Exhibit 99.1

CORPORATE OFFICES • 1600 Harbor Bay Parkway • Alameda, CA 94502 • (510) 747-6000

 
 
For more information, contact:
Jennifer Doidge
415/318-4107
doidgej@fleishman.com
 
 
Kristen Lark
510/747-6064
klark@goodguys.com

GOOD GUYS ANNOUNCES FIRST-QUARTER FINANCIAL RESULTS

     SAN FRANCISCO - June 24, 2003 — Good Guys (Nasdaq: GGUY) today announced financial results for the first fiscal quarter ended May 31, 2003.

     Good Guys reported a net loss of $8.4 million, or $0.31 per share, compared to a net loss of $4.6 million, or $0.18 per share, in the same period last year. Gross profit margin for the quarter decreased to 27.7 percent from 28.8 percent in the year-ago period, reflecting increased promotional expenses, higher sell-through of discontinued products and increased service costs. Selling, general and administrative expenses decreased by more than $6 million, but increased as a percentage of sales due to lower sales volume.

     As previously reported, comparable store sales decreased 14 percent for the quarter. Net sales for the first quarter were $143.4 million compared to $171.0 million in the same period last year. Prior-period sales included sales from five stores that were closed during 2002 as part of the company’s restructuring program. Good Guys continues to expect negative comparable store sales to continue through the first half of the fiscal year.

     “The impact of the challenging economic and promotional environment on our sales and margins kept us from taking advantage of the significant leverage our lowered cost structure is expected to provide,” said Kenneth R. Weller, chairman and chief executive officer, Good Guys. “However, our success at managing our working capital allowed us to end May with excess availability under our bank line of more than $16 million compared to $11 million at the same time last year. This improved working capital position coupled with continued cost containment efforts will help support our business and enable us to focus resources on driving sales and improving margins.”

     During the quarter, Good Guys reduced its merchandise inventory to reflect current sales volume. The company’s efforts to improve gross margin return on investment (GMROI) through SKU rationalization and more effective supply chain management are also evident in its lower inventory levels.

GOOD GUYS ANNOUNCES FIRST-QUARTER FINANCIAL RESULTS, Page 2

     Good Guys will hold a conference call today at 1:30 p.m. Pacific Daylight Time to discuss its first-quarter financial results. Interested parties are invited to listen to the call via a live webcast that can be found in the “About Good Guys” section located at www.goodguys.com. The conference call will be archived online for 30 days.

     Good Guys’ annual meeting of shareholders is scheduled for 10:00 a.m. on Thursday, June 26, 2003, at its corporate headquarters in Alameda, California. All current shareholders are invited to attend. The company’s notice of annual meeting and proxy statement can be found online via the company’s web site.

     With fiscal 2003 sales of $750 million, Good Guys, Inc. is one of the largest specialty retailers of higher-end entertainment electronics in the nation. With our differentiated product selection and friendly, knowledgeable and honest team of product specialists, Good Guys is dedicated to providing entertainment solutions to the West Coast’s early adopters and tech-savvy consumers. Founded in 1973, Good Guys operates 71 stores in California, Nevada, Washington and Oregon. For more information, visit www.goodguys.com.

     To the extent this news release contains forward-looking statements, such statements are subject to risks and uncertainties, including, but not limited to, the successful implementation of the Company’s ongoing restructuring program, increases in promotional activities of competitors, changes in consumer buying attitudes, the presence or absence of new products or product features in the Company’s merchandise categories, changes in vendor support for advertising and promotional programs, changes in the Company’s merchandise sales mix, the success of the Company’s modified advertising strategy, the outcome of the Company’s lease renegotiation and termination efforts, and economic conditions.

—tables attached—

GOOD GUYS ANNOUNCES FIRST-QUARTER FINANCIAL RESULTS, Page 3

Good Guys, Inc.
Selected Financial Data
(Unaudited)

			Three Months Ended
			May 31, 2003			May 31, 2002
	(Amounts in thousands, except per share amounts)
Net sales			$	143,352		$	171,033
Net loss				($8,412	)		($4,587	)
Net loss per common share
		Basic		($0.31	)		($0.18	)
		Diluted		($0.31	)		($0.18	)
Weighted average shares
		Basic		26,973			26,069
		Diluted		26,973			26,069

GOOD GUYS ANNOUNCES FIRST-QUARTER FINANCIAL RESULTS, Page 4

Good Guys, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)

(Amounts in thousands, except per share amounts)

		Three Months Ended
		May 31, 2003						May 31, 2002
					% of						% of
		Amount			Sales			Amount			Sales
Net sales		$	143,352			100.0		$	171,033			100.0
Cost of sales			(103,703	)		(72.3	)		(121,787	)		(71.2	)
Gross profit		$	39,649			27.7		$	49,246			28.8
Selling, general and administrative expenses		$	(44,913	)		(31.3	)	$	(50,978	)		(29.8	)
Depreciation and amortization			(2,524	)		(1.8	)		(2,903	)		(1.7	)
Store closure expenses			—			0.0			700			0.4
Loss from operations		$	(7,788	)		(5.4	)	$	(3,935	)		(2.3	)
Interest expense, net			(624	)		(0.5	)		(652	)		(0.4	)
Net loss		$	(8,412	)		(5.9	)	$	(4,587	)		(2.7	)
Net loss per common share
	Basic		($0.31	)					($0.18	)
	Diluted		($0.31	)					($0.18	)
Weighted average shares
	Basic		26,973						26,069
	Diluted		26,973						26,069

GOOD GUYS ANNOUNCES FIRST-QUARTER FINANCIAL RESULTS, Page 5

Good Guys, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)

			May 31,			May 31,			February 28,
(Amounts in thousands, except per share amounts)			2003			2002			2003
Assets
Current Assets
	Cash and equivalents		$	3,065		$	2,014		$	733
	Accounts receivable, net			15,994			26,696			16,324
	Merchandise inventories			96,888			106,334			100,867
	Prepaid expenses			9,598			7,094			9,794
		Total current assets	$	125,545		$	142,138		$	127,718
Property and Equipment
	Leasehold improvements		$	66,390		$	66,078		$	66,179
	Furniture, fixtures, and equipment			77,548			74,024			77,034
	Construction in progress			972			427			942
	Total property and equipment, at cost			144,910			140,529			144,155
	Less accumulated depreciation and amortization			(104,775	)		(94,260	)		(102,154	)
		Property and equipment, net		40,135			46,269			42,001
Other Assets				83			609			686
		Total assets	$	165,763		$	189,016		$	170,405
Liabilities and Shareholders’ Equity
Current liabilities
	Accounts payable		$	37,686		$	60,968		$	25,601
	Accrued expenses and other liabilities:
	Payroll			7,631			10,504			7,418
	Sales taxes			3,573			4,405			3,401
	Store closure			5,530			10,410			6,297
	Extended service plan			2,176			3,154			288
	Other			18,842			14,606			16,230
		Total current liabilities	$	75,438		$	104,047		$	59,235
Revolving Credit Debt				37,399			30,009			50,099
Shareholders’ Equity
	Common stock, $.001 par value:
	Issued and outstanding			27			26			27
	Additional paid-in capital			111,685			110,945			111,418
	Retained deficit			(58,786	)		(56,011	)		(50,374	)
		Total shareholders’ equity		52,926			54,960			61,071
		Total liabilities and shareholders’ equity	$	165,763		$	189,016		$	170,405

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