GameStop Corp. Comparable Sales Up 32.0 Percent in 2001; EPS for 2001 Exceeds Estimate
GameStop IPO Completed; Raises $348.0 Million; Earnings Guidance for 2002 Provided
GameStop Corp. (NYSE:GME), the nation's largest video game and entertainment software specialty retailer, today reported sales and earnings for the fourth quarter and for the full year ended Feb. 2, 2002.GameStop sales were $514.2 million for the quarter, an increase of 57.2 percent, and $1,121.1 million for the year, an increase of 48.2 percent. On a comparable store basis, sales increased 58.7 percent for the fourth quarter and 32.0 percent for the year.
Completing a strong year-long sales trend with a very successful fourth quarter, the company earned $7.0 million, or $.18 per share, for fiscal 2001, as compared to a loss of $12.0 million, or ($.33) per share, in the prior fiscal year. On a pro forma basis, excluding interest on debt repaid with the IPO proceeds of $4.7 million for the fourth quarter, and $20.0 million for the fiscal year, and goodwill amortization of $2.8 million for the fourth quarter, and $11.1 million for the fiscal year, the company earned $.39 per share in the fourth quarter, and $.45 per share for fiscal 2001, which exceeded previous estimates.
For the year, EBITDA rose 132% to $64.4 million. The strong cash flows enabled the company to complete its new store openings and system enhancements, and fund other initiatives.
GameStop IPOIn February 2002, GameStop Corp. successfully completed its initial public offering, raising net proceeds of $348.0 million, including the exercise of the underwriter's over-allotment option. GameStop Corp. used $250.0 million to repay indebtedness to Barnes & Noble and the remainder will be used for working capital and general corporate purposes.
Guidance for Fiscal 2002The following guidance is based upon market factors and trends that we can reasonably forecast at this time. It is important to note that quarterly results may fluctuate due to the release dates of certain major titles, and/or the timing of potential price reductions on existing hardware systems.
In addition, the Christmas season, a critical portion of the fourth quarter, is much more influenced by external factors to our business: the strength of the economy, employment levels, and other events that would influence gift purchasing.
We forecast that earnings per share will range from $.84 to $.90 for fiscal 2002, with comparable store sales increasing between 15% and 20%. The first three quarters of fiscal 2002 are expected to contribute EPS of $.05, $.05 and $.12, respectively, while comparable store sales should increase 20%, 15% and 20%, respectively, during these quarters. The fourth quarter, which contains the holiday shopping season, is expected to contribute between $.62 and $.68 per share, with comparable store sales increases ranging from 8% to 12%.
"Our very successful IPO has resulted in GameStop having a strong, debt-free balance sheet, and the funds needed to accelerate the expansion of our business," said Dick Fontaine, GameStop's Chairman and CEO. "In addition, the large and growing installed base of new hardware systems, coupled with strong new title releases for each platform throughout the year, has set the table for GameStop to have an outstanding year."
About GameStop Corp.Headquartered in Grapevine, Texas, GameStop Corp. (NYSE:GME), is the nation's largest video game and entertainment software specialty retailer. The company operates 1,039 retail stores throughout 49 states, the District of Columbia and Puerto Rico, under the GameStop(R), Babbage's(R), Software Etc.(TM) and FuncoLand(R) brands. In addition, the company owns a commerce-enabled Web property, GameStop.com, and Game Informer magazine, a leading video and computer game publication.
GameStop Corp. sells the most popular new software, hardware and game accessories for the PC and next generation video game systems from Sony, Nintendo, and Microsoft, and is also the industry's largest reseller of used video games. In addition, the company sells computer and video game magazines and strategy guides, action figures, and other related merchandise to more than 30 million customers.
General information on GameStop Corp. can be obtained via the Internet by visiting the company's corporate Web site: http://www.gamestop.com/investor-relations
SAFE HARBORThis press release (including the attached schedules) contains "forward-looking statements." GameStop Corp. is including this statement for the express purpose of availing itself of the protections of the safe harbor provided by the Private Securities Litigation Reform Act of 1995 with respect to all such forward-looking statements. These forward-looking statements are based on currently available information and represent the beliefs of the management of the company. These statements are subject to risks and uncertainties that could cause actual results to differ materially. These risks include, but are not limited to, general economic and market conditions, decreased consumer demand for the company's products, possible disruptions in the company's computer or telephone systems, possible work stoppages or increases in labor costs, possible increases in shipping rates or interruptions in shipping service, effects of competition, possible disruptions or delays in the opening of new stores or the inability to obtain suitable sites for new stores, higher than anticipated store closing or relocation costs, higher interest rates, the performance of the company's online and other initiatives, the successful integration of acquired businesses, unanticipated increases in merchandise or occupancy costs, unanticipated adverse litigation results or effects, product shortages, and other factors which may be outside of the company's control. Please refer to the company's reports on file with the SEC for a more detailed discussion of these and other risks that could cause results to differ materially.
GameStop Corp.
Statements of Operations
(in thousands of dollars, except per share data)
13 weeks 14 weeks
ended ended
Feb. 2, 2002 Feb. 3, 2001
----------- -----------
Sales $ 514,211 $ 327,054
Cost of sales 403,405 252,361
----------- -----------
Gross profit 110,806 74,693
Selling, general and
administrative expenses 66,733 53,473
Depreciation and amortization 5,149 4,323
Amortization of goodwill 2,781 2,748
----------- -----------
Operating earnings 36,143 14,149
Interest expense, net 4,002 7,397
----------- -----------
Earnings before income
tax expense 32,141 6,752
Income tax expense 13,355 3,245
----------- -----------
Net earnings $ 18,786 $ 3,507
=========== ===========
Net earnings per common share:
Basic $ 0.52 $ 0.10
Diluted $ 0.47 $ 0.10
Weighted average common shares
outstanding
Basic 36,009,000 36,009,000
Diluted 40,114,070 36,009,000
Percentage of sales:
Sales 100.0% 100.0%
Cost of sales 78.5% 77.2%
----------- -----------
Gross profit 21.5% 22.8%
SG&A expenses 13.0% 16.3%
Depreciation and amortization 1.0% 1.3%
Amortization of goodwill 0.5% 0.8%
----------- -----------
Operating earnings 7.0% 4.4%
Interest expense, net 0.7% 2.3%
----------- -----------
Earnings before income
tax expense 6.3% 2.1%
Income tax expense 2.6% 1.0%
----------- -----------
Net earnings 3.7% 1.1%
=========== ===========
Note: Income tax expense is presented as if tax returns were filed on
a stand-alone basis.
GameStop Corp.
Statements of Operations
(in thousands of dollars, except per share data)
52 weeks 53 weeks
ended ended
Feb. 2, 2002 Feb. 3, 2001
----------- -----------
Sales $ 1,121,138 $ 756,697
Cost of sales 854,035 570,995
----------- -----------
Gross profit 267,103 185,702
Selling, general and administrative
expenses 202,719 157,891
Depreciation and amortization 19,172 12,974
Amortization of goodwill 11,125 9,223
----------- -----------
Operating earnings 34,087 5,614
Interest expense, net 19,452 23,411
----------- -----------
Earnings (loss) before income
tax expense (benefit) 14,635 (17,797)
Income tax expense (benefit) 7,675 (5,836)
----------- -----------
Net earnings (loss) $ 6,960 $ (11,961)
=========== ===========
Net earnings (loss) per common share:
Basic $ 0.19 $ (0.33)
Diluted $ 0.18 $ (0.33)
Weighted average common shares
outstanding
Basic 36,009,000 36,009,000
Diluted 39,396,714 36,009,000
Percentage of sales:
Sales 100.0% 100.0%
Cost of sales 76.2% 75.5%
----------- -----------
Gross profit 23.8% 24.5%
SG&A expenses 18.1% 20.9%
Depreciation and amortization 1.7% 1.7%
Amortization of goodwill 1.0% 1.2%
----------- -----------
Operating earnings 3.0% 0.7%
Interest expense, net 1.7% 3.1%
----------- -----------
Earnings (loss) before income
tax expense (benefit) 1.3% -2.4%
Income tax expense (benefit) 0.7% -0.8%
----------- -----------
Net earnings (loss) 0.6% -1.6%
=========== ===========
Note: Income tax expense is presented as if tax returns were filed on
a stand-alone basis.
GameStop Corp.
Balance Sheets
(in thousands of dollars, except per share data)
Feb. 2, 2002 Feb. 3, 2001
----------- -----------
ASSETS:
Current assets:
Cash and cash equivalents $ 80,750 $ 8,641
Receivables, net 5,930 3,726
Merchandise inventories 138,351 108,853
Prepaid expenses and other
current assets 8,255 13,682
Deferred taxes 3,418 3,533
----------- -----------
Total current assets 236,704 138,435
----------- -----------
Property and equipment:
Leasehold improvements 27,898 20,874
Fixtures and equipments 57,579 45,236
----------- -----------
85,477 66,110
Less accumulated depreciation
and amortization 33,854 14,742
----------- -----------
Net property and equipment 51,623 51,368
----------- -----------
Goodwill, net 308,292 319,418
Other noncurrent assets 559 536
----------- -----------
Total assets $ 597,178 $ 509,757
=========== ===========
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT):
Current liabilities:
Accounts payable $ 148,597 $ 102,837
Accrued liabilities 57,000 37,324
----------- -----------
Total current liabilities 205,597 140,161
Payable to Barnes & Noble, Inc. 399,623 385,148
Deferred taxes 3,065 2,862
Other long-term liabilities 2,543 2,196
----------- -----------
Total liabilities 610,828 530,367
----------- -----------
Stockholders' equity (deficit):
Preferred stock - authorized 5,000
shares; no shares issued or outstanding -- --
Class A common stock - $.001 par value;
authorized 300,000 shares; no shares
issued or outstanding -- --
Class B common stock - $.001 par value;
authorized 100,000 shares; 36,009 shares
issued and outstanding 36 36
Additional paid-in capital (15,902) (15,902)
Retained earnings (deficit) 2,216 (4,744)
----------- -----------
Total stockholders' equity (deficit) (13,650) (20,610)
----------- -----------
Total liabilities and stockholders'
equity (deficit) $ 597,178 $ 509,757
=========== ===========
GameStop Corp.
Retail Sales Mix
13 weeks 14 weeks
ended ended
Feb. 2, 2002 Feb. 3, 2001
----------- -----------
Video Game Hardware 29% 18%
Video Game Software 48% 50%
Video Game Accessories 13% 12%
PC Software 7% 13%
PC Accessories and Other 3% 7%
52 weeks 53 weeks
ended ended
Feb. 2, 2002 Feb. 3, 2001
----------- -----------
Video Game Hardware 25% 15%
Video Game Software 48% 49%
Video Game Accessories 12% 11%
PC Software 10% 17%
PC Accessories and Other 5% 8%
CONTACT: GameStop Corp., Grapevine
Media Contact:
Lori M. Milovich, 817/424-2130
or
Investor Contact:
David W. Carlson, 817/424-2130
URL: http://www.businesswire.com
Today's News On The Net - Business Wire's full file on the Internet
with Hyperlinks to your home page.
Copyright (C) 2002 Business Wire. All rights reserved.