Blockbuster Posts Wider Q2 Loss, Avoids Bankruptcy – For Now13 Aug, 2010 By: Erik Gruenwedel
In the end, Blockbuster’s delayed second quarter (ended July 4) fiscal results hardly seemed worth the wait.
The Dallas-based rental chain, which canceled an Aug. 12 call with analysts and then postponed disclosing results nearly 19 hours, reported a loss of $69 million compared with a loss of $37 million during the previous-year period.
Blockbuster cited ongoing store closures, decline in same-store sales, liquidity issues and cost associated with recapitalization efforts for the loss. Revenue fell $194 million to $788 million from $982 million last year, well below Wall Street expectations.
If there was a silver lining, Blockbuster said it received another extension, until Sept. 30, of a forbearance agreement postponing payment of a $42.4 million interest payment.
“We appreciate the continued cooperation of our senior secured noteholders and the other parties involved in our ongoing recapitalization efforts,” said CEO Jim Keyes, in a statement. “While making progress, this extension allows additional time to complete these complex, multiparty negotiations.”
Still, Blockbuster warned in its Aug. 13 quarterly filing with the Securities and Exchange Commission that, in addition to a Chapter 11 bankruptcy, Chapter 7 liquidation is a possibility if sufficient debtor-in-possession financing is not available.