Movie Gallery Posts Monthly Loss15 May, 2008 By: Erik Gruenwedel
Bankrupt Movie Gallery Inc.'s seesaw battle with profitability took another red dip May 15 when it reported a consolidated net loss of nearly $50 million on revenue of more than $151 million for the period from March 10 to April 6, according to a regulatory filing.
The Dothan, Ala.-based rental chain reported consolidated net income of $5.7 million on revenue of $177.2 million for the period from Feb. 11 to March 9.
Gallery stores posted a loss of $16.6 million on revenue of $49.5 million, while subsidiary Hollywood Video lost $33.2 million on revenue of $102 million.
Gallery, which filed for Chapter 11 protection last October, expects to emerge from bankruptcy this quarter.
Separately, approval of Gallery's sale of its Movie Beam download service to Dar Capital for $2.25 million is expected following the withdrawal of objections from third-party manufacturer Dotcast Inc.
Dotcast last May filed a copyright infringement lawsuit against Gallery alleging MovieBeam violated a number of its patents.
The two companies settled in March, with Dotcast to be notified in advance of any asset sale involving MovieBeam.
Gallery shuttered MovieBeam last December, nine months after acquiring it for $10 million. The service was available in 31 major cities nationally and featured a regenerating stock of 100 movies (10 new titles per week) loaded for on-demand viewing at any given time. Rentals (for 24 hours) ranged in price from $1.99 to $4.99.
Gallery envisioned MovieBeam as a catalyst to jumpstart a nascent digital distribution channel marketed at the retail level.