By : Erik Gruenwedel | Posted: 29 Dec 2010
Reorganization costs continue to extract a heavy toll on Blockbuster Inc.’s bottom line as the bankrupt rental service reported a net loss of $42.1 million for the four-week period ended Nov. 28, according to a court filing.
Dallas-based Blockbuster has lost $78.6 million since filing for bankruptcy Sept. 23, citing liabilities of more than $1.4 billion.
During the four-week period, Blockbuster generated $142.6 million in revenue, which included $98 million in base rental revenue, $18.8 million in previously-rented product revenue, $22.4 million in merchandise revenue and $3.4 million in other revenue.
A silver lining in the unaudited results is the fact Blockbuster “only” posted a loss of $16 million from continuing operations when not factoring in reorganization costs and taxes ($20.1 million).
General and administrative costs, which include operating more than 2,400 stores and corporate headquarters and executive salaries, topped $83.8 million during the period, and exceeded gross profit ($83.5 million) by $300,000. Since filing for bankruptcy, Blockbuster has generated $195.6 million in gross profit and $198.9 million in G&A expenses.
The company — which is aiming to operate a business model predicated on Blockbuster By Mail, Blockbuster On Demand, Blockbuster Express kiosks and a reduced retail footprint — announced recently that it would shutter an additional 186 stores.
Blockbuster borrowed $53.8 million from its debtor-in-possession financing agreement in November and paid back $30.5 million.