April 09, 2009 -
DALLAS -- Blockbuster Inc. stated in a U.S. Securities and Exchange Committee filing Monday it may close all of its 7,400 retail locations globally.
The movie rental company said it has "substantial doubt" about continuing as a "going concern," meaning it could be forced to liquidate its assets, according to a report by PC World. Blockbuster did not respond to a request for comment by CSNews Online as of press time.
On April 3, Blockbuster announced an agreement with JP Morgan and a group of lenders, led by Monarch Alternative Capital LP and Silver Point Capital, L.P., for a $250 million revolving loan refinancing with a maturity date on Sept. 30, 2010.
In its fourth-quarter and fiscal year report March 19, Blockbuster noted domestic same-store sales increased 6.4 percent and domestic same-store rental revenues increased 1.2 percent. Same-store retail revenues increased 37.4 percent.
"Domestic rental and retail comparables were both positive for the first time in eight years," the company noted in a statement.
However, due to a non-cash charge related to the impairment of goodwill "and other long-lived assets," the company reported a full year net loss of $374.1 million. Adjusted net income was $79.3 million.
"Our 2008 full-year results demonstrate the viability of our core rental offering and underscore the progress we made to diversify Blockbuster into a multi-channel provider of media entertainment," stated Jim Keyes, Chairman and CEO.
"In 2009, we will continue our diversification efforts, especially through digital alliances that leverage our brand equity. However, in light of market conditions, we will adopt a more conservative approach with regard to our capital-intensive initiatives, and, as a result, expect lower revenue comparables, but strong EBITDA."
On top of the recent loan agreement, Blockbuster already has $780.9 million debt, the PC World report noted.
Blockbuster has strong competition from NetFlix, which posed a fourth-quarter profit. NetFlix does not have retail store overhead expenses, PC World noted.
This year is special for Convenience Store News, as it marks the 40th year of publication, making it the longest continuously published news source for the convenience store industry.
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