CD Warehouse, Inc. Reports 96% Increase in Net Income on 46% Increase inSystem-Wide Sales
Same Store Sales Up 14% for the Quarter and, 16% Year-to-Date;
Store Count More Than Doubles
OKLAHOMA CITY, Nov. 11 /PRNewswire/ -- CD Warehouse, Inc. (Nasdaq: CDWI)
announced the Company's net income for the three months ended September 30, 1998 was $231,700 an increase of 96% above the $118,500 for the same period in 1997. For the nine months ended September 30, 1998 the Company's net income was $467,400 or $.16 per share of common stock, calculated on a fully diluted basis, an increase of 110% above the $222,800 or $.13 per share of common stock, calculated on a fully diluted basis, for the same period in 1997.
System-wide sales for the three months ended September 30, 1998 were
$13,751,800 compared to $9,395,700 for the same period in 1997, a 46%
increase. System-wide sales for the nine months ended September 30, 1998 were $37,939,500 a 51% increase over the same period in 1997.
Total revenues for the Company were $3,868,200 for the three months ended September 30, 1998, compared to $2,426,100 for 1997, an increase of 59%. For the nine months ended September 30, 1998, revenues were $9,921,100 compared to $6,318,400 for the same period in 1997, an increase of $3,602,700 or 57%.
Royalty revenue for the third quarter was $883,400 compared to $352,100 for the some period in 1997, an increase of 151%. Royalty revenue for the nine month period ended September 30, 1998 was $1,840,400 compared to $929,000 for the same period in 1997, an increase of 98%. The increase in the Company's royalty revenue is attributable to the acquisition of the Disc Go Round system
on June 26, 1998, the addition of new franchise stores and the increase in same store sales.
The increase in the Company's system-wide sales is attributable to the
development of new stores and the same store sales increases for those stores opened during the same period in 1997. The reported system-wide sales figures do not include the Disc Go Round stores acquired on June 26, 1998. Same store sales for the third quarter of 1995 increased 14% over the same period in 1997. Same store sales for the nine months ended September 30, 1998 increased 16% over the same period in 1997. Same store sales figures do not include the
Disc Go Round stores acquired on June 26, 1998.
On June 26, 1998, the Company acquired the franchise rights to 134 Disc Go Round stores and bought the assets of three Disc Go Round stores operated by its parent Company, bringing the total store count for the CD Warehouse system to 300 stores as of June 30, 1998. During the third quarter, the Company opened nine CD Warehouse and two Disc Go Round stores and closed five CD Warehouse and four Disc Go Round stores. The Company completed the quarter with a total of 302 stores in operation, compared to 128 stores at the end of the third quarter in 1997.
Jerry W. Grizzle, the Company's Chairman and CEO, stated, "Since our
acquisition of the CD Warehouse system in January of 1997, we have reported seven consecutive quarters of double digit system-wide sales increases. On a same store sales basis we have had seven consecutive quarters of comparable store sales increases with the last five consecutive quarters being double digit increase. For the nine months ended September 30, 1998, our total revenue has already exceeded the total revenue for all of 1997. Through acquisition, conversion and new store opening, we have grown from 113 stores to 302. Our next challenge is activating our Internet sales in the fourth quarter. By leading with our preowned inventory as our marketable point of
difference on the web, just as it is at the retail level, we expect to have the same competitive advantage over other Internet music marketers as we do over other traditional retail music stores."
The Company franchises and operates retail music stores in 40 states,
England, France, Guatemala, Canada and Venezuela under the name "CD Warehouse, CD Exchange and Disc Go Round." The CD Warehouse system buys, sells and trades pre-owned CDs with their customers. The CD Warehouse system sells a full complement of new release CDs and other music related items such as DVD, posters, head-phones, carrying cases and CD cleaning supplies. Many CD Warehouse system stores participate in ticket sales for concerts with promotion companies like Ticket Master and Ticket Source.
Statements made in this press release, other than those concerning
historical information, should be considered forward-looking and subject to various risks and uncertainties. Such forward-looking statements are made based on management's belief as well as assumptions made by, and information currently available to, management pursuant to the "Safe Harbor" provisions of
the Private Securities Litigation Reform Act of 1995. The Company's actual results may differ materially from the results anticipated in these forward-looking statements as a result of a variety of factors, including those contained in the Company's periodic reports filed with the Securities and Exchange Commission.
Third Quarter Ended
September 30: 1998 1997 $ change % change
System-Wide Sales $13,751,800 $9,395,700 $4,356,100 46%
Total Revenue 3,868,200 2,426,100 1,442,100 59%
Royalty Revenue 883,400 352,100 531,300 151%
Net Income 231,700 118,500 113,200 96%
Net Income per
share - basic $0.07 $0.07 $0.00 0%
Net Income per
share - diluted $0.06 $0.07 ($O.01) -14%
Shares Outstanding -
basic 3,550,550 1,820,000 1,730,550 95%
Shares Outstanding -
diluted 3,859,697 1,820,000 2,039,697 112%
Nine Months ended
September 30: 1998 1997 $ change % change
System-wide Sales $37,939,500 $25,100,900 $12,838,600 51%
Total Revenue 9,921,100 6,318,400 $3,602,700 57%
Royalty Revenue 1,840,400 929,000 $911,400 98%
Net income 467,400 222,800 $244,800 110%
Net Income per
share - basic $0.17 $0.13 $0 31%
Net income per
share - diluted $0.16 $0.13 $0 23%
Shares Outstanding -
basic 2,711,638 1,674,432 1,037,206 62%
Shares outstanding -
diluted 2,910,014 1,674,432 1,235,582 74%
Store Count 302 128 174 136%
SOURCE CD Warehouse, Inc.
CO: CD Warehouse, Inc.
ST: Oklahoma
IN: REA ENT
SU: ERN
11/11/98 11:25 EST prnewswire.com
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