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Hhgregg Announces First Fiscal Quarter Operating Results

Other factors that could cause actual results to differ from those implied by the forward-looking statements in this press release are more fully described in the “Risk Factors” section in the Company’s fiscal 2012 Form 10-K filed May 23, 2012, and in the “Risk Factors” section in the Company’s fiscal 2013 Form 10-Q filed August 2, 2012. Given these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements included in this press release are made only as of the date hereof. hhgregg does not undertake, and specifically declines, any obligation to update any of these statements or to publicly announce the results of any revisions to any of these statements to reflect future events or developments.

 
 

HHGREGG, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

           
Three Months Ended
June 30, 2012 June 30, 2011
(In thousands, except share and per share data)
Net sales $ 489,856 $ 431,455
Cost of goods sold   343,197   301,141
Gross profit 146,659 130,314
Selling, general and administrative expenses 118,773 103,244
Net advertising expense 27,616 20,195
Depreciation and amortization expense   9,414   7,287
Loss from operations (9,144) (412)
Other expense (income):
Interest expense 478 512
Interest income   (2)   (4)
Total other expense   476   508
Loss before income taxes (9,620) (920)
Income tax benefit   (3,920)   (159)
Net loss $ (5,700) $ (761)
 
Net loss per share
Basic $ (0.16) $ (0.02)
Diluted $ (0.16) $ (0.02)
Weighted average shares outstanding-basic 36,138,688 39,501,518
Weighted average shares outstanding-diluted 36,138,688 39,501,518
 
 
 

HHGREGG, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(AS A PERCENTAGE OF NET SALES)

(UNAUDITED)

       
Three Months Ended

June 30, 2012

   

June 30, 2011

Net sales 100.0 % 100.0 %
Cost of goods sold

70.1

69.8

Gross profit

29.9

30.2

Selling, general and administrative expenses

24.3

23.9

Net advertising expense

5.6

4.7

Depreciation and amortization expense

1.9

1.7

Loss from operations

(1.9)

(0.1)

Other expense (income):
Interest expense 0.1

0.1

Interest income - -
Total other expense 0.1

0.1

Loss before income taxes

(2.0)

(0.2)

Income tax benefit

0.8

-

Net loss

(1.2)

%

(0.2)

%
 

Certain percentage amounts do not sum due to rounding

               
 
 

HHGREGG, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

JUNE 30, 2012, MARCH 31, 2012 AND JUNE 30, 2011

(UNAUDITED)

 
June 30, 2012 March 31, 2012 June 30, 2011
(In thousands, except share data)
Assets
Current assets:
Cash and cash equivalents $ 4,289 $ 59,244 $ 1,910
Accounts receivable—trade, less allowances of $27, $25 and $96, respectively 28,603 19,467 13,150
Accounts receivable—other 23,067 18,630 23,280
Merchandise inventories, net 326,892 282,409 291,600
Prepaid expenses and other current assets 5,707 5,562 5,632
Income tax receivable 7,743 - 6,456
Deferred income taxes   9,775   9,639   6,487
Total current assets   406,076   394,951   348,515
Net property and equipment 214,150 204,273 180,896
Deferred financing costs, net 2,490 2,656 3,154
Deferred income taxes 38,093 38,970 46,327
Other assets   1,059   1,934   1,159
Total long-term assets   255,792   247,833   231,536
Total assets $ 661,868 $ 642,784 $ 580,051
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 144,859 $ 122,596 $ 131,815
Line of credit - - 5,850
Customer deposits 36,239 28,993 27,969
Accrued liabilities 46,339 43,735 43,369
Income tax payable   -   4,358   -
Total current liabilities   227,437   199,682   209,003
Long-term liabilities:
Deferred rent 73,520 71,304 63,380
Other long-term liabilities   12,241   12,278   12,136
Total long-term liabilities   85,761   83,582   75,516
Total liabilities   313,198   283,264   284,519
Stockholders’ equity:
Preferred stock, par value $.0001; 10,000,000 shares authorized; no shares issued and outstanding as of June 30, 2012, March 31, 2012 and June 30, 2011, respectively - - -
Common stock, par value $.0001; 150,000,000 shares authorized; 40,559,245, 40,066,005 and 39,749,739 shares issued; and 35,768,882, 36,351,716 and 38,241,499 shares outstanding as of June 30, 2012, March 31, 2012 and June 30, 2011, respectively 4 4 4
Additional paid-in capital 283,891 277,846 270,534
Retained earnings 123,581 129,281 47,147
Common stock held in treasury at cost,4,790,363, 3,714,289 and 1,508,240 shares as of June 30, 2012, March 31, 2012 and June 30, 2011, respectively   (58,765)   (47,570)   (22,112)
348,711 359,561 295,573
Note receivable for common stock   (41)   (41)   (41)
Total stockholders’ equity   348,670   359,520   295,532
Total liabilities and stockholders’ equity $ 661,868 $ 642,784 $ 580,051
 
 
 

HHGREGG, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED JUNE 30, 2012 AND 2011

(UNAUDITED)

       
Three Months Ended
June 30, 2012     June 30, 2011
(In thousands)
Cash flows from operating activities:
Net Loss $ (5,700) $ (761)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 9,414 7,287
Amortization of deferred financing costs 166 166
Stock-based compensation 1,694 1,623
Excess tax benefits from stock-based compensation (546) (13)
Gain on sales of property and equipment (76) (64)
Deferred income taxes 741 5,177
Tenant allowances received from landlords 1,984 6,120
Changes in operating assets and liabilities:
Accounts receivable—trade (9,136) (4,219)
Accounts receivable—other (2,801) (1,400)
Merchandise inventories (44,483) (79,592)
Income tax receivable (12,101) (8,355)
Prepaid expenses and other assets 730 5,311
Accounts payable 2,235 30,232
Customer deposits 7,246 6,178
Accrued liabilities 3,150 (3,948)
Deferred rent (1,404) (54)
Other long-term liabilities   30   (273)
Net cash used in operating activities   (48,857)   (36,585)
Cash flows from investing activities:
Purchases of property and equipment (15,221) (28,991)
Proceeds from sales of property and equipment   17   1
Net cash used in investing activities   (15,204)   (28,990)
Cash flows from financing activities:
Purchases of treasury stock (11,195) (22,112)
Proceeds from exercise of stock options 3,805 221
Excess tax benefits from stock-based compensation 546 13
Net increase in bank overdrafts 4,824 10,807
Net borrowings on line of credit - 5,850
Net borrowings on inventory financing facility 11,126 -
Payment of financing costs   -   (88)
Net cash provided by (used in) financing activities   9,106   (5,309)
Net decrease in cash and cash equivalents (54,955) (70,884)
Cash and cash equivalents
Beginning of period   59,244   72,794
End of period $ 4,289 $ 1,910
Supplemental disclosure of cash flow information:
Interest paid $ 29 $ 21
Income taxes paid $ 6,894 $ 3,045
Capital expenditures included in accounts payable $ 5,294 $ 2,994
 
 
 
HHGREGG, INC. AND SUBSIDIARIES

Store Count by Quarter for Fiscal Years 2011, 2012 and 2013

(Unaudited)

                                       
FY2011 FY2012 FY2013
Q1     Q2     Q3     Q4 Q1     Q2     Q3     Q4 Q1
 
Beginning Store Count 131 157 169 173 173 180 204 208 208
Store Openings 26 12 4 1 7 24 4 2
Store Closures - - - (1) - - - - -
                 
Ending Store Count 157 169 173 173 180 204 208 208 210
 

Note: hhgregg, Inc.'s fiscal year is comprised of four quarters ending June 30th, September 30th, December 31st and March 31st.

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