DALLAS, Jan. 5 /PRNewswire-FirstCall/ -- Blockbuster Inc. today announced it has reached a definitive agreement for the sale of its Rhino Video Games chain to GameStop Corp. for an undisclosed price. The sale is expected to close by the end of January.
Rhino Video Games is a regional retail chain specializing in buying, selling and trading video games. Rhino currently has 72 stores located in the Southeastern U.S. including Florida, Alabama, Tennessee, Georgia, North Carolina and South Carolina.
John Antioco, Blockbuster Chairman and Chief Executive Officer, said, "Today's announcement is in line with our goal to maintain focus on our Blockbuster-branded assets. We wish the Rhino concept ongoing success under its new ownership, and while games remain an integral part of our Blockbuster business, we will continue to focus on growing our overall share of the video rental market both through our stores and through BLOCKBUSTER Total Access(TM), which gives our online subscribers the option of returning their DVDs through the mail or exchanging them at a participating BLOCKBUSTER(R) store for free in-store movie rentals."
R. Richard Fontaine, GameStop Chairman and Chief Executive Officer, said, "The integration of the Rhino group into the growing portfolio of GameStop stores will result in operating synergies while being accretive to earnings. The location of most Rhino stores do not overlap existing GameStop sites, and primarily serve secondary and tertiary markets where we have been very successful. Furthermore, the Rhino business model, and a very game oriented management team, will fit seamlessly into the GameStop culture."
About Blockbuster
Blockbuster Inc. is a leading global provider of in-home movie and game entertainment, with more than 8,000 stores throughout the Americas, Europe, Asia and Australia. The Company may be accessed worldwide at http://www.blockbuster.com/ .
About GameStop Corp.
Headquartered in Grapevine, TX, GameStop Corp. is the world's largest video game and entertainment software retailer. The company operates 4,633 retail stores across the United States and in fourteen countries worldwide. The company also owns two e-commerce sites, GameStop.com and EBgames.com, and Game Informer(R) magazine, a leading multi-platform video game publication. GameStop Corp. sells new and used video game software, hardware and accessories for next generation video game systems from Sony, Nintendo, and Microsoft. In addition, the company sells PC entertainment software, related accessories and other merchandise.
General information on GameStop Corp. can be obtained at the company's corporate website: http://www.gamestop.com/corporate .
Forward-Looking Statements
This release includes forward-looking statements, including those relating to the sale of our Rhino Video Games chain and our strategy of growing our share of the video rental market and growing our online rental service. These forward-looking statements are not guarantees of future performance and involve risks, uncertainties, assumptions and other factors that are difficult to predict. Actual results may vary materially from what is expressed in or indicated by the forward- looking statements. Our ability to consummate the Rhino transaction and the timing of that transaction are subject to the satisfaction of closing conditions and other contingencies, some of which may not be within our control. Actual results regarding our ability to grow our share of the video rental market and grow our online rental service may vary materially as a result of a number of factors, including, among others, (i) consumer appeal of BLOCKBUSTER Total Access and the related impact of competitor pricing and product and service offerings, (ii) overall industry performance, (iii) our ability to obtain favorable terms from suppliers, including on such matters as copy depth and uses of product, (iv) the studios' dependence on revenues generated from retail home video and their related determinations with respect to pricing and the timing of distribution of their product, (v) the variability in consumer appeal of the movie titles released for rental, (vi) our ability to respond to changing consumer preferences, including with respect to video on demand, digital distribution and other new technologies and alternative methods of content delivery, and to effectively adjust our offerings if and as necessary, (vii) the extent and timing of our continued investment of incremental operating expenses and capital expenditures to continue to develop and implement our initiatives, including BLOCKBUSTER Total Access, and our corresponding ability to effectively control and reduce overall operating expenses and capital expenditures, (viii) our ability to effectively and timely prioritize and implement our initiatives and to timely implement and maintain the necessary information technology systems and infrastructure to support our initiatives, and (ix) and other factors as described in our filings with the Securities and Exchange Commission, including the factors discussed under the heading "Risk Factors" in our Form 10-K for the year ended December 31, 2005 and under the heading "Disclosure Regarding Forward-Looking Information" in our Form 10-Q for the quarter ended September 30, 2006. This cautionary statement is provided pursuant to Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The forward-looking statements in this press release are made only as of the date hereof and we undertake no obligation to update publicly any forward-looking statement for any reason, even if new information becomes available or other events occur in the future.
GameStop Safe Harbor
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to future financial and operating results, the company's plans, objectives, expectations and intentions and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of GameStop's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward- looking statements: the inability of GameStop to acquire or successfully integrate the Rhino stores or unanticipated costs of that acquisition or integration; the risk that the cost savings and other synergies from the combination with Electronics Boutique may not be fully realized or may take longer to realize than expected; the inability to obtain sufficient quantities of product to meet consumer demand, including Sony's PlayStation 3 and Nintendo's Wii; the timing of release of video game titles for next generation consoles; and economic and other events that could reduce or impact consumer demand. Additional factors that could cause GameStop's results to differ materially from those described in the forward-looking statements can be found in GameStop's Annual Report on Form 10-K for the fiscal year ended January 28, 2006 filed with the SEC and available at the SEC's Internet site at http://www.sec.gov/ .
