Movie Gallery anticipates needing further loan amendments in 2006

By Sara Rosenberg

New York, Feb. 6 - Movie Gallery Inc. foresees resuming discussions with lenders regarding further amendments to its senior credit facility in the near future, said Joe Malugen, chairman, president and chief executive officer, in a company news release on Monday.

The expectation for future amendments is based on softness in the rental industry.

For the fourth quarter of 2005, the company believes it is in full compliance with all credit facility debt covenants and has reaffirmed its guidance of revenues between $675 million and $705 million and same-store revenues in the range of 5% to 9%, as compared to the fourth quarter of 2004.

The company's normal year-end audit is in progress, and it expects to report its fourth quarter and full-year results in March.

"We continue to believe that our industry is long-term fundamentally sound, and we are looking forward to the introduction of next-generation, high-definition DVDs as a significant catalyst for our business," Malugen added in the release.

Movie Gallery is Dothan, Ala.-based video rental company.

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