Blockbuster Inc. announced financial results for its second quarter ended July 4, 2010.
According to the statement, total revenues for the second quarter of 2010 were $788 million, compared to total revenues of $982 million for the same period one year ago. Net loss for the second quarter of 2010 was $69 million ($0.32/share) compared to a net loss of $37 million ($0.21 per share) in the second quarter of 2009.
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Unedited press release follows:
Blockbuster Reports Second Quarter 2010 Financial Results and Announces New Forbearance Agreement as it Continues to Engage in Productive Recapitalization Discussions
DALLAS, Aug. 13 — Blockbuster Inc. (Pink Sheets: BLOKA; BLOKB), a leading global provider of media entertainment, today announced financial results for the second quarter ended July 4, 2010. The Company also reported that it has reached agreement with certain of its senior secured noteholders on a new Forbearance Agreement as it continues to engage in productive discussions with certain of these noteholders and other strategic parties regarding various recapitalization opportunities. The new Forbearance Agreement is substantially similar to the prior forbearance agreement and is effective until September 30, 2010, unless earlier terminated in accordance with its terms. The extension of the forbearance period to September 30, 2010, provides Blockbuster with additional time and flexibility as it seeks to implement a more appropriate capital structure to support the Company’s strategies for long-term growth and enhanced financial performance.
Jim Keyes, chairman and chief executive officer of Blockbuster Inc., stated, “We appreciate the continued cooperation of our senior secured noteholders and the other parties involved in our ongoing recapitalization efforts. While making progress, this extension allows additional time to complete these complex, multiparty negotiations. To take advantage of its unique multi-channel model and revitalize its global brand, Blockbuster will require an improved capital structure. Our objective is to complete a recapitalization as soon as possible so we are better positioned to focus our attention and resources on the strategic opportunities to continue our business transformation.”
Keyes continued, “In recent months, we have enhanced Blockbuster’s competitive position by:
1. selectively advertising the availability of new releases 28 days before our largest rental competitors;
2. launching a partnership with Comcast offering our by-mail service to their customers;
3. growing Blockbuster Express to approximately 6,000 automated retail machines, deployed by NCR; and
4. expanding Blockbuster On Demand through Verizon Wireless’ Droid X by Motorola, and through select Philips and Toshiba Blu-ray players.”
Operational Update
In August, we launched a marketing partnership with Comcast covering store and by-mail channels. This partnership includes the launch of DVDs by Mail, a co-branded by-mail offer available at www.DVDsbymail.com. As part of the marketing partnership, Blockbuster is installing Comcast-dedicated kiosks in select stores that allow customers to quickly and easily learn about, and sign up for, Comcast services.
As a result of the partnership, Comcast customers now have access to Blockbuster’s DVDs by-mail service through the new co-branded Web site. On the site, customers can browse the 95,000 movies and television titles that are available on DVD and Blu-ray, create a queue of titles they want to rent and then get the DVDs through the mail or at a store, where they can also exchange their rentals. Additionally, Comcast customers now have a range of options for getting their movies and television programs. They can rent new releases the same day the titles are available in stores for purchase, in many cases a full 28 days before other entertainment providers have them. Customers also have the option of exchanging by-mail rentals at Blockbuster stores.
“This relationship gives us a cost-effective method for growing the reach and scale of our by-mail platform and leverages the power of our retail stores,” Keyes said.
In early August, Blockbuster announced the incorporation of games into its national by-mail offering. Subscribers can now select from over 3,000 games and add them to their queue, just as they would movies, at no additional charge. These available titles represent approximately 90 percent of game titles released since 2000 for Xbox, Xbox 360, PlayStation 2, PlayStation 3 and Wii.
Consolidated Second Quarter Financial Results
Total revenues for the second quarter of 2010 were $788 million, compared to total revenues of $982 million for the same period one year ago.
Net loss for the second quarter of 2010 was $69 million, or $0.32 per share, compared to a net loss of $37 million, or $0.21 per share, in the second quarter of 2009. Net loss for the second quarter was affected by the closure of company-operated stores, the decline in same-store sales, and liquidity issues including costs associated with recapitalization initiatives and lease termination costs.
Additional details regarding the Company’s second quarter 2010 results may be found in its Quarterly Report on Form 10-Q for the fiscal quarter ended July 4, 2010, filed with the Securities and Exchange Commission (“SEC”).
New Forbearance Agreement
The new Forbearance Agreement was reached with noteholders who have, collectively, represented that they hold approximately seventy percent (70%) of the Company’s 11.75 percent senior secured notes due 2014. The executing noteholders have agreed to forbear from exercising certain rights and remedies they may have under the indenture and related collateral documents arising from not receiving payments due under the senior secured notes on July 1, 2010. The forbearance period, under the new Forbearance Agreement, will expire on September 30, 2010, unless earlier terminated in accordance with its terms. The forbearance period may be extended upon written agreement by the parties.
Additional information
Additional details regarding the Company’s second quarter 2010 results may be found in its Quarterly Report on Form 10-Q for the fiscal quarter ended July 4, 2010, filed with the SEC. Information may also be found in the Company’s Annual Report on Form 10-K for the year ended January 3, 2010 and in other filings from time-to-time with the SEC.
About Blockbuster Inc.
Blockbuster Inc. is a leading global provider of rental and retail movie and game entertainment. The company provides customers with convenient access to media entertainment anywhere, any way they want it – whether in-store, by-mail, through vending kiosks or digitally to their homes and mobile devices. With a highly recognized brand and a library of more than 125,000 movie and game titles, Blockbuster leverages its multichannel presence to serve nearly 47 million global customers annually. The company may be accessed worldwide at www.blockbuster.com.