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MUSICLAND STORES CORPORATION REPORTS FIRST QUARTER RESULTS

 MINNEAPOLIS, April 14 /PRNewswire/ -- Musicland Stores Corporation (NYSE: MLG) today announced that revenues for the first quarter ended March 31, 1993 increased 21 percent to $223.7 million over the $184.7 million reported last year. The net loss was $1.8 million, or $.06 per share, an improvement of $2.0 million over last year's loss (after preferred dividends and before extraordinary charge) of $3.8 million, or $.17 per share.
 Revenues for the 12 months ended March 31, 1993 were $1.059 billion, an 11 percent increase over the $956 million reported in 1992. Net income for the 12 month period rose 192 percent to $25.5 million compared to $8.7 million (after preferred dividends and before extraordinary charge) last year.
 Jack Eugster, chairman and chief executive officer commented, "We were pleased that comparable store sales for the company were up 5.9 percent in the first quarter. Sales improvements in our Musicland and Sam Goody music stores continued to be led by strong growth in compact disc sales. Suncoast Motion Picture Company stores continued to experience strong sales gains with double digit increases in video movie sales marked by only one significant release late in the first quarter, Disney's Pinocchio."
 Eugster added, "Our large store strategy, Media Play, grew to three stores with the opening of two stores in Columbus, Ohio in March. Initial sales results in the Columbus stores are meeting our expectations. Media Play is a full media specialty retail concept operating in approximately 40,000 square feet of space and offering very large selections of music, video, books and other home entertainment products at discount prices. We are proceeding with plans to open several more Media Play stores in 1993."
 Keith Benson, vice chairman and chief financial officer stated, "Positive sales gains in the first quarter combined with interest savings offset additional promotional markdowns and costs associated with new stores and new business concepts. The first quarter of 1993 ended on March 31 versus March 25 in 1992, adding five days to the period and contributing approximately 7 percent to the total sales increase."
 In the first quarter of 1992, Musicland Stores Corporation completed an initial public offering and subsequently redeemed in April 1992 $110 million of 13-3/4 percent senior subordinated notes, for which an extraordinary charge of $8.4 million, or $.37 per common share, was recorded.
 The company opened 18 stores and closed 16 stores during the first quarter and operated a total of 1,137 stores at March 31, 1993 (861 Musicland and Sam Goody, 259 Suncoast Motion Picture Company, 3 Media Play and 14 On Cue), compared to 1,041 stores (820 Musicland and Sam Goody, 220 Suncoast Motion Picture Company and 1 On Cue) at March 25, 1992. Total square footage was 3.9 million at March 31, 1993 and 3.4 million at March 25, 1992, a 15 percent increase.
 MUSICLAND STORES CORPORATION AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
 (In thousands, except per share amounts)
 Three Months Ended Pct. Inc./
 3/31/93 3/25/92 (Dec.)
 Sales $223,725 $184,743 21.1
 Cost of sales 132,718 108,877
 Selling, general and
 administrative expenses 83,537 68,553
 Income from operations before
 amortization/depreciation 7,470 7,313 2.1
 Amortization and depreciation 6,780 6,024
 Income from operations 690 1,289
 Interest expense 4,034 8,097
 Income (loss) before income tax
 prov. (ben.)/ext. chg. (3,344) (6,808)
 Income tax provision (benefit) (1,554) (3,400)
 Redeemable senior preferred
 stock dividends - 357
 Income (loss) before ext. chg.,
 after preferred dividends (1,790) (3,765) 52.5
 Extraordinary charge - 8,440
 Net income (loss) applicable
 to common $(1,790) $(12,205)
 Weighted average
 number of shares 30,147 22,695
 Earnings (loss) per common share:
 Income (loss) after preferred
 div., before ext. chg. $(0.06) $(0.17)
 Extraordinary charge - (0.37)
 Net income (loss) per common
 share $(0.06) $(0.54)
 12 Months Ended Pct. Inc./
 3/31/93 3/25/92 (Dec.)
 Sales $1,059,490 $955,665 10.9
 Income from operations before
 amort./deprec. 94,611 87,724 7.9
 Income from operations 69,140 64,104
 Net income after preferred
 div., before ext. chg. 25,493 8,734 191.9
 MUSICLAND STORES CORPORATION AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)
 3/31/93 3/25/92
 (in thousands)
 ASSETS
 Current assets
 Cash and cash equivalents $739 $18,478
 Inventories 274,768 219,516
 Deferred income taxes 10,250 10,200
 Other current assets 5,082 10,654
 Total current assets 290,839 258,848
 Property, net 147,022 124,305
 Goodwill 254,628 261,815
 Other assets 5,485 8,441
 Total Assets $697,974 $653,409
 LIABILITIES AND STOCKHOLDERS' EQUITY
 Current liabilities
 Current maturities of long-term debt $25,000 $130,000
 Accounts payable 149,969 124,778
 Other current liabilities 42,419 52,647
 Total current liabilities 217,388 307,425
 Long-term debt 220,541 103,541
 Other liabilities 29,528 24,466
 Deferred income taxes 8,324 9,500
 Redeemable senior preferred stock - 12,242
 Stockholders' equity
 Common stock 302 301
 Additional paid-in capital 182,649 182,185
 Retained earnings 44,215 18,722
 Common stock subscriptions (4,973) (4,973)
 Total stockholders' equity 222,193 196,235
 Total Liabilities & Stockholders' Equity $697,974 $653,409
 -0- 4/14/93
 /CONTACT: Keith Benson, 612-932-7790, or Ruth LeVine, 612-932-7700, both of Musicland/
 (MLG)


CO: Musicland Group Corporation ST: Minnesota IN: REA ENT SU: ERN

AL -- MN002 -- 5482 04/14/93 07:32 EDT
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