Electronics Boutique Announces Third Quarter Financial Results

Electronics Boutique Announces Third Quarter Financial Results
Total Revenue Increases 37.4% to $446 Million; EPS Rises Significantly to $0.30



WEST CHESTER, Pa., Nov. 18  /PRNewswire-FirstCall/ -- Electronics Boutique
Holdings Corp. (NASDAQ:ELBO), the leading global specialty retailer of video
games and related products, today announced financial results for the third
quarter and nine months ended October 30, 2004.

Financial Results

In line with previously announced expectations, total revenue for the third
quarter of fiscal 2005 increased 37.4% to $446.0 million from $324.7 million in
the same period last year.  Top line growth resulted from a 35% increase in
video game software sales.  Comparable store sales increased 13.8%, versus a
decline of 6.5% last year, driven by broad-based strength in all categories and
across all geographic regions.  Net income for the quarter increased to $7.3
million, or $0.30 per diluted share, compared to net income of $1.5 million, or
$0.06 per diluted share, in the same period last year.

Commenting on third quarter results, Jeffrey Griffiths, President and Chief
Executive Officer, stated, "We are very pleased to report impressive third
quarter results that again outperformed the industry as a whole.  We
significantly expanded both our top and bottom lines, highlighting the strong
performance that can be generated when our business model is complemented by a
positive industry environment.  We demonstrated gains across all areas of our
business.  These gains were fueled in part by better than anticipated new
release performance as well as the early launch of Sony's new PlayStation 2
model.  In addition, we continued to make progress on our initiatives to grow
our higher-margin pre-played category and international business."

During the quarter, the Company opened a record 140 new stores, increasing the
total store count to 1,869 as of October 30, 2004.  The Company operated 1,436
stores at the end of the third quarter of fiscal 2004.

For the first nine months of fiscal 2005, total revenue increased 26.9% to
$1,180.4 million from $930.3 million in the prior-year period.  Net income
increased 125% to $14.2 million, or $0.58 per diluted share, from $6.3 million,
or $0.25 per diluted share, last year.

Current Company Outlook

As recently announced, based on the better than anticipated year to date
performance and current industry visibility, the Company expects fourth quarter
revenue to increase between 18% and 21%, driven by a comparable store sales
increase of 4% to 6%, and diluted earnings per share in the range of $1.62 to
$1.72.  This translates to a total annual revenue increase in the range of 23%
to 25% and annual earnings between $2.20 and $2.30 per diluted share.

Mr. Griffiths concluded, "As we enter the holiday selling season, we are
confident in our market position and our ability to achieve our strategic
objectives.  We anticipate a continuation of the positive trends we experienced
in the third quarter.  Additionally, we are very encouraged by the state of the
industry especially given the strong lineup of new releases, led by Microsoft's
Halo 2 and Take Two's Grand Theft Auto: San Andreas, as well as the launch of
the Nintendo DS in the portable gaming category next week."

Conference Call Information

The Company will host an investor conference call today at 5 p.m. Eastern to
review its financial results.  The call will be open to all interested
investors through a simultaneous Internet broadcast at
http://www.ebholdings.com/, and it will be archived for two weeks on the
website.  A recording of the call will also be available at 8 p.m. Eastern on
November 18, 2004 through midnight on November 25, 2004.  Listeners should call
[phone] (domestic) or [phone] (international), and use access
code 2083653.

About Electronics Boutique Holdings Corp.

Electronics Boutique, a Fortune 1000 company, is the leading global specialty
retailer dedicated exclusively to video game hardware and software, PC
entertainment software, accessories and related products.  As of October 30,
2004, the company operated 1,869 stores in the United States, Australia,
Canada, Denmark, Germany, Italy, New Zealand, Norway, Puerto Rico and Sweden --
primarily under the names EB Games and Electronics Boutique. The company
operates an e-commerce website at http://www.ebgames.com/. Additional company
information is available at http://www.ebholdings.com/.

This release contains forward-looking statements, including statements by
Jeffrey Griffiths and those related to the financial performance of Electronics
Boutique for the fourth quarter and full fiscal year ending January 29, 2005,
to projected sales and consumer demand for the balance of the fiscal year, and
to the outlook for the video game industry in general. Forward-looking
statements refer to expectations, projections and other characterizations of
future events or circumstances and are often identified by the use of words
such as "may," "will," "expect," "believe," "anticipate," "intend," "could,"
"estimated," "continue" or comparable terminology.  In addition to factors
specified in Electronics Boutique's recent filings with the Securities and
Exchange Commission, there are other factors that could cause actual results to
materially differ from those expressed or implied in these forward-looking
statements, such as the schedule and sell-through for new software releases,
consumer demand for video game hardware and software, the timing of the
introduction of new generation hardware systems, pricing changes by key vendors
for hardware and software and the timing of any such changes, the adequacy of
supplies of new and pre-played product, increased competition and promotional
activity from other retailers, and the availability of locations for, and
timing of the opening of, new stores.  In light of the risks and uncertainties
inherent in the forward-looking statements, these statements should not be
regarded as a representation by Electronics Boutique or any other person that
the projected results, objectives or plans will be achieved.  Electronics
Boutique undertakes no obligation to revise or update the forward-looking
statements to reflect events or circumstances after the date hereof.

                   Electronics Boutique Holdings Corp.
              Consolidated Statements of Income (unaudited)
             (Amounts in thousands, except per-share amounts)

                                     13 Weeks Ended       39 Weeks Ended
                                   Oct. 30,   Nov. 1,    Oct. 30,   Nov. 1,
                                     2004      2003       2004       2003

  Net sales                        $444,582  $323,146  $1,176,033  $925,541
  Management fees                     1,465     1,570       4,384     4,722
  Total revenues                    446,047   324,716   1,180,417   930,263

  Cost of goods sold                322,788   235,538     848,244   678,420

  Gross profit                      123,259    89,178     332,173   251,843

  Costs and expenses:
  Selling, general and
   administrative expense           102,926    80,046     285,279   222,884
  Depreciation and amortization       9,238     7,040      25,629    19,967

  Operating income                   11,095     2,092      21,265     8,992
  Interest income, net                  483       276       1,319     1,115

  Income before income tax expense   11,578     2,368      22,584    10,107
  Income tax expense                  4,289       886       8,365     3,783

  Net income                         $7,289    $1,482     $14,219    $6,324


  Net income per share:
  Basic                               $0.31     $0.06       $0.59     $0.25
  Diluted                             $0.30     $0.06       $0.58     $0.25


  Weighted average shares outstanding:
  Basic                              23,892    24,742      24,086    25,203
  Diluted                            24,297    25,243      24,462    25,502



                   Electronics Boutique Holdings Corp.
                 Selected Consolidated Balance Sheet Data
                          (Amounts in thousands)

                                          Oct. 30,     Nov. 1,    Jan. 31,
                                            2004        2003        2004
                                        (unaudited) (unaudited)   (audited)


  Cash and cash equivalents                $71,485     $72,924     $157,968

  Merchandise inventories                  339,979     258,607      253,577

  Total current assets                     459,455     382,604      477,687

  Total assets                             655,047     536,250      636,375


  Accounts payable                         250,787     206,967      220,481

  Total current liabilities                340,870     260,788      311,679

  Total liabilities                        359,751     273,885      332,395

  Total stockholders' equity               295,296     262,365      303,980


                                Schedule 1
                   Electronics Boutique Holdings Corp.
                        Domestic Retail Sales Mix

                                         13 Weeks Ended    13 Weeks Ended
                                            Oct. 30,           Nov. 1,
                                              2004              2003

  Video Game Software                          64%               61%
  Video Game Hardware                          14%               16%
  PC Software                                   9%               11%
  Accessories                                   9%                9%
  Other                                         4%                3%


DATASOURCE: Electronics Boutique Holdings Corp.



CONTACT:  James A. Smith, Chief Financial Officer of Electronics Boutique

Holdings Corp., [phone]; or Financial Dynamics: Investors - Cara

O'Brien/Melissa Myron, or Media - Melissa Merrill, [phone]



Web site:  http://www.ebholdings.com/

http://www.ebgames.com/ 

Copyright