Markets
BUSINESS NEWS
- Market News
- Earnings
- Recalls
- Recession Watch
- Tech News
- Financial Crisis
- Madoff Scandal
- DailyFinance
- BloggingStocks
- Luxist
- Money Videos
- Money RSS Feeds
INVESTING
- Stock Quotes
- Stock Charts
- Stock Ticker
- Currencies
- Portfolio
- Stock Screener
- Broker Center
- Mutual Fund Center
- ETF Center
- Money
- 24/7 Wall St.
- Financial Glossary
PERSONAL FINANCE AT WALLETPOP
- Bargains
- Banking
- Budget
- Calculators
- College Finance
- Community
- Credit
- Deals
- Debt
- Economizer
- Food
- Home
- Fraud
- Insurance
- Interest Rates
- Loans
- Mortgages
- Real Estate
- Recalls
- Recession
- Retirement
- Saving
- Simplification
- Specials
- Taxes
SMALL BUSINESS
Blockbuster Reports Fourth Quarter and Fiscal-Year 2008 Financial Results
Company Reports Progress on Refinancing
Full-Year Financial Highlights
- Refinancing of existing revolving credit facility under way
- Domestic same-store sales increased 6.4 percent; domestic same-store rental revenues increased 1.2 percent and same-store retail revenues increased 37.4 percent
- Domestic rental and retail comparables were both positive for the first time in eight years
- 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 - Year-over-year adjusted EBITDA increased 77.3 percent to
$319.1 million , exceeding company's guidance
"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
Consolidated Fourth Quarter Financial Results
Total revenues were
Gross profit for the fourth quarter of 2008 was
Operating expenses for the fourth quarter were
Fourth quarter 2008 earnings before interest, taxes, depreciation and amortization ("EBITDA") was
Net loss was
Blockbuster ended the fourth quarter of 2008 with
Consolidated Fiscal-Year 2008 Financial Results
Total revenues for the full year 2008 were
For the full year 2008, operating expenses totaled
Net loss for the full year was
Additional financial and operational information, including the calculation of adjusted results and the reconciliations of other non-GAAP financial measures used herein, may be found in the tables accompanying this news release.
Same-Store Sales
Blockbuster recorded its fourth consecutive quarter of positive domestic same-store sales in the fourth quarter of 2008. For the fourth quarter, domestic same-store sales increased 4.4 percent, representing a 5.3 percent increase when compared to a decline of 0.9 percent in the same period in 2007. The increase in same-store sales for the fourth quarter of 2008 was comprised of a 2.6 percent decrease in domestic same-store rental comparables and a 36.5 percent increase in domestic same-store retail comparables, which was largely driven by increased sales of games, game merchandise and consumer electronics. International same-store sales increased 2.8 percent, reflecting a 5.9 percent decline in same-store rental comparables and a 10.1 percent increase in same-store retail comparables. Worldwide same-store sales increased 3.7 percent.
For the full year of 2008, Blockbuster achieved a 6.4 percent increase in domestic same-store sales, compared to a decrease of 6.9 percent in 2007. The 2008 domestic same-store comparable includes a 1.2 percent increase in domestic same-store rental comparables and a 37.4 percent increase in domestic same-store retail comparables. International same-store sales decreased 0.4 percent, reflecting a 2.8 percent decline in same-store rental comparables and a 2.4 percent increase in same-store retail comparables. Worldwide same-store sales for the full year of 2008 increased 3.9 percent.
Refinancing Update
Mr. Keyes further commented, "We are pleased to report that we have reached agreements with JPMorgan Chase Bank and two of the largest lenders under our existing revolving credit facility to amend and extend the revolving credit facility through
"We believe that the support of our lenders during these challenging times demonstrates their confidence in the company and our commitment to transform Blockbuster into a source for multi-media entertainment. We will be initiating conversations with our other lenders and are optimistic about those future conversations. We have dedicated considerable effort and resources to achieving workable financing solutions in a difficult capital market, and we are grateful to our lenders for their willingness to engage in productive discussions. As a result of the focus on refinancing efforts, we expect to file our Annual Report on Form 10-K for 2008 no later than
Mr. Keyes concluded, "It is likely that our financial statements and our auditors' report will include reference to going concern risks until our financing is complete and liquidity assured. We intend to achieve an amendment and extension of the existing revolving credit facility and other arrangements that we believe will provide us with adequate liquidity."
The Company expects to file with the SEC on or before
2009 Outlook
"In the fourth quarter the company generated strong cash flow from operations before working capital, resulting in free cash flow of
Mr. Casey continued, "We remain cognizant of the constrained capital markets and our needs to reduce costs and maximize cash flow. As a result, we intend to further reduce G&A by over
The Company will provide business updates and a more detailed review of its 2008 financial information in conjunction with the conference call previously announced and referenced below.
Fourth Quarter and Fiscal Year 2008 Financial Results Web Cast and Conference Call
Blockbuster will host a conference call today,
Forward Looking Statements
This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may also be included from time to time in our other public filings, press releases, our website and oral and written presentations by management. Specific forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and include, without limitation, words such as "may," "will," "expects," "believes," "anticipates," "plans," "estimates," "projects," "predicts," "targets," "seeks," "could," "intends," "foresees" or the negative of such terms or other variations on such terms or comparable terminology. Similarly, statements that describe our strategies, initiatives, objectives, plans or goals are forward-looking. These forward-looking statements are based on management's current intent, belief, expectations, estimates and projections. These statements are not guarantees of future performance and involve risks, uncertainties, assumptions and other factors that are difficult to predict. Therefore, actual results may vary materially from what is expressed in or indicated by the forward-looking statements. The risk factors set forth under "Item 1A. Risk Factors" in our Annual Reports on Form 10-K and other matters discussed from time to time in our filings with the Securities and Exchange Commission, including the "Disclosure Regarding Forward-Looking Information" and "Risk Factors" sections of our Quarterly Reports on Form 10-Q, among others, could affect future results, causing these results to differ materially from those expressed in our forward-looking statements. Currently, the risks and uncertainties that may most directly impact our future results include (i) our impending debt maturities and whether or not our efforts to refinance this debt are successful; (ii) whether or not we are able to otherwise improve our liquidity position by managing cash and minimizing our need for external capital; and (iii) whether or not we will receive a going concern opinion from our independent registered public accounting firm, which if not cured or waived, could result in a default under our credit agreement and in the acceleration of the outstanding debt thereunder and under other of our debt agreements and certain of our leases. In the event that the risks disclosed in our public filings and those discussed above cause results to differ materially from those expressed in our forward-looking statements, our business, financial condition, results of operations or liquidity could be materially adversely affected and investors in our securities could lose part or all of their investments. Accordingly, our investors are cautioned not to place undue reliance on these forward-looking statements because, while we believe the assumptions on which the forward-looking statements are based are reasonable, there can be no assurance that these forward-looking statements will prove to be accurate. Further, the forward-looking statements included in this release and those included from time to time in our other public filings, press releases, our website and oral and written presentations by management are only made as of the respective dates thereof. We undertake no obligation to update publicly any forward-looking statement in this release or in other documents, our website or oral statements for any reason, even if new information becomes available or other events occur in the future.
About Blockbuster
Blockbuster Inc. is a leading global provider of in-home movie and game entertainment, with over 7,400 stores throughout the Americas,
Financial Tables to Follow
BLOCKBUSTER INC.
COMPARATIVE FINANCIAL HIGHLIGHTS
(In millions, except per share amounts)
Fiscal Quarter Fiscal Year
Ended Ended
-------------- -----------
January 4, January 6, January 4, January 6,
2009 2008 2009 2008
---------- ---------- ---------- ----------
Revenues:
Base rental revenues $773.4 $931.8 $3,238.5 $3,426.2
Previously rented
product ("PRP")
revenues 143.9 171.4 627.3 656.3
----- ----- ----- -----
Total rental revenues 917.3 1,103.2 3,865.8 4,082.5
Merchandise sales 457.9 455.1 1,389.4 1,400.1
Other revenues 9.5 8.8 32.7 59.8
---- ---- ---- ----
1,384.7 1,567.1 5,287.9 5,542.4
------- ------- ------- -------
Cost of sales:
Cost of rental revenues 329.7 410.0 1,467.0 1,604.0
Cost of merchandise sold 372.7 360.0 1,098.4 1,073.8
----- ----- ------- -------
702.4 770.0 2,565.4 2,677.8
----- ----- ------- -------
Gross profit 682.3 797.1 2,722.5 2,864.6
----- ----- ------- -------
Operating expenses:
General and administrative 524.2 642.9 2,306.6 2,525.1
Advertising 27.2 35.1 122.0 194.0
Depreciation and
intangible amortization 37.3 43.7 152.2 185.7
Impairment of goodwill
and other long-lived
assets 435.0 2.2 435.0 2.2
Gain on sale of
Gamestation - - - (81.5)
--- --- --- -----
1,023.7 723.9 3,015.8 2,825.5
------- ----- ------- -------
Operating income (loss) (341.4) 73.2 (293.3) 39.1
Interest expense (17.5) (23.3) (73.0) (88.7)
Interest income 0.3 1.4 2.5 6.5
Other items, net 9.5 - 15.6 (1.5)
--- --- ---- ----
Income (loss) from
continuing operations
before income taxes (349.1) 51.3 (348.2) (44.6)
Provision for income
taxes (10.7) (9.4) (25.6) (29.6)
----- ---- ----- -----
Income (loss) from
continuing operations (359.8) 41.9 (373.8) (74.2)
Income (loss) from
discontinued
operations,
net of tax - (0.9) (0.3) 0.4
--- ---- ---- ---
Net income (loss) (359.8) 41.0 (374.1) (73.8)
Preferred stock
dividends (2.9) (2.9) (11.3) (11.3)
---- ---- ----- -----
Net income (loss)
applicable to
common stockholders $(362.7) $38.1 $(385.4) $(85.1)
======= ===== ======= ======
Net income (loss)
per common share:
Basic
Continuing operations $(1.89) $0.20 $(2.01) $(0.45)
Discontinued operations - - - -
--- --- --- ---
Net income (loss) $(1.89) $0.20 $(2.01) $(0.45)
====== ===== ====== ======
Weighted average
common shares
outstanding:
Basic 192.1 191.1 191.8 190.3
===== ===== ===== =====
Net income (loss)
per common share:
Diluted
Continuing operations $(1.89) $0.19 $(2.01) $(0.45)
Discontinued operations - (0.01) - -
--- ----- --- ---
Net income (loss) $(1.89) $0.18 $(2.01) $(0.45)
====== ===== ====== ======
Weighted average
common shares
outstanding:
Diluted 192.1 221.7 191.8 190.3
===== ===== ===== =====
BLOCKBUSTER INC.
SUPPLEMENTAL FINANCIAL INFORMATION
(Dollars in millions)
Revenues by Product Line:
Fiscal Quarter Fiscal Quarter
Ended Ended
January 4, 2009 January 6, 2008
--------------- ---------------
Percent Percent
Revenues of Total Revenues of Total
-------- -------- -------- --------
Domestic
--------
Rental revenues
Movies $551.8 59.7% $645.0 64.7%
Games 62.3 6.7% 59.5 6.0%
PRP 116.1 12.6% 135.0 13.5%
----- ---- ----- ----
Total rental
revenues 730.2 79.0% 839.5 84.2%
----- ---- ----- ----
Merchandise sales
Movies 79.3 8.6% 81.6 8.2%
Games 54.1 5.8% 19.3 1.9%
Other 55.7 6.0% 50.7 5.1%
---- --- ---- ---
Total merchandise
sales 189.1 20.4% 151.6 15.2%
----- ---- ----- ----
Other revenues 5.7 0.6% 6.1 0.6%
------ ----- ------ -----
Total domestic revenues $925.0 100.0% $997.2 100.0%
====== ===== ====== =====
International
-------------
Rental revenues
Movies $144.5 31.5% $209.0 36.6%
Games 14.8 3.2% 18.3 3.2%
PRP 27.8 6.0% 36.4 6.4%
---- --- ---- ---
Total rental revenues 187.1 40.7% 263.7 46.2%
----- ---- ----- ----
Merchandise sales
Movies 62.4 13.6% 80.2 14.1%
Games 159.4 34.7% 169.3 29.7%
Other 47.0 10.2% 54.0 9.5%
---- ---- ---- ---
Total merchandise
sales 268.8 58.5% 303.5 53.3%
----- ---- ----- ----
Other revenues 3.8 0.8% 2.7 0.5%
------ ----- ------ -----
Total international
revenues $459.7 100.0% $569.9 100.0%
====== ===== ====== =====
Total consolidated
revenues $1,384.7 $1,567.1
======== ========
Fiscal Year Ended Fiscal Year Ended
January 4, 2009 January 6, 2008
--------------- ---------------
Percent Percent
Revenues of Total Revenues of Total
-------- -------- -------- --------
Domestic
--------
Rental revenues
Movies $2,272.4 63.4% $2,389.3 66.3%
Games 219.9 6.1% 220.6 6.1%
PRP 492.7 13.7% 527.3 14.6%
----- ---- ----- ----
Total rental revenues 2,985.0 83.2% 3,137.2 87.0%
------- ---- ------- ----
Merchandise sales
Movies 227.4 6.3% 221.2 6.1%
Games 155.0 4.3% 47.4 1.3%
Other 200.1 5.6% 177.9 4.9%
----- --- ----- ---
Total merchandise
sales 582.5 16.2% 446.5 12.3%
----- ---- ----- ----
Other revenues 23.3 0.6% 24.2 0.7%
-------- ----- -------- -----
Total domestic revenues $3,590.8 100.0% $3,607.9 100.0%
======== ===== ======== =====
International
-------------
Rental revenues
Movies $688.6 40.6% $756.9 39.1%
Games 57.6 3.4% 59.4 3.1%
PRP 134.6 7.9% 129.0 6.7%
----- --- ----- ---
Total rental revenues 880.8 51.9% 945.3 48.9%
----- ---- ----- ----
Merchandise sales
Movies 195.1 11.5% 222.9 11.5%
Games 433.2 25.5% 549.1 28.4%
Other 178.6 10.5% 181.6 9.4%
----- ---- ----- ---
Total merchandise
sales 806.9 47.5% 953.6 49.3%
----- ---- ----- ----
Other revenues 9.4 0.6% 35.6 1.8%
-------- ----- -------- -----
Total international
revenues $1,697.1 100.0% $1,934.5 100.0%
======== ===== ======== =====
Total consolidated
revenues $5,287.9 $5,542.4
======== ========
Gross Profit by Product Line:
Fiscal Quarter Ended Fiscal Quarter Ended
January 4, 2009 January 6, 2008
--------------- ---------------
Percent Percent
Gross Profit of Revenue Gross Profit of Revenue
------------ ---------- ------------ ----------
Domestic
--------
Rental $454.1 62.2% $508.3 60.5%
Merchandise 28.1 14.9% 34.2 22.6%
Other 5.7 100.0% 6.1 100.0%
--- ---
Total domestic 487.9 52.7% 548.6 55.0%
----- -----
International
-------------
Rental 133.5 71.4% 184.9 70.1%
Merchandise 57.1 21.2% 60.9 20.1%
Other 3.8 100.0% 2.7 100.0%
--- ---
Total international 194.4 42.3% 248.5 43.6%
----- -----
Total consolidated $682.3 49.3% $797.1 50.9%
====== ======
Fiscal Year Ended Fiscal Year Ended
January 4, 2009 January 6, 2008
--------------- ---------------
Percent Percent
Gross Profit of Revenue Gross Profit of Revenue
------------ ---------- ------------ ----------
Domestic
--------
Rental $1,788.1 59.9% $1,822.9 58.1%
Merchandise 106.0 18.2% 121.9 27.3%
Other 23.3 100.0% 24.2 100.0%
---- ----
Total domestic 1,917.4 53.4% 1,969.0 54.6%
------- -------
International
-------------
Rental 610.7 69.3% 655.6 69.4%
Merchandise 185.0 22.9% 204.4 21.4%
Other 9.4 100.0% 35.6 100.0%
--- ----
Total international 805.1 47.4% 895.6 46.3%
----- -----
Total consolidated $2,722.5 51.5% $2,864.6 51.7%
======== ========
BLOCKBUSTER INC.
SUPPLEMENTAL FINANCIAL INFORMATION
Selling, General and Administrative (SG&A) Comparison
(Dollars in millions)
Selling, General and Administrative Expenses:
Fiscal Quarter Ended Fiscal Quarter Ended
January 4, 2009 January 6, 2008
--------------- ---------------
Percent Percent
SG&A Expense of Revenue SG&A Expense of Revenue
------------ ---------- ------------ ----------
Domestic
Advertising $18.3 1.4% $22.7 1.5%
G&A expense -
store (4 wall) 317.7 22.9% 362.0 23.1%
G&A expense -
corporate and
other 70.4 5.1% 92.2 5.9%
International
Advertising 8.9 0.6% 12.4 0.8%
G&A expense 136.1 9.8% 188.7 12.0%
------ ---- ------ ----
Total SG&A $551.4 39.8% $678.0 43.3%
====== ==== ====== ====
Fiscal Year Ended Fiscal Year Ended
January 4, 2009 January 6, 2008
--------------- ---------------
Percent Percent
SG&A Expense of Revenue SG&A Expense of Revenue
------------ ---------- ------------ ----------
Domestic
Advertising $85.9 1.6% $150.5 2.7%
G&A expense -
store (4 wall) 1,338.2 25.3% 1,402.5 25.3%
G&A expense -
corporate and
other 316.4 6.0% 397.8 7.2%
International
Advertising 36.1 0.7% 43.5 0.8%
G&A expense 652.0 12.3% 724.8 13.1%
-------- ---- -------- ----
Total SG&A $2,428.6 45.9% $2,719.1 49.1%
======== ==== ======== ====
Facilities Statistics:
As of January 4, 2009
---------------------
Domestic International
--------- -------------
Total Avg Sq Total Sq Total Avg Sq Total Sq
Number Footage Footage Number Footage Footage
------ ------- -------- ----- ------ --------
(in (in (in (in
thousands) thousands) thousands) thousands)
Stores 3,878 5.5 21,484 1,928 3.1 5,943
Distribution centers 39 N/A 1,121 7 N/A 199
Corporate/
regional offices 12 N/A 416 7 N/A 117
BLOCKBUSTER INC.
SUPPLEMENTAL FINANCIAL INFORMATION
(Dollars in millions)
Other Information: Revenue
Fiscal Quarter Fiscal Year
Ended Ended
-------------- -----------
January 4, January 6, January 4, January 6,
2009 2008 2009 2008
----------- ---------- ---------- ----------
Domestic same-store
revenues increase
(decrease)
Rental revenues (2.6)% (3.1)% 1.2% (7.2)%
Merchandise sales 36.5% 11.7% 37.4% (3.7)%
Total revenues 4.4% (0.9)% 6.4% (6.9)%
International same-store
revenues increase
(decrease)
Rental revenues (5.9)% 0.5% (2.8)% (2.8)%
Merchandise sales 10.1% 20.3% 2.4% 23.3%
Total revenues 2.8% 10.0% (0.4)% 7.5%
Worldwide same-store
revenues increase
(decrease)
Rental revenues (3.5)% (2.2)% 0.1% (6.1)%
Merchandise sales 18.8% 17.0% 14.6% 11.6%
Total revenues 3.7% 2.9% 3.9% (2.3)%
Cash Flow Data:
Fiscal Quarter Fiscal Year
Ended Ended
-------------- -----------
January 4, January 6, January 4, January 6,
2009 2008 2009 2008
---------- ---------- ---------- ----------
Net cash provided by
(used for) operating
activities $152.1 $145.2 $51.0 $(56.2)
Net cash provided by
(used for) investing
activities $(42.7) $(9.3) $(116.5) $76.7
Net cash provided by
(used for) financing
activities $(39.3) $(85.0) $49.4 $(241.0)
Capital Expenditures $42.0 $22.4 $118.1 $74.4
Balance Sheet Information:
January 4, 2009 January 6, 2008
--------------- ---------------
Cash and cash equivalents $154.9 $184.6
Merchandise inventories $432.8 $343.9
Rental library $355.8 $441.1
Accounts payable $427.3 $472.8
Total debt (including
capital lease obligations) $817.8 $757.8
BLOCKBUSTER INC.
SUPPLEMENTAL FINANCIAL INFORMATION
Worldwide Store Count Information:
Fiscal Year Ended
-----------------
January 4, 2009 January 6, 2008
--------------- ---------------
Domestic company-owned stores:
Beginning 4,005 4,255
Additions/purchases 42 39
Closures/sales (169) (289)
---- ----
Ending 3,878 4,005
----- -----
International company-owned stores:
Beginning 2,068 2,296
Additions/purchases 21 101
Closures/sales (161) (329)
---- ----
Ending 1,928 2,068
----- -----
Franchised stores:
Beginning 1,757 1,809
Additions/purchases 81 80
Closures/sales (239) (132)
---- ----
Ending 1,599 1,757
----- -----
Total stores worldwide:
Beginning 7,830 8,360
Additions/purchases 144 220
Closures/sales (569) (750)
---- ----
Ending 7,405 7,830
===== =====
BLOCKBUSTER INC.
DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(Dollars in millions)
For the fiscal quarter and fiscal year ended January 4, 2009, the Company
reports adjusted net income (loss), adjusted net income (loss) per common
share and adjusted operating income (loss) excluding costs incurred for
store closures, severance, impairment of goodwill and other long-lived
assets and costs incurred to explore the acquisition of Circuit City
Stores, Inc.
For the fiscal quarter and fiscal year ended January 6, 2008, the Company
reports adjusted net income (loss), adjusted net income (loss) per common
share and adjusted operating income (loss) excluding charges related to
costs incurred for store closures, severance and impairment of goodwill
and other long-lived assets. Additionally, for the fiscal year ended
January 6, 2008, the Company reports adjusted net income (loss), adjusted
net income (loss) per common share and adjusted operating income (loss)
excluding the gain on sale of Gamestation and proceeds from the
termination of our Brazilian franchise agreement.
Adjusted net income (loss), adjusted net income (loss) per common share
and adjusted operating income (loss) are non-GAAP financial measures
within the meaning of Regulation G of the Securities and Exchange
Commission and are not measures of operating performance calculated in
accordance with GAAP. As a result, adjusted net income (loss), adjusted
net income (loss) per common share and adjusted operating income (loss)
should not be considered in isolation of, or as a substitute for, income
(loss) from continuing operations, net income (loss) per common share and
operating income (loss) as indicators of operating performance. Adjusted
net income (loss), adjusted net income (loss) per common share and
adjusted operating income (loss), as the Company calculates them, may not
be comparable to similarly titled measures employed by other companies.
Management believes excluding the recurring and non-recurring items listed
below from the Company's financial results provides investors with a
clearer perspective of the current underlying operating performance of the
Company, a clearer comparison to current period results and greater
transparency regarding supplemental information used by management in its
financial and operational decision making. Management uses these non-GAAP
financial measures as an internal measure of business operating
performance, to establish operational goals, to allocate resources and to
analyze trends. Income (loss) from continuing operations is the financial
measure calculated and presented in accordance with GAAP that is most
comparable to adjusted net income (loss). Operating income (loss) is the
financial measure calculated and presented in accordance with GAAP that is
most comparable to adjusted operating income (loss).
Fiscal Quarter Fiscal Year
Ended Ended
-------------- -----------
January 4, January 6, January 4, January 6,
2009 2008 2009 2008
---------- ---------- ---------- ----------
Reconciliation of
adjusted net income
(loss):
Income (loss) from
continuing operations $(359.8) $41.9 $(373.8) $(74.2)
Adjustments to reconcile
income (loss) from
continuing operations to
adjusted net income (loss):
Termination of
Brazilian franchise
agreement, net of tax
(non-recurring) - - - (17.0)
Store closure costs
including lease
terminations
(recurring) 1.9 0.4 11.6 15.4
Severance costs (non-
recurring) 3.3 13.3 4.6 30.8
Impairment of goodwill
and other long-lived
assets 435.0 2.2 435.0 2.2
Costs incurred to
explore the acquisition
of Circuit City Stores,
Inc. (non-recurring) - - 1.9 -
Gain on sale of
Gamestation
(non-recurring) - - - (81.5)
Adjusted net income (loss) 80.4 57.8 79.3 (124.3)
Preferred stock dividends (2.9) (2.9) (11.3) (11.3)
---- ---- ----- -----
Adjusted net income (loss)
applicable to common
stockholders $77.5 $54.9 $68.0 $(135.6)
===== ===== ===== =======
Adjusted net income (loss)
per common share -
diluted $0.40 $0.26 $0.35 $(0.71)
===== ===== ===== ======
Reconciliation of
adjusted operating
income (loss):
Operating income (loss) $(341.4) $73.2 $(293.3) $39.1
Adjustments to reconcile
operating income (loss)
to adjusted operating
income (loss):
Termination of Brazilian
franchise agreement
(non-recurring) - - - (20.0)
Store closure costs
including lease
terminations
(recurring) 1.9 0.4 11.6 15.4
Severance costs (non-
recurring) 3.3 13.3 4.6 30.8
Impairment of goodwill
and other long-lived
assets 435.0 2.2 435.0 2.2
Costs incurred to
explore the acquisition
of Circuit City Stores,
Inc. (non-recurring) - - 1.9 -
Gain on sale of
Gamestation
(non-recurring) - - - (81.5)
----- ----- ------ ------
Adjusted operating
income (loss) $98.8 $89.1 $159.8 $(14.0)
===== ===== ====== ======
BLOCKBUSTER INC.
DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(Dollars in millions)
For the fiscal quarter and fiscal year ended January 4, 2009, the Company
reports adjusted earnings before interest, taxes, depreciation and
amortization ("adjusted EBITDA") excluding costs incurred for store
closures, severance, impairment of goodwill and other long-lived assets,
costs incurred to explore the acquisition of Circuit City Stores, Inc. and
stock compensation.
For the fiscal quarter and fiscal year ended January 6, 2008, the Company
reports adjusted EBITDA excluding costs incurred for store closures,
severance, impairment of goodwill and other long-lived assets and stock
compensation. Additionally, for the fiscal year ended January 6, 2008, the
Company reports adjusted EBITDA excluding proceeds from the gain on sale
of Gamestation and the termination of our Brazilian franchise agreement.
Adjusted EBITDA is a non-GAAP financial measure within the meaning of
Regulation G of the Securities and Exchange Commission and is not a
measure of operating performance calculated in accordance with GAAP. As
a result, adjusted EBITDA should not be considered in isolation of, or as
a substitute for, net income (loss) as an indicator of operating
performance. Adjusted EBITDA, as the Company calculates it, may not be
comparable to similarly titled measures employed by other companies.
Management believes excluding the recurring and non-recurring items listed
under EBITDA below from the Company's financial results provides investors
with a clearer perspective of the current underlying operating performance
of the Company, a clearer comparison to current period results and greater
transparency regarding supplemental information used by management in its
financial and operational decision making.
In addition, management believes that adjusting the Company's financial
results to exclude income (loss) from discontinued operations, net of tax,
interest and other income, net and depreciation and amortization of
intangibles also provides investors with a clearer perspective of the
current underlying operating performance of the Company and a clearer
comparison to current period results.
Management uses adjusted EBITDA as an internal measure of business
operating performance, to establish operational goals, to allocate
resources and to analyze trends. Net income (loss) is the financial
measure calculated and presented in accordance with GAAP that is most
comparable to adjusted EBITDA.
Fiscal Quarter Fiscal Year
Ended Ended
-------------- -----------
January 4, January 6, January 4, January 6,
2009 2008 2009 2008
---------- ---------- ---------- ----------
Reconciliation of
adjusted EBITDA:
Net income (loss) $(359.8) $41.0 $(374.1) $(73.8)
Adjustments to
reconcile net income
(loss) to adjusted EBITDA:
(Income) loss from
discontinued operations,
net of tax - 0.9 0.3 (0.4)
Provision for income
taxes 10.7 9.4 25.6 29.6
Interest and other
income, net 7.7 21.9 54.9 83.7
Impairment of goodwill
and other
long-lived assets 435.0 2.2 435.0 2.2
Depreciation and
intangible amortization 37.3 43.7 152.2 185.7
------ ------ ------ ------
EBITDA $130.9 $119.1 $293.9 $227.0
====== ====== ====== ======
Lease termination
costs incurred for store
closures (recurring) 0.6 0.4 4.6 9.1
Termination of
Brazilian franchise
agreement (non-
recurring) - - - (20.0)
Severance costs
(non-recurring) 3.3 13.3 4.6 30.8
Costs incurred to
explore the acquisition
of Circuit City Stores,
Inc. (non-recurring) - - 1.9 -
Gain on sale of
Gamestation
(non-recurring) - - - (81.5)
Stock compensation
(recurring) 1.4 4.7 14.1 14.6
------ ------ ------ ------
Adjusted EBITDA $136.2 $137.5 $319.1 $180.0
====== ====== ====== ======
The following table presents consolidated financial information, including
a reconciliation of adjusted EBITDA, a non-GAAP financial measure, to net
income, the most comparable GAAP financial measure.
Guidance Range
Full Year 2009 Guidance Reconciliation: --------------
Low High
--- ----
Net income (loss) $40.0 $60.0
Adjustments to reconcile net income (loss)
to adjusted EBITDA:
Provision for income taxes 25.0 25.0
Interest and other income, net 99.0 99.0
Depreciation and intangible amortization 124.0 124.0
Stock compensation 17.0 17.0
------ ------
Adjusted EBITDA $305.0 $325.0
====== ======
BLOCKBUSTER INC.
DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(Dollars in millions)
Free cash flow reflects the Company's net cash flow provided by (used
for) operating activities less capital expenditures. The Company uses
free cash flow, among other things, to evaluate its operating
performance and as a measure of liquidity. Management believes free
cash flow provides investors with an important perspective on the cash
available for debt service, acquisitions and stockholders after making
the capital investments required to support ongoing business
operations and long-term value creation. The Company believes the
presentation of free cash flow is relevant and useful for investors
because it allows investors to view performance in a manner similar to
the method used by management and helps improve their ability to
understand the Company's operating performance. In addition, free
cash flow is also a measure used by the Company's investors and
analysts for purposes of valuation and comparing the operating
performance of the Company to other companies in its industry.
Free cash flow is a non-GAAP financial measure within the meaning of
Regulation G of the Securities and Exchange Commission and is not a
measure of performance calculated in accordance with GAAP. As a result, free cash flow should not be considered in isolation of, or as
a substitute for, net income (loss) as an indicator of operating
performance or net cash flow provided by (used for) operating
activities as a measure of liquidity. Free cash flow, as the Company
calculates it, may not be comparable to similarly titled measures
employed by other companies. In addition, free cash flow does not
necessarily represent funds available for discretionary use and is not
necessarily a measure of the Company's ability to fund its cash needs.
As the Company uses free cash flow as a measure of performance and as
a measure of liquidity, the tables below reconcile free cash flow to
both net income (loss) and net cash flow provided by (used for)
operating activities, the most directly comparable financial measures
reported under GAAP.
The following table provides a reconciliation of net cash flow
provided by (used for) operating activities to free cash flow:
Fiscal Quarter Fiscal Year
Ended Ended
-------------- -----------
January 4, January 6, January 4, January 6,
2009 2008 2009 2008
---------- ---------- ---------- ----------
Net cash provided
by (used for)
operating activities $152.1 $145.2 $51.0 $(56.2)
Adjustments to reconcile
net cash flow used
for operating activities
to free cash flow:
Capital expenditures (42.0) (22.4) (118.1) (74.4)
----- ----- ------ -----
Free cash flow $110.1 $122.8 $(67.1) $(130.6)
====== ====== ====== =======
The following table provides a reconciliation of net income (loss) to
free cash flow:
Fiscal Quarter Fiscal Year
Ended Ended
-------------- -----------
January 4, January 6, January 4, January 6,
2009 2008 2009 2008
---------- ---------- ---------- ----------
Net income (loss) $(359.8) $41.0 $(374.1) $(73.8)
Adjustments to reconcile
net income (loss)
to free cash flow:
Depreciation and
intangible
amortization 37.3 43.7 152.2 185.7
Impairment of
goodwill
and other long-lived
assets 435.0 2.2 435.0 2.2
Non-cash share-based
compensation expense 1.4 4.7 14.1 14.6
Capital expenditures (42.0) (22.4) (118.1) (74.4)
Rental library
purchases,
net of rental
amortization 10.8 (8.3) 71.3 31.2
Changes in operating
assets and
liabilities 27.4 65.5 (248.6) (131.0)
Changes in deferred
taxes and other - (3.6) 1.1 (3.6)
Gain on sale of
Gamestation - - - (81.5)
---- ---- ---- -----
Free cash flow $110.1 $122.8 $(67.1) $(130.6)
====== ====== ====== =======
SOURCE Blockbuster Inc.
Latest Money News
- AIG resolves all legal disputes with Greenberg
- Good news raises hopes recovery won't fizzle
- Tight economy forces some to stay home for holiday
- Stocks push higher after drop in jobless claims
- AIG cuts salaries to 3 top executives
- Toyota to replace gas pedals on 4 million vehicles
- Fed tightens conflict of interest rules
- Talk about a low interest rate: U.S....
- Google set to map the world - and push out...
- Washington Mutual gave a mortgage to O.J....
- Closing Bell: Economic Catapult for...
- Deere up on Q4 earnings performance
- ADVERTISEMENT:
- Washington Post closes the last of its U.S....
- Ciena: Recent dip suggests year-end...
- Option traders expecting limited movement in...