Now let me touch on our performance by category. Video comp sales decreased 2%, Comps sales in our top 50 increase 25% during the quarter. Top 50 sales were driven by new releases including X-Men, Thor, Bridesmaids and blue release of Star Wars. Video represented 42% of our business during the quarter versus 44% last year.Music comp sales declined 7%, comp sales in our top 50 increased 6% during the quarter. The top 50 performance was driven by the sales of the latest releases from Little Wayne and Jay Z, Kanye West, and the continued momentum from the first quarter release by Adele. The music category represented 35% of our business for the quarter compared to 36% last year. Electronic comp store sales increased 16%, and electronic sales represent 9% of our total business for the quarter compared to 8% last year. Trend comp store sales increased 27%. Trend sales represented a 9% of our total business in the quarter compared to 7% last year. Video games comps store sales were down 4%, game sales represent 5% of our business, the same as rate of last year. We have games in 121 stores which represents 28% of our chain. John will now take you through financial highlights for the quarter. John? John Sullivan Thank you, Bob. Good morning. As Bob mentioned, our net loss for the quarter improved $11.6 million to $4.5 million or $0.14 per share and a 72% improvement over last year’s net loss of $16.1 million or $0.51 per share. Our EBITDA loss improved $10 million for the quarter to $2.4 million, an 81% improvement over last year’s EBITDA loss of $12.4 million. Our gross margin rate for the quarter increased 290-basis points to 37% of sales from 34.1% last year. The increase in gross profit as a percentage of sales was due to higher margin rates across all of our product categories and the leveraging of distribution and freight expenses.
SG&A expenses were $43 million, a reduction of 24% on a total sales decline of 15%, resulting in a 460-basis point decrease as a percentage of sales to 39.1% this year from 43.7% last year. The decrease in SG&A was driven by the closing of underperforming stores and the continued focus on effective expense management.Net interest expense was $774,000 in the quarter versus $927,000 last year. The company has not required any borrowings under its line of credit during the first nine months of this year, and therefore we ended the quarter without any borrowings outstanding under the line of credit. Last year we ended the quarter with $8.6 million in borrowings outstanding in the credit facility. In addition, the company more than tripled its cash balance from the prior year. We ended the quarter with cash of $19 million, compared to $6.1 million last year. Year-over-year, we have lowered our inventory by $47 million. Our quarter-end inventory position was $224 million, 17% below last year’s $271 million. On a per-square-foot basis, this is $77 of foot compared to a $76 last year. We ended the quarter with 17% fewer stores at 440 and 2.9 million square feet in operation, versus last year’s 533 stores and 3.6 million square feet. Now I’ll turn it back to Bob. Bob Higgins Thank you, John. We are very encouraged by our third quarter performance. Our flat comp demonstrates our ability to offset declines in our largest categories, video music with strong comp increases and our emerging categories of electronic and trend. Our electronics and trend categories, which combined represented 18% of our business, had a 22% comp increase in the quarter as we continue to strengthen assortment in these categories. We continued to improve our operating results during the third quarter. Year-to-date, we’ve reduced our net loss by $29 million or 67%. In addition, the year-to-date EBITDA loss improved $25 million or 78%. In fact, on a trailing 12-month basis, we generated a positive EBITDA of $8.7 million. Read the rest of this transcript for free on seekingalpha.com