Guitar Center 8-K Guitar Center, Inc. Announces First Quarter 2007 Results

Exhibit 99.2

GUITAR CENTER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

	March 31, 2007		December 31, 2006
Assets
Current assets:
Cash and cash equivalents	$	13,879	$	15,153
Accounts receivable, net		50,899		53,916
Merchandise inventories		609,356		578,082
Prepaid expenses and other current assets		17,138		16,178
Deferred income taxes		22,203		22,739
Total current assets		713,475		686,068
Property and equipment, net		212,329		201,986
Goodwill		20,067		18,507
Intangible assets, net		7,907		7,612
Other assets, net		13,460		13,305
Total assets	$	967,238	$	927,478
Liabilities and stockholders’ equity
Current liabilities:
Cash overdraft	$	18,467	$	20,243
Accounts payable		113,042		93,717
Accrued expenses and other current liabilities		84,756		117,595
Merchandise advances		24,877		26,830
Borrowings under revolving line of credit		135,000		101,144
Total current liabilities		376,142		359,529
Other long-term liabilities		18,701		17,292
Deferred income taxes		4,671		5,165
Long-term debt		1,064		1,416
Total liabilities		400,578		383,402
Minority interest		1,209		1,339
Stockholders’ equity:
Preferred stock		—		—
Common stock		295		295
Additional paid-in capital		469,706		464,217
Retained earnings		95,450		78,225
Total stockholders’ equity		565,451		542,737
Total liabilities and stockholders’ equity	$	967,238	$	927,478

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GUITAR CENTER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

	Three months ended March 31,
	2007			2006
Net sales	$	534,483		$	470,747
Cost of goods sold, buying and occupancy		380,107			334,241
Gross profit		154,376			136,506
Selling, general and administrative expenses		124,037			109,114
Operating income		30,339			27,392
Interest expense, net		1,793			1,852
Income before income taxes		28,546			25,540
Income taxes		11,419			9,833
Minority interest in loss		(98	)		—
Net income	$	17,225		$	15,707
Net income per share:
Basic	$	0.58		$	0.60
Diluted	$	0.57		$	0.55
Weighted average shares outstanding:
Basic		29,507			26,176
Diluted		30,165			29,863

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