Movie Gallery Receives Delisting Notices21 Aug, 2007 By: Erik Gruenwedel
Troubled No. 2 video rental service, Movie Gallery, Aug. 21 said it has received two notices from National Association of Securities Dealers Automated Quotation (NASDAQ) stating it is not in compliance with filing requirements.
In separate letters dated Aug. 17, Dothan, Ala.-based Gallery was informed that its stock value had fallen below the minimum $1 per share price over a 30-day period and that it had failed to maintain a minimum $15 million market value for 30 consecutive trading days.
Gallery, with 4,550 stores, including Hollywood Video and Game Crazy, has until Feb. 11, 2008 to shore up its share price, and until Nov. 15 to re-establish the minimum market value.
Last week, Gallery extended to Aug. 27 its forbearance agreement with senior lenders. Failure to do so could have resulted in default and subsequent foreclosure proceedings.
The chain recently warned it had incurred significant losses in the second quarter (ended July 1), raising doubts it could meet its debt requirements and continue operations.
Gallery lost $325 million in the second quarter, compared to $25 million during the same period last year, according to a filing with the Securities and Exchange Commission. Revenue fell 6% to $561 million, from $601 million last year.