Blockbuster Inc. (NYSE:BBI) saw earnings decline in the fourth quarter, but management remains upbeat about the future. In
announcing results on Thursday, the movie rental chain reported a $359.7 million loss and saw revenue decline 12% to $1.38 billion from a year earlier. But the company also said it had reached agreements to reorganize its debt.
The results followed the vote of confidence the chain received on Tuesday, when Mark Wattles, co-founder and former chief executive of
rival Hollywood Entertainment Corp., purchased
a 5.7% stake in Blockbuster and said the company's "proactive" strategy would keep it out of Chapter 11.
Blockbuster sparked rumors of bankruptcy in early March when it
hired Kirkland & Ellis LLP to help it restructure its financing. The company has a $200 million revolving credit line due in August.
Going forward, Blockbuster will seek strategic partners to help it
expand its digital opportunities and keep pace with rival Netflix Inc. (NASDAQ:NFLX) and cable and satellite companies offering movie downloads. Since January, Blockbuster has announced
alliances with
Sonic Solutions and Cinema Now to deliver movies digitally via streaming and downloading.
And in announcing fourth-quarter results, chief executive Jim Keyes said to expect more
alliances to be announced soon.
- Suzanne Stevens
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