Blockbuster Posts 23% Cash EPS Gain to $0.27 for the First Quarter

- Revenues up 8.0% to $1.31 Billion



- Rental Revenues up 9.1%; Same Store Revenues Increase 5.3%, Up for the

13th Consecutive Quarter



- Free Cash Flow Up 67%



- DVD Rental Transactions Up Over 200%



Apr 19, 2001, 01:00 ET from Blockbuster Inc.

    DALLAS, April 19 /PRNewswire/ -- Blockbuster Inc. (NYSE:   BBI), the leading
 provider of rentable home entertainment, today announced strong financial
 results for the first quarter ended March 31, 2001.  Total revenues for the
 first quarter increased 8.0% to $1.31 billion compared with $1.21 billion in
 the first quarter of 2000, due primarily to a 5.3% increase in worldwide same-
 store revenues and a net increase of 329 company-operated stores since the
 first quarter of 2000.  Rental revenues increased 9.1% or $93.5 million to
 $1.12 billion, compared with $1.02 billion in last year's comparable period,
 driven by extraordinary growth in DVD rental activity.
     Cash earnings (net income before goodwill amortization, net of tax) were
 $46.5 million, or $0.27 per share, up 23% for the first quarter of 2001,
 compared with $38.1 million, or $0.22 per share for the same period last year.
     EBITDA (earnings before interest, income taxes, depreciation and
 amortization) for the first quarter of 2001 increased to $160.5 million from
 $150.3 million in the same period last year.  Free cash flow (net income
 before depreciation and amortization and less capital expenditures) increased
 67% to $99.9 million for the first quarter of 2001 from $59.9 million for the
 first quarter of 2000 as a result of continued strong growth in the business
 and lower capital expenditures.
     Gross profit increased 9.0% to $779.2 million for the first quarter of
 2001 from $714.7 million in the same period last year.  Gross profit as a
 percentage of revenues for the first quarter of 2001 was 59.6%, slightly
 higher than the same period last year.
     Operating expenses (general and administrative, advertising, and
 depreciation and amortization) totaled $725.4 million for the first quarter,
 compared with $670.0 million in the same period last year.  The increase was
 primarily a result of growth in the number of stores and strategic investments
 in initiatives to improve customer service.  As a percentage of revenue,
 operating expenses for the first quarter were essentially flat compared with
 last year.
     "Blockbuster is off to an excellent start this year, both financially and
 strategically," said John Antioco, Blockbuster Chairman and Chief Executive
 Officer.  "Our core rental business continues to thrive with first quarter DVD
 rental transactions increasing more than 200% year over year.  Looking ahead,
 our DIRECTV and RadioShack alliances will complement our growing rental
 business and contribute to our momentum throughout 2001 and beyond."
 
     Business Initiatives
     In support of its strategic mission to evolve into a leading provider of a
 broad array of home entertainment, Blockbuster launched DIRECTV System sales
 in nearly 3,800 company-operated stores in the third quarter of 2000, quickly
 becoming one of the nation's top DIRECTV retailers.  Based on this success,
 Blockbuster plans to co-brand the DIRECTV pay-per-view movie channels later
 this year, potentially giving the Company access to a new customer base and an
 incremental source of revenue.
     Additionally, using the successful DIRECTV rollout as a model, Blockbuster
 announced a strategic alliance in February with RadioShack and is currently on
 schedule to install RadioShack stores inside 130 Blockbuster locations this
 summer with a nationwide rollout planned for 2002.
 
     2001 Business Outlook
     Worldwide same store revenues for the second quarter are expected to be
 flat with the same period last year due to the strong slate of titles in the
 second quarter of 2000, which led to an 11% increase in same store revenues
 over 1999.  Worldwide same store revenues increases are expected to be in the
 low single digit range for the full year.
     For the full year, the Company expects to add approximately 200-250
 company-operated stores, the majority of which will be domestic.  Capital
 expenditures for the full year are expected to be approximately
 $150-$175 million.
     The Company continues to be confident it will generate solid cash earnings
 growth for the full-year 2001.
     "We are confident about the continued growth of our core business, our
 ability to achieve our targeted number of DIRECTV subscribers and the launch
 of our RadioShack alliance, all of which should position us to deliver
 sustainable growth well into the future," said Antioco.
 
     About Blockbuster
     Blockbuster Inc. is a publicly traded subsidiary of Viacom Inc.
 (NYSE:   VIA, VIA.B) and is the world's leading renter of videos, DVDs, and
 video games with more than 7,700 stores throughout the Americas, Europe, Asia
 and Australia.  The Company may be accessed internationally at
 blockbuster.com.  Viacom is the No. 1 platform in the world for advertisers,
 with preeminent positions in broadcast and cable television, radio, outdoor
 advertising and online.  With programming that appeals to audiences in every
 demographic category across virtually all media, Viacom is a leader in the
 creation, promotion and distribution of entertainment, news, sports and music.
 Viacom's well-known brands include CBS, MTV, Nickelodeon, VH1, BET, Paramount
 Pictures, Infinity Broadcasting, UPN, TNN: The National Network, CMT, Showtime
 and Simon & Schuster.  More information about Viacom and its businesses is
 available at http://www.viacom.com.
 
     This news release contains forward-looking statements relating to
 Blockbuster's operations, including, without limitation, statements relating
 to business objectives and growth expectations, expectations relating to
 Blockbuster's initiatives with DIRECTV and RadioShack, the anticipated impact
 of DVD on Blockbuster's operations, and expectations regarding Blockbuster's
 financial results for 2001.  These forward-looking statements are based on
 Blockbuster's current intent, expectations, estimates, and projections and are
 not guarantees of future performance.  These statements involve risks,
 uncertainties, assumptions, and other factors that could cause actual results
 to vary materially from those expressed in or indicated by them.  Factors
 include, among others: consumer interest in, and demand for, newly released
 videos, DVDs and other Blockbuster product and service offerings; the impact
 of competitive product and service offerings and pricing; the effect of game
 platform cycles; the impact of technological shifts on Blockbuster's business
 and Blockbuster's ability to respond to changing consumer preferences;
 consumer acceptance of, and demand for, new technologies; Blockbuster's
 ability to reach agreements with service, product, and content providers on
 acceptable commercial terms and the success of these alliances and agreements
 in developing new products and services; and other factors, as set forth under
 the heading "Cautionary Statements" in Blockbuster's annual report on Form
 10-K for the fiscal year ended December 31, 2000.
 
 
                                  BLOCKBUSTER INC.
                          COMPARATIVE FINANCIAL HIGHLIGHTS
                      (In millions, except per share amounts)
 
                                                    Three Months Ended
                                                         March 31,
                                                   2001              2000
     Revenues:
       Rental revenues                          $1,117.9          $1,024.4
       Merchandise sales                           169.5             170.5
       Other revenues                               20.5              16.2
                                                 1,307.9           1,211.1
     Cost of sales:
       Cost of rental revenues                     393.5             360.7
       Cost of merchandise sold                    135.2             135.7
                                                   528.7             496.4
 
     Gross profit                                  779.2             714.7
 
     Operating expenses:
       General and administrative                  564.3             512.8
       Advertising                                  54.4              51.6
       Depreciation                                 62.5              61.1
       Amortization of intangibles                  44.2              44.5
                                                   725.4             670.0
 
     Operating income                               53.8              44.7
       Interest expense                            (24.4)            (29.4)
       Interest income                               1.8               1.7
       Other items, net                             (1.6)              ---
 
     Income before income taxes                     29.6              17.0
       Provision for income taxes                  (25.3)            (21.7)
       Equity in income of affiliated
        companies, net of tax                        0.4               0.6
     Net income (loss)                              $4.7             $(4.1)
     Net income (loss) per share:
       Basic and diluted                           $0.03            $(0.02)
 
     EBITDA (1)                                   $160.5            $150.3
     Cash earnings (2)                             $46.5             $38.1
     Cash earnings per share, basic and
      diluted (2)                                  $0.27             $0.22
 
     Weighted average shares outstanding:
       Basic                                       175.0             175.0
 
       Diluted                                     175.4             175.0
 
     Cash dividends per common share               $0.02             $0.02
 
     Same Store Revenues Data:
       Worldwide same store revenues
        increase (3)                                 5.3%              3.1%
 
     (1)   EBITDA represents operating income plus depreciation and
           amortization of intangibles.  EBITDA may differ in the method of
           calculation from similarly titled measures used by other companies.
     (2)   Cash earnings reflect net income before intangible amortization, net
           of tax.
     (3)   This represents the increase over the prior comparable period.
 
 
                                BLOCKBUSTER INC.
                                   OTHER DATA
            (In millions, except worldwide store count information)
 
 
      Selected Balance Sheet Data:
                                                 March 31,       December 31,
                                                   2001              2000
 
     Cash and cash equivalents                    $137.9            $194.2
     Total debt (excluding capital lease
      obligations)                              $1,028.9          $1,047.0
 
 
      Worldwide Store Count Information:
                                                      Three Months Ended
                                                           March 31,
                                                    2001             2000
     Domestic Company-Operated Stores:
     Beginning                                     4,273             3,970
     Net additions                                    22                52
     Ending                                        4,295             4,022
 
     International Company-Operated Stores:
     Beginning                                     1,981             1,909
     Net additions                                     7                23
     Ending                                        1,988             1,932
 
     Franchised and/or Joint Venture Stores:
     Beginning                                     1,423             1,274
     Net additions                                    17                20
     Ending                                        1,440             1,294
 
     Total Stores Worldwide:
     Beginning                                     7,677             7,153
     Net additions                                    46                95
     Ending                                        7,723             7,248
 
 

SOURCE Blockbuster Inc.
    DALLAS, April 19 /PRNewswire/ -- Blockbuster Inc. (NYSE:   BBI), the leading
 provider of rentable home entertainment, today announced strong financial
 results for the first quarter ended March 31, 2001.  Total revenues for the
 first quarter increased 8.0% to $1.31 billion compared with $1.21 billion in
 the first quarter of 2000, due primarily to a 5.3% increase in worldwide same-
 store revenues and a net increase of 329 company-operated stores since the
 first quarter of 2000.  Rental revenues increased 9.1% or $93.5 million to
 $1.12 billion, compared with $1.02 billion in last year's comparable period,
 driven by extraordinary growth in DVD rental activity.
     Cash earnings (net income before goodwill amortization, net of tax) were
 $46.5 million, or $0.27 per share, up 23% for the first quarter of 2001,
 compared with $38.1 million, or $0.22 per share for the same period last year.
     EBITDA (earnings before interest, income taxes, depreciation and
 amortization) for the first quarter of 2001 increased to $160.5 million from
 $150.3 million in the same period last year.  Free cash flow (net income
 before depreciation and amortization and less capital expenditures) increased
 67% to $99.9 million for the first quarter of 2001 from $59.9 million for the
 first quarter of 2000 as a result of continued strong growth in the business
 and lower capital expenditures.
     Gross profit increased 9.0% to $779.2 million for the first quarter of
 2001 from $714.7 million in the same period last year.  Gross profit as a
 percentage of revenues for the first quarter of 2001 was 59.6%, slightly
 higher than the same period last year.
     Operating expenses (general and administrative, advertising, and
 depreciation and amortization) totaled $725.4 million for the first quarter,
 compared with $670.0 million in the same period last year.  The increase was
 primarily a result of growth in the number of stores and strategic investments
 in initiatives to improve customer service.  As a percentage of revenue,
 operating expenses for the first quarter were essentially flat compared with
 last year.
     "Blockbuster is off to an excellent start this year, both financially and
 strategically," said John Antioco, Blockbuster Chairman and Chief Executive
 Officer.  "Our core rental business continues to thrive with first quarter DVD
 rental transactions increasing more than 200% year over year.  Looking ahead,
 our DIRECTV and RadioShack alliances will complement our growing rental
 business and contribute to our momentum throughout 2001 and beyond."
 
     Business Initiatives
     In support of its strategic mission to evolve into a leading provider of a
 broad array of home entertainment, Blockbuster launched DIRECTV System sales
 in nearly 3,800 company-operated stores in the third quarter of 2000, quickly
 becoming one of the nation's top DIRECTV retailers.  Based on this success,
 Blockbuster plans to co-brand the DIRECTV pay-per-view movie channels later
 this year, potentially giving the Company access to a new customer base and an
 incremental source of revenue.
     Additionally, using the successful DIRECTV rollout as a model, Blockbuster
 announced a strategic alliance in February with RadioShack and is currently on
 schedule to install RadioShack stores inside 130 Blockbuster locations this
 summer with a nationwide rollout planned for 2002.
 
     2001 Business Outlook
     Worldwide same store revenues for the second quarter are expected to be
 flat with the same period last year due to the strong slate of titles in the
 second quarter of 2000, which led to an 11% increase in same store revenues
 over 1999.  Worldwide same store revenues increases are expected to be in the
 low single digit range for the full year.
     For the full year, the Company expects to add approximately 200-250
 company-operated stores, the majority of which will be domestic.  Capital
 expenditures for the full year are expected to be approximately
 $150-$175 million.
     The Company continues to be confident it will generate solid cash earnings
 growth for the full-year 2001.
     "We are confident about the continued growth of our core business, our
 ability to achieve our targeted number of DIRECTV subscribers and the launch
 of our RadioShack alliance, all of which should position us to deliver
 sustainable growth well into the future," said Antioco.
 
     About Blockbuster
     Blockbuster Inc. is a publicly traded subsidiary of Viacom Inc.
 (NYSE:   VIA, VIA.B) and is the world's leading renter of videos, DVDs, and
 video games with more than 7,700 stores throughout the Americas, Europe, Asia
 and Australia.  The Company may be accessed internationally at
 blockbuster.com.  Viacom is the No. 1 platform in the world for advertisers,
 with preeminent positions in broadcast and cable television, radio, outdoor
 advertising and online.  With programming that appeals to audiences in every
 demographic category across virtually all media, Viacom is a leader in the
 creation, promotion and distribution of entertainment, news, sports and music.
 Viacom's well-known brands include CBS, MTV, Nickelodeon, VH1, BET, Paramount
 Pictures, Infinity Broadcasting, UPN, TNN: The National Network, CMT, Showtime
 and Simon & Schuster.  More information about Viacom and its businesses is
 available at http://www.viacom.com.
 
     This news release contains forward-looking statements relating to
 Blockbuster's operations, including, without limitation, statements relating
 to business objectives and growth expectations, expectations relating to
 Blockbuster's initiatives with DIRECTV and RadioShack, the anticipated impact
 of DVD on Blockbuster's operations, and expectations regarding Blockbuster's
 financial results for 2001.  These forward-looking statements are based on
 Blockbuster's current intent, expectations, estimates, and projections and are
 not guarantees of future performance.  These statements involve risks,
 uncertainties, assumptions, and other factors that could cause actual results
 to vary materially from those expressed in or indicated by them.  Factors
 include, among others: consumer interest in, and demand for, newly released
 videos, DVDs and other Blockbuster product and service offerings; the impact
 of competitive product and service offerings and pricing; the effect of game
 platform cycles; the impact of technological shifts on Blockbuster's business
 and Blockbuster's ability to respond to changing consumer preferences;
 consumer acceptance of, and demand for, new technologies; Blockbuster's
 ability to reach agreements with service, product, and content providers on
 acceptable commercial terms and the success of these alliances and agreements
 in developing new products and services; and other factors, as set forth under
 the heading "Cautionary Statements" in Blockbuster's annual report on Form
 10-K for the fiscal year ended December 31, 2000.
 
 
                                  BLOCKBUSTER INC.
                          COMPARATIVE FINANCIAL HIGHLIGHTS
                      (In millions, except per share amounts)
 
                                                    Three Months Ended
                                                         March 31,
                                                   2001              2000
     Revenues:
       Rental revenues                          $1,117.9          $1,024.4
       Merchandise sales                           169.5             170.5
       Other revenues                               20.5              16.2
                                                 1,307.9           1,211.1
     Cost of sales:
       Cost of rental revenues                     393.5             360.7
       Cost of merchandise sold                    135.2             135.7
                                                   528.7             496.4
 
     Gross profit                                  779.2             714.7
 
     Operating expenses:
       General and administrative                  564.3             512.8
       Advertising                                  54.4              51.6
       Depreciation                                 62.5              61.1
       Amortization of intangibles                  44.2              44.5
                                                   725.4             670.0
 
     Operating income                               53.8              44.7
       Interest expense                            (24.4)            (29.4)
       Interest income                               1.8               1.7
       Other items, net                             (1.6)              ---
 
     Income before income taxes                     29.6              17.0
       Provision for income taxes                  (25.3)            (21.7)
       Equity in income of affiliated
        companies, net of tax                        0.4               0.6
     Net income (loss)                              $4.7             $(4.1)
     Net income (loss) per share:
       Basic and diluted                           $0.03            $(0.02)
 
     EBITDA (1)                                   $160.5            $150.3
     Cash earnings (2)                             $46.5             $38.1
     Cash earnings per share, basic and
      diluted (2)                                  $0.27             $0.22
 
     Weighted average shares outstanding:
       Basic                                       175.0             175.0
 
       Diluted                                     175.4             175.0
 
     Cash dividends per common share               $0.02             $0.02
 
     Same Store Revenues Data:
       Worldwide same store revenues
        increase (3)                                 5.3%              3.1%
 
     (1)   EBITDA represents operating income plus depreciation and
           amortization of intangibles.  EBITDA may differ in the method of
           calculation from similarly titled measures used by other companies.
     (2)   Cash earnings reflect net income before intangible amortization, net
           of tax.
     (3)   This represents the increase over the prior comparable period.
 
 
                                BLOCKBUSTER INC.
                                   OTHER DATA
            (In millions, except worldwide store count information)
 
 
      Selected Balance Sheet Data:
                                                 March 31,       December 31,
                                                   2001              2000
 
     Cash and cash equivalents                    $137.9            $194.2
     Total debt (excluding capital lease
      obligations)                              $1,028.9          $1,047.0
 
 
      Worldwide Store Count Information:
                                                      Three Months Ended
                                                           March 31,
                                                    2001             2000
     Domestic Company-Operated Stores:
     Beginning                                     4,273             3,970
     Net additions                                    22                52
     Ending                                        4,295             4,022
 
     International Company-Operated Stores:
     Beginning                                     1,981             1,909
     Net additions                                     7                23
     Ending                                        1,988             1,932
 
     Franchised and/or Joint Venture Stores:
     Beginning                                     1,423             1,274
     Net additions                                    17                20
     Ending                                        1,440             1,294
 
     Total Stores Worldwide:
     Beginning                                     7,677             7,153
     Net additions                                    46                95
     Ending                                        7,723             7,248
 
 SOURCE  Blockbuster Inc.

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