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Movie Gallery Lost $38.9M in Q1 2008

By Erik Gruenwedel | Posted: 15 Jan 2009

Movie Gallery Inc. reported a net loss of $38.9 million on revenue of $555 million for the period from Jan. 6, 2008 to April 6, 2008 — the last quarterly period before it emerged from Chapter 11 bankruptcy protection May 20, according to Jan. 8, 2009 filing.

The Wilsonville, Ore.-based No. 2 DVD rental chain, which includes Hollywood Video, reported a net loss of $14.8 million on revenue of $647 million during the prior-year period ended April 1, 2007.

Gallery issued the statement as the first of sequential belated quarterly reports required of publicly traded companies by the Securities and Exchange Commission. Last month, the company said it would not be able to file quarterly financial results for the period ended Oct. 8, 2008.

In the statement Gallery reported $414.6 million in movie and video game rental revenue, and $141 million in sales revenue.

Same-store Gallery revenue declined 10.1%, compared to a 16.4% comp-store decline for Hollywood Video and Game Crazy locations open at least 12 months.

Gallery executives cited market saturation of DVD titles, emergence of online subscription and DVD-rental kiosks, and slow adoption of Blu-ray for the decline.

The chain ended the period with $1.2 billion in outstanding debt, which included $611 million first-lien credit facility, $190 million second-lien credit facility and $85 million debtor-in-possession loan, among other obligations.

It operated 3,485 Gallery, Hollywood Video and Game Crazy in-store locations during the period.

As of Jan. 4, 2009, Gallery said it had $30 million in available cash and $40 million in a revolving credit facility.


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