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Movie Gallery. Information available from Movie Gallery's 2005 10-K and second
quarter 2006 10-Q were used in preparing this assessment. ...
... and Movie Gallery are currently the two strongest competitors in the market,
and therefore pose the biggest threats to Netflix. ...
netflix. Competitors In the movie rental market, the major competitors
of NetFlix are Blockbuster, Movie Gallery, and GameZnFlix. ...
... he worried about Netflix and some of the other competitors in on-line distribution,
Antioco didn't think he was too worried about Movie Gallery, which had ...
... According to Movie Gallery executives, the primary industry participants compete
fiercely on “price, title selection, rental period, [and] the number of ...
Submitted by heel4unc on June 4, 2007
Category: Business
Words: 1526 | Pages: 7
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Information available from Movie Gallery's 2005 10-K and second quarter 2006 10-Q were used in preparing this assessment. The website to locate Movie Gallery's 2005 10-K and second quarter 2006 (10-Q) can be located in the "investor relations" section on Movie Gallery's website at www.moviegallery.com.
Movie Gallery, Inc.'s (the Company) most recent annual report was for the year-ended January 1, 2006 (the 2005 annual report year). The Company operates on a 52 / 53 week year with the year-end date being the Sunday following December 30. This results in some years having 53 weeks of income recorded even though the Company reflects depreciation on a twelve month basis (52 weeks).
For the most recent year-end, the Company incurred a net loss before taxes of almost $550 million. This loss is non consistent with historical amounts reported by the Company. Two significant factors contribute to the loss.
One was the acquisition of Hollywood Video. Hollywood was strapped with large amounts of debt resulting in the Company's interest expense charge increasing almost $68 million from the prior fiscal year. Also, as a result of acquiring Hollywood, the Company wrote-off the pre-acquisition deferred tax balances of Hollywood and set-up new deferred tax balances. These new balances were based on the differences between the amounts of assets and liabilities recorded for financial statement purposes and the underlying tax basis of those assets and liabilities, including amounts assigned to Hollywood's carryover tax attributes. The net impact of this resulted in a decrease to deferred tax assets by $13.1 million.
Additionally, all acquisition transactions initiated after June 30, 2001, require the use of purchase accounting for financial reporting purposes. FAS 141 discusses purchase accounting and requires the price to be allocated to all assets acquired and liabilities assumed based on their fair market...
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