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To: Jenna who wrote (37076)	4/28/1999 7:27:00 PM
From: Jenna	Respond to of 120523

Hollywood Entertainment's First-Quarter Net Income Increases 92%, Excluding Reel.Com; Same Store Sales Rise 18%; Reel.com Revenue Increases 530% PORTLAND, Ore., April 28 /PRNewswire/ -- Hollywood Entertainment Corporation (Nasdaq: HLYW - news), owner of the Hollywood Video chain of video superstores and Reel.com, a leading Internet entertainment site, today announced financial results for the first quarter ending March 31, 1999. Excluding Reel.com, the Company reported net revenue in its Hollywood Video unit of $260.2 million compared to $170.0 million in the first quarter of 1998, an increase of 53%. Net income was $14.8 million versus $7.7 million in 1998, up 92%, excluding Reel.com and before a cumulative effect of a change in accounting principle of $1.4 million net of tax, as required by the new SOP 98-5. Diluted earnings per share (excluding Reel.com and before the cumulative effect charge) were $0.31 for the first quarter of 1999 compared to $0.21 for the first quarter of 1998. Adjusted EBITDA for the Hollywood Video unit increased 68 percent to $45.4 million compared to $27.0 million a year ago. Revenue from rentals increased 56% to $220.9 million, and revenue from product sales was up 37% to $39.3 million. Total same store sales increased 18% on a year-to-year basis; rental same store sales increased by 20%. Results for the quarter were driven by strong growth in same store sales and improvements in store level operations, which also significantly benefited operating income margins. Same store sales were helped by the Company's revenue-sharing agreements with movie studios which have enabled Hollywood Video to increase the availability of movies for customers, which is increasing customer demand, satisfaction, and loyalty. Additionally, the Company added 62 new stores in the first quarter and, as of March 31st, had a total of 1,322 video superstores in 43 states. This expansion is continuing at the pace of approximately one new store per day. Mark Wattles, Chairman, CEO and founder of Hollywood Entertainment said, ''We are extremely pleased with the momentum of our business. Our strong growth is a direct result of our increasing ability to satisfy consumers through the greater availability of hit titles made possible by revenue sharing with studios. ''We plan to continue to build Hollywood Video and Reel.com as brands that customers associate with the delivery of the finest quality entertainment whether in retail stores or over the Internet,'' Mr. Wattles added. ''Our future growth will continue to be based on achieving higher and higher levels of customer satisfaction.