share before cumulative effect of change in accounting principle excluding EBK and BCSC and goodwill amortization - diluted |
|
$ |
0.23 |
|
$ |
0.10 |
|
$ |
1.16 |
|
$ |
1.21 |
|
(1) The company decided to close its EB Kids (“EBK”) business and sell its BC Sports Collectibles (“BCSC”) business at the end of fiscal 2002. The company believes that the
presentation of this information will better enable investors to analyze the results of operations of the continuing business for each period reflected. The adjusted amounts exclude the results of operations and related expenses associated with the company’s EBK and BCSC businesses in both the current and prior year periods, fiscal 2002 inventory write-down and restructuring and asset impairment charges related to these businesses, as well as the exclusion of amortization of goodwill recorded in fiscal 2002.
SOURCE Electronics Boutique Holdings Corp.
James A. Smith, Chief Financial Officer,
Electronics Boutique Holdings Corp., +1-610-430-8100
http://www.ebgames.com