Blockbuster Q4: More Losses and Possible Reverse Stock Split
Blockbuster Inc.'s (NYSE:BBI) Q4 2009 results are in and they aren't pretty, a net loss of $558 for all of 2009 and the company balked on providing a guidance. A solution to keep the shares listed on the NYSE include considering a reverse stock split which will be voted upon by shareholders in May.
Blockbuster's total revenues for the fourth quarter of 2009 were $1.08 billion as compared to total revenue of $1.31 billion for the same period one year ago. Results of the fourth quarter were primarily attributable to a 14.7 percent decrease in same-store comparables, a further reduction in company-operated stores and competitive pressures.
Fourth quarter 2009 domestic same-store sales decreased 15.9 percent, reflecting rental and retail comparable decreases of 11.3 percent and 26.5 percent, respectively.
Jim Keyes, Chairman and Chief Executive Officer of Blockbuster Inc. “Increased inventory levels to support a higher in-stock availability and our investment in advertising were intended to improve top line performance; however, disappointing holiday sales due primarily to aggressive new competition and lower than expected international performance led to a shortfall in our financial results.”
Blockbuster has brought in law firm Weil, Gotshal & Manges and investment bank Rothschild Inc. to seek ways to reduce its roughly $1 billion debt load and explore other strategies, such as acquisitions or partnerships. In addition, Blockbuster has been in discussions with Hollywood Video chain owner Movie Gallery Inc.--which filed for bankruptcy protection earlier this month--about acquiring assets that might bolster the company's prospects.
Chief Executive Jim Keyes said in an interview, "We don't contemplate filing for bankruptcy."
In 2010 forget about revenue projections, the company continues to talk up closing stores and plans to copy everything Netflix (NFLX) does right and Coinstar's Red Boxes (CSTR) -- best of luck catching them.
After hours BBI shares are down 11%, now trading at 32 cents.