Hhgregg Announces Third Fiscal Quarter Operating Results

hhgregg, Inc. (NYSE: HGG):
        Three Months Ended     Nine Months Ended
December 31, December 31,
(unaudited, amounts in thousands, except share and per share data) 2013   2012 2013   2012
Net sales $ 707,053 $ 799,635 $ 1,800,290 $ 1,877,127
Net sales % decrease (11.6 )% (3.6 )% (4.1 )% (0.1 )%
Comparable store sales % decrease (1) (11.2 )% (9.7 )% (6.4 )% (8.3 )%
Gross profit as a % of net sales 26.8 % 27.3 % 28.4 % 28.7 %
SG&A as a % of net sales 18.7 % 17.4 % 20.7 % 20.4 %
Net advertising expense as a % of net sales 5.2 % 4.8 % 5.2 % 5.2 %
Depreciation and amortization expense as a % of net sales 1.5 % 1.3 % 1.8 % 1.6 %
Income from operations as a % of net sales 1.3 % 3.7 % 0.8 % 1.4 %
Net interest expense as a % of net sales 0.1 % 0.1 % 0.1 % 0.1 %
Net income $ 5,048 $ 17,389 $ 7,466 $ 15,448
Net income per diluted share $ 0.17 $ 0.51 $ 0.24 $ 0.44
Net income per diluted share, as adjusted (2) $ 0.17 $ 0.52 $ 0.25 $ 0.45
Weighted average shares outstanding—diluted 30,387,251 33,985,113 31,117,896 35,168,497
Number of stores open at the end of period 228 228
 
       

(1)
   

Comprised of net sales at stores in operation for at least 14 full months, including remodeled and relocated stores, as well as net sales for the Company’s e-commerce site.

(2)

Amounts are adjusted to exclude impairment charges. See the attached reconciliation of non-GAAP measures.
 

hhgregg, Inc. (“hhgregg” or the “Company”) today reported net income of $5.0 million, or $0.17 per diluted share, for the three month period ended December 31, 2013, compared with net income of $17.4 million, or $0.51 per diluted share, for the comparable prior year period. For the nine month period ended December 31, 2013, the Company reported net income of $7.5 million, or $0.24 per diluted share, compared with net income of $15.4 million, or $0.44 per diluted share for the comparable prior year period. Third fiscal quarter 2014 results include a $0.3 million ($0.2 million after-tax) charge related to impairment for one store. Net income, as adjusted for this item, for the three month period ended December 31, 2013 was $5.2 million, or $0.17 per diluted share, as adjusted. Net income, as adjusted for this item for the nine month period ended December 31, 2013 was $7.7 million, or $0.25 per diluted share, as adjusted. Third fiscal quarter 2013 results include a $0.5 million ($0.3 million after-tax) charge related to impairment for one store. Net income, as adjusted for this item, for the three month period ended December 31, 2012 was $17.7 million, or $0.52 per diluted share, as adjusted. Net income, as adjusted for this item for the nine month period ended December 31, 2012 was $15.8 million, or $0.45 per diluted share, as adjusted. The decrease in net income for the three months ended December 31, 2013 was largely due to a comparable store sales decrease of 11.2% and a decrease in gross margin. The decrease in net income for the nine month period was largely due to a comparable store sales decrease of 6.4% and a decrease in gross margin.

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