Movie Gallery Inc. (Dothan, Ala.), the movie rental retailer that has been battling industry leader Blockbuster Inc. (Dallas) for Hollywood Video (Wilsonville, Ore.), has announced record revenues for its fourth quarter of 2004, which ended Jan. 2, 2005.
Total revenues in the quarter increased 6.6 percent and were up 14.3 percent for the year.
“We achieved record sales and profits in fiscal 2004, representing our sixth consecutive year of record financial results,” said chairman, president and ceo Joe Malugen. “Adherence to our internal growth strategies and low-cost operating philosophy helped us deliver solid operating results in spite of a significantly weaker home video release schedule in the second half of 2004.
“During the year,” he added, “we continued to enhance our growth by committing significant resources to the development of new stores, acquisitions, the expansion of our international presence and the development of several key initiatives such as our game business. [In] 2004, we added a net total of 324 stores, with 314 new stores, 74 acquired stores and 64 store closures. As a result, at year end, we had a total of 2482 stores throughout North America, with 2276 stores in the United States, 201 stores in Canada and five stores in Mexico.”
“Our all-cash acquisition of Hollywood provides greater closing certainty and will deliver real value to Hollywood shareholders,” said executive vp, general counsel, Page Todd. “We continue to believe both the FTC and the courts will conclude that a combined Blockbuster-Hollywood would significantly harm competition and lead to higher video rental fees for the consumer. Furthermore, contrary to Blockbuster’s many public statements, we believe that Blockbuster’s flawed market theory will not survive the scrutiny of a federal court and for that reason we expect the FTC to obtain an injunction preventing Blockbuster from proceeding with its hostile takeover attempt.”