Dallas-based Blockbuster finally filed its annual report with the Securities and Exchange Commission today, reporting, yet again, a net loss of $374.1 million even while same-store revenues increased nearly 4 percent. But, as expected, the video- and game-rental company also warned investors that if it doesn't get its revolving loan restructuring all crossed and dotted "on or about May 11," well, the company "may not have sufficient liquidity to finance the ongoing obligations of our business, which raises substantial doubt about our ability to continue as a going concern." Which are but some of the potential pitfalls outlined in the financials. You'll also find these listed among the many "Risk Factors" contained in today's report, including a variation on an old familiar:
- We cannot predict the impact that the following may have on our business: (i) new or improved technologies or video formats, (ii) alternative methods of content delivery or (iii) changes in consumer behavior facilitated by these technologies or formats and alternative methods of content delivery. We also compete generally for the consumer's entertainment dollar and leisure time.
- Overall revenues generated from the in-store home video industry are projected to continue to decline. A faster than anticipated decline in the in-store industry has, in the past and may in the future, adversely affect our business and our ability to implement our strategic initiatives, particularly when considering sustained decreases in consumer spending attributable to the unprecedented decline in overall economic conditions, the reversal of which cannot be accurately determined.
- Our financial results are impacted by seasonality, including the adverse impact caused by improved weather conditions.
- Our revenues could be adversely affected due to the variability in consumer appeal of the movie titles and game software released for rental and sale, as well as the effect of game platform cycles.
- Our business would lose a competitive advantage if the movie studios were to shorten or eliminate the home video retailer distribution window or otherwise adversely change their current practices with respect to the timing of the release of movies to the various distribution channels
- Industry consolidation in the in-store home video rental industry has occurred and may continue. If we are not successful in capitalizing on this industry consolidation, our financial results may be adversely affected.