Hastings Entertainment Inc. (HAST) filed Quarterly Report for the period ended 2012-04-30.
Hasting Entmt has a market cap of $17.2 million; its shares were traded at around $1.98 . Hasting Entmt had an annual average earning growth of 0.2% over the past 10 years.
Highlight of Business Operations:Revenues. Total revenues for the first quarter decreased approximately $8.6 million, or 7.0%, to $115.5 million compared to $124.1 million for the first quarter of fiscal 2011. As of April 30, 2012, we operated 8 less superstores, as compared to April 30, 2011. In addition to our superstores, we operated two additional concept stores, TRADESMART (Littleton) and Sun Adventures Sports (Lubbock), as compared to April 30, 2011. The following is a summary of our revenues results (dollars in thousands):
Gross Profit Merchandise. For the first quarter, total merchandise gross profit dollars decreased approximately $0.3 million, or 0.9%, to $32.0 million from $32.3 million for the same period in the prior year, primarily due to a decrease in revenue partially offset by an increase in margin rates. As a percentage of total merchandise revenue, merchandise gross profit increased to 32.1% for the quarter compared to 31.0% for the same period in the prior year. The increase in gross profit rate resulted primarily from a shift in mix of revenues by category as compared to the same quarter in the prior year, lower costs to return products to vendors and lower distribution center costs partially offset by increased freight expense.
Gross Profit Rental. For the first quarter, total rental gross profit dollars decreased approximately $1.9 million, or 15.6%, to $10.3 million from $12.2 million for the same period in the prior year, primarily due to a decrease in revenue. As a percentage of total rental revenue, rental gross profit increased to 65.2% for the quarter compared to 62.7% for the same period in the prior year, resulting primarily from lower depreciation and shrinkage expense. Depreciation is a function of rental purchases which were significantly lower for the first quarter of fiscal 2012 than the same quarter in the last year due to lower anticipated rental revenues.
Selling, General and Administrative Expenses (SG&A). As a percentage of total revenue, SG&A increased slightly for the first quarter to 35.8% from 35.2% for the same quarter in the prior year, primarily due to deleveraging resulting from lower revenues. SG&A decreased approximately $2.4 million during the quarter, or 5.5%, to $41.3 million compared to $43.7 million for the same quarter last year. The decrease results primarily from a decrease of approximately $1.6 million in store labor costs and a decrease of approximately $0.7 million in occupancy expense including depreciation. The decrease in occupancy expense and to a certain extent the decrease in store labor costs are primarily a result of operating eight fewer superstores this quarter compared to the prior year.
Operating Activities. Net cash provided by operating activities totaled approximately $17.6 million for the three months ended April 30, 2012, compared to cash provided by operating activities of $7.4 million for the three months ended April 30, 2011. Net income for the current quarter was approximately $0.8 million compared to $0.4 million for same period in fiscal 2011. Merchandise inventories decreased approximately $8.9 million for the current quarter, compared to $0.5 million during the same period in fiscal 2011 primarily due to a reduction in inventory purchases in anticipation of lower revenues. Trade accounts payable increased $2.3 million for the current quarter compared to an increase of $4.0 million during the same period in fiscal 2011. Merchandise inventories, net of trade accounts payable, decreased approximately $11.2 million for the current quarter compared to an decrease of $4.6 million for the same quarter in the prior year primarily due to the higher decrease in merchandise inventories in the current period and differences of timing of payments to vendors surrounding the holiday purchases in the current year compared to the prior year. For fiscal 2012, we estimate net cash provided by operations of approximately $7.0 to $9.0 million as compared to a net use of cash of approximately $4.5 million in fiscal 2011. The expected increase from fiscal 2011 net cash used in operations to estimated fiscal 2012 net cash provided by operations results primarily from projected changes in various balance sheet accounts, primarily lower inventories and a projected decrease in net loss for fiscal 2012.
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