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 PORTLAND, Ore., Nov. 3 /PRNewswire/ -- Hollywood Entertainment Corporation (NASDAQ: HLYW) today reported revenues for the third quarter ended Sept. 30, 1993, were $4,310,484 compared to $2,960,064 during the third quarter of 1992, an increase of 46 percent. For the nine months ended Sept. 30, 1993, the company reported revenues of $11,672,603 representing a 56 percent increase over $7,463,089 in the comparable 1992 period. Same store sales for the third quarter increased 14 percent from the comparable prior year period.
 The company reported pro forma net income of $480,596 or $0.08 per share (based on 5.8 million weighted average outstanding shares -- post IPO) for the third quarter versus net income of $325,880 or $0.08 per share (based on 4.3 million weighted average outstanding shares -- pre IPO) the same period a year ago for an increase of 47 percent. Pro forma net income in the first nine months of 1993 increased 93 percent to $1,337,509 from $691,545 in the prior year period.
 Commenting on the results and recent developments at Hollywood Entertainment, Mark J. Wattles, chairman and chief executive officer, said, "Hollywood Entertainment continues to show substantial increases in revenue and net income as a combined result of new store openings, and increases in same store sales. We are very excited about the progress we are making in new store openings and anticipate continued increases in net income as a result. Cash flow from each new store opened this year has met or exceeded our projections. The company has averaged one new store opening every three weeks since our initial public offering in July 1993 for a total store count of 21 as of Nov. 2, 1993. We are currently opening one new store every two weeks and anticipate maintaining this schedule until our operational capacity allows an increase. The company will kick off its expansion into Northern California with two new stores opening in the San Francisco bay area in December of this year. Additionally, the company is on target with respect to its new store site selection process and lease negotiations for 1994 openings."
 During the third quarter, Hollywood Entertainment announced a purchase and sale agreement to acquire the 33-store Video Central superstore chain for $30.5 million. Video Central generated 1992 revenues of $31.6 million and pre-tax free cash flow of $5.3 million. The combination of Hollywood and Video Central will make Hollywood Video the third largest video retail chain. A proposal letter to lend $24.3 million towards the purchase of Video Central has been accepted and signed by the company with a closing date no later than Dec. 10, 1993. The balance of the purchase will be financed with internal capital. Craig O'danovich, the general manager of Video Central, will become the chief operating officer of Hollywood Entertainment upon closing.
 Hollywood Entertainment owns and operates 21 video retail superstores under the name Hollywood Video.
 1993 Third Quarter Results
 Periods ended Third Quarter Nine Months
 Sept. 30 1993 1992 1993 1992
 Rental revenue $3,892,161 $2,652,392 $10,376,238 $6,672,682
 Product sales 418,323 307,672 1,296,365 790,407
 Total revenue 4,310,484 2,960,064 11,672,603 7,463,089
 Operating income 795,521 628,187 2,324,555 1,378,997
 expenses, net (A) 32,925 86,307 201,046 231,452
 Income before income
 taxes 762,596 541,880 2,123,509 1,147,545
 Pro forma net
 income (B) $ 480,596 $ 325,880 $ 1,337,509 $ 691,545
 Earnings per share $0.08 $0.08 $0.28 $0.16
 Weighted average
 shares outstanding 5,768,830 4,325,080 4,811,618 4,307,669
 (A) -- Non-operating expenses are net of non-operating income and include interest expense of $90,934 and $71,387 for the third quarter ended Sept. 30, 1992 and 1993, respectively, and $246,580 and $239,508 for the nine months ended Sept. 30, 1992 and 1993, respectively.
 (B) -- Pro forma net income includes a tax adjustment to reflect the company as a C corporation rather than an S corporation for federal and state income tax purposes. The S corporation status was terminated upon completion of the company's initial public offering on July 19, 1993.
 -0- 11/3/93
 /CONTACT: Scott South, CFO of Hollywood Entertainment Corporation, 503-624-1615/

CO: Hollywood Entertainment Corporation ST: Oregon IN: REA SU: ERN

LD-GK -- NY011 -- 9962 11/03/93 08:31 EST
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Publication:PR Newswire
Date:Nov 3, 1993

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