Movie Gallery's bonds took a hammering last week on continued concerns about the company's financial outlook. Its 11% '12 bonds fell 10 points to 58. Questions have continued to fly after Movie Galley announced it will resume talks with lenders about amending its senior credit facility.
Earlier this month, Joe Malugen, chairman and ceo, blamed continued poor conditions in the rental industry for its need to seek amendments. He also says in a release that it was in compliance with debt covenants in the fourth quarter of 2005. Movie Gallery posted a $12.5 million net loss in the third quarter of 2005, compared with a $9.2 million profit in the same period of 2004. Movie Gallery's same-store revenues in the fourth quarter of 2005 dropped 9% over the same period in 2004. A company spokesman declined comment.