Greg Mize

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MUSIC INDUSTRY UPDATE
Fourth Quarter and Fiscal Year 2007
United States - United Kingdom - Canada
Thomas Braum Senior Vice President and Chief
Financial Officer [phone], Ext. 718
Greg Mize Vice President Investor Relations and
Treasurer [phone], Ext. 211
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United States - Fiscal Year 2007 Results
Handleman Fiscal Year 2007 Unit Sales (May
2006-April 2007) (in thousands of units)

• US music industry unit volume decreased 9.6,
  from 620.4 million units in fiscal 2006 to 561.1
  million units in fiscal 2007.
• Mass merchant sales decreased by 10.1, from
  251.8 million units in fiscal 2006 to 226.3
  million units in fiscal 2007. The mass channel
  accounted for 40.3 of total unit sales for
  fiscal 2007 a decrease of 0.3 share points from
  40.6 in 2006.
• Chain store unit volume decreased from 270.3
  million units in fiscal 2006 to 222.3 million
  units in fiscal 2007. Share of industry volume
  decreased from 43.6 in fiscal 2006 to 39.6 in
  fiscal 2007.
• Unit sales for the non-traditional channel
  (online stores, concert venues and television
  product sales) increased 35.6.
• DVD Music Video sales were 23.0 million in 2007
  down 11.4 from 2006.

Unit sales from Monday, May 1, 2006 to Sunday,
April 29, 2007.
Channel Share of Total Unit Sales FY2007
versus FY2006
2006
2007
Source Nielsen SoundScan National Summary Report
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United States - Fiscal 2007 Quarter 4 Results
Handleman Fiscal Quarter 4 Unit Sales
(Feb/Mar/Apr) (in thousands of units)

• US music industry unit volume decreased 17.3,
  from 142.7 million units in fiscal 2006 Q4 to
  118.0 million units in fiscal 2007 Q4.
• Mass merchant sales decreased by 19.9, from 57.5
  million units in fiscal 2006 Q4 to 46.1 million
  units in fiscal 2007 Q4. The mass channel
  accounted for 39.1 of total unit sales for
  fiscal 2007 Q4 a decrease of 1.2 share points
  from 40.3 in 2006 Q4.
• Chain store unit volume decreased from 59.9
  million units in fiscal 2006 Q4 to 43.9 million
  units in fiscal 2007 Q4. Share of industry
  volume decreased from 41.9 in 2006 Q4 to 37.2
  in 2007 Q4.
• Unit sales for the non-traditional channel
  (online stores, concert venues and television
  product sales) increased 26.4.
• DVD Music Video sales were 4.9 million in 2007 Q4
  down 12.7 from 2006 Q4.

Unit sales from Monday, January 29, 2007 to
Sunday, April 29, 2007.
Channel Share of Total Unit Sales FY2007 Q4
versus FY2006 Q4
Q4 2007
Q4 2006
Source Nielsen SoundScan National Summary Report
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Canada - Fiscal Year 2007 Results
Handleman Fiscal Year 2007 Unit Sales (May
2006-April 2007) (in thousands of units)

• Canada music industry unit volume decreased 6.7,
  from 48.2 million units in 2006 to 44.9 million
  units in 2007.
• Mass merchant retailers experienced an increase
  of 1.8, from 15.5 million units in fiscal 2006
  to 15.8 million units in fiscal 2007. Share of
  industry volume increased from 32.3 to 35.2.
• Retail channel sales (including chain and
  independent music retailers) decreased 11.0,
  from 32.7 million in fiscal 2006 to 29.1 million
  in fiscal 2007.

Unit sales from Monday, May 1, 2006 to Sunday,
April 29, 2007.
Channel Share of Total Unit Sales FY2007
versus FY2006
2007
2006
Source Nielsen SoundScan Canada National
Summary Report
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Canada - Fiscal 2007 Quarter 4 Results
Handleman Fiscal Quarter 4 Unit Sales
(Feb/Mar/Apr) (in thousands of units)

• Canada music industry unit volume declined 9.8
  from 9.6 million units in 2006 Q4 to 8.6 million
  units in 2007 Q4.
• Mass merchant retailers experienced a decrease of
  4.6 from 3.1 million units in fiscal 2006 Q4 to
  2.9 million units in fiscal 2007 Q4. Share of
  industry volume increased from 32.1 to 33.9.
• Retail channel sales (including chain and
  independent music retailers) decreased 12.3 from
  6.5 million in fiscal 2006 Q4 to 5.7 million in
  fiscal 2007 Q4.
• DVD Music Video sales were 0.6 million in 2007
  Q4, up 4.4 from 2006 Q4.

Unit sales from Monday, January 29, 2007 to
Sunday, April 29, 2007.
Channel Share of Total Unit Sales FY2007 Q4
versus FY2006 Q4
Q4 2007
Q4 2006
Source Nielsen SoundScan Canada National
Summary Report
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United Kingdom - Fiscal Year 2007 Results
Handleman Fiscal Year 2007 Unit Sales (May
2006-April 2007) (in thousands of units)

• UK music industry unit volume decreased 9.5,
  from 177.8 million units in fiscal 2006 to 160.8
  million units in fiscal 2007.
• Album sales declined from 159.0 million units in
  fiscal 2006 to 148.6 million units in fiscal
  2007. Single sales decreased 35.3.
• The album configuration represented 92.4 of
  total unit sales an increase from 89.4 in
  fiscal 2006. Singles represented 7.6 of total
  unit sales in fiscal 2007 down 3.0 points from
  10.6 share in 2006.
• DVD Music Video sales were 6.5 million in 2007
  down 8.4 from 2006.

Unit sales from Sunday, April 30, 2006 to
Saturday, April 28, 2007.
Configuration of Total Unit Sales - Fiscal 2007
Source CIN - The Official UK Chart Company
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United Kingdom - Fiscal 2007 Quarter 4 Results
Handleman Fiscal Quarter 4 Unit Sales
(Feb/Mar/Apr) (in thousands of units)

• UK music industry unit volume decreased 13.5,
  from 37.3 million units in fiscal 2006 Q4 to 32.3
  million units in fiscal 2007 Q4.
• Album sales decreased 10.7 from 33.6 million
  units in fiscal 2006 Q4 to 30.0 million units in
  fiscal 2007 Q4. Single sales decreased 38.7.
• The album configuration represented 92.8 of
  total unit sales an increase from 89.9 in
  fiscal 2006 Q4. Singles represented 7.2 of
  total unit sales in fiscal 2007 Q4 down 2.9
  points from 10.1 share in 2006 Q4.
• DVD Music Video sales were 0.9 million in 2007 Q4
  down 42.0 from 2006 Q4.

Unit sales from Sunday, January 28, 2007 to
Saturday, April 28, 2007.
Configuration of Total Unit Sales - Fiscal 2006
Q4
Source CIN - The Official UK Chart Company
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New Release Schedule - Fiscal 2008 Quarter 1
May Linkin Park Minutes to Midnight Gretchen
Wilson One of the Boys Maroon 5 It Wont Be
Soon Before Long R Kelly Double
Up June Rihanna Good Girl Gone Bad Toby Keith
Big Dog Daddy Brad Paisley 5th
Gear Soundtrack Hannah MontanaMeet Mylie
Cyrus Kelly Clarkson My December July Nickelba
ck All the Right Reasons Various Artists Now
25 Kidz Bop Kidz Kidz Bop 12