Blockbuster Video Activist Presentation Deck
Poor Financial Performance and Forecasting = Missed
Guidance and Loss of Credibility, but Not Loss of Bonus
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Overall consumer spending on DVD and Blu-ray rentals was up in 2009. Rentrak Corp. reports rental
spending having increased 4.2 percent to $6.5 billion for the year
However, in 2009 BBI twice missed guidance, even after re-affirming such guidance to investors just
months before period end
2009 EBITDA Guidance Missed Twice:
March 2009: 2009 Fiscal EBITDA Guidance originally set at $305 to $325 million
May 2009: Guidance re-affirmed
Aug 2009: Guidance lowered to $270-$290 million
Nov 2009 Guidance re-affirmed
Jan 2010: Guidance lowered drastically to $195-$205 million
Credibility crisis at the financial controls level
Despite missing guidance twice, the Compensation Committee, chaired by Gary Fernandes, awarded
CEO Jim Keyes 80% of his target bonus and CFO Thomas Casey 100% of his target bonus for the
year 2009.
Additionally, in 2010 CFO Casey's salary was increased from $500,000 to $650,000 and he was
granted a $400,000 retention bonus, despite continued weak financial performance and a plunging
stock price. Bonus partially awarded upon completion of ‘restructuring' regardless of outcome to
stock price (single performance metric not aligned with shareholder interests).View entire presentation