Digging around ELBO's 10-K to get a handle on the carring cost of their ownership in electronics boutiques PLC turned up the following.
See note 8 following comparative list of assets, it indicates The
investment in Electronics Boutique Plc was retained by a predecessor company
Mad2
Ownership
.
As of April 1, 1999, the Company had approximately 31 shareholders of record
(including Cede & Co., the nominee for Depository Trust Company, a registered
clearing agency) of the 20,169,200 outstanding shares of the Company's Common
Stock. On April 1, 1999, the last reported sale price for the Company's common
stock as quoted by NASDAQ was $14.00 per share.
EB PLC
. Equity in earnings of affiliates decreased by $3.1 million from earnings of
$2.9 million in fiscal 1998 to a loss of $0.2 million in fiscal 1999. The
decrease was attributable to the reorganization of the Company in conjunction
with its initial public offering pursuant to which EB retained the 25.1%
investment in EB-UK. The loss of $0.2 million in fiscal 1999 was attributable to
this investment and was recorded prior to the July 1998 reorganization. There
will be no future equity income or loss on this investment.
earnings from affiliates
Equity in earnings of affiliates increased by $3.5 million from a loss of
$0.6 million in fiscal 1997 to earnings of $2.9 million in fiscal 1998. The
increase was attributable to a $3.2 million increase in equity income recorded
for the Company's 25.1% investment in EB-UK. and the effect of consolidating the
Company's equity interests in Canada and Korea beginning in fiscal 1998.
ELECTRONICS BOUTIQUE HOLDINGS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS<TABLE><CAPTION>
JANUARY 31, JANUARY 30,
Assets 1998 1999
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<S> <C> <C>
Current assets:
Cash and cash equivalents $ 20,639,610 $ 42,006,179
Accounts receivable:
Trade and vendors 2,618,382 4,010,293
Other 1,754,691 1,516,085
Due from affiliates (note 8 ) 2,890,554 984,096
Merchandise inventories 52,973,314 65,433,008
Deferred tax asset (note 13) - 2,694,000
Prepaid expenses 2,837,647 969,949
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Total current assets 83,714,198 117,613,610
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Property and equipment:
Leasehold improvements 40,226,726 46,933,403
Fixtures and equipment 24,884,217 32,362,909
Building 6,200,950 -
Land 632,806 -
Construction in progress 556,663 1,087,964
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72,501,362 80,384,276
Less accumulated depreciation and amortization 32,535,305 37,349,298
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Net property and equipment 39,966,057 43,034,978
Investment in affiliated company (note 8 ) 11,025,345 -
Goodwill and other intangible assets, net of accumulated amortization
of $120,151 and $482,961 as of January 31, 1998 and January 30, 1999 2,190,766 1,898,395
Deferred tax asset (note 13) - 6,319,000
Other assets 5,894,374 3,181,566
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Total assets (note 4) $ 142,790,740 $ 172,047,549
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(8) INVESTMENT IN AFFILIATED COMPANY
In fiscal 1996, the EB Group acquired 25 percent of the outstanding shares
of Electronics Boutique Plc (formerly Rhino Group Plc). The EB Group accounted
for the investment in Electronics Boutique Plc under the equity method, which
requires the EB Group to recognize goodwill and 25 percent of the results of
operations of Electronics Boutique Plc from the date of acquisition in fiscal
1996.
The goodwill has been amortized over the expected period of benefit of 10
years. The $3,200,000 of goodwill from this transaction resulted in amortization
expense of $321,000 in each of fiscal 1997 and fiscal 1998, and $161,000 in
fiscal 1999. The carrying value of the investment exceeded the EB Group's 25
percent share of the underlying net assets of Electronics Boutique Plc by the
amount of goodwill.
At January 31, 1998 the fair market value of the investment was $52,615,000
based on the closing market price quotation of the London Stock Exchange. The
investment in Electronics Boutique Plc was retained by a predecessor company
prior to completion of the initial public offering by the Company in July, 1998. |
