Movie and video game rental chain operator Movie Gallery said it is evaluating its strategic options, including a possible sale, after being unable to meet certain financial obligations.
As a result of "significantly" weaker than expected results in the second quarter, the company was not able to meet financial covenants contained in its senior credit facility administered by Goldman Sachs.
Dothan-based Movie Gallery said it is in talks with lenders about the situation and plans to develop a plan to remedy the defaults.
In the meantime, Movie Gallery plans to operate its business without interruption and has drawn the remaining funds available under its revolving credit line, and said it has about 50 million dollars of cash on hand.
The company added it will continue to work on conserving cash and improving profitability.
(Copyright 2007 by The Associated Press. All Rights Reserved.)