MOVI Movie Gallery (MM)

Company Anticipates Compliance with All Debt Covenants for the Remainder of 2006 DOTHAN, Ala., Nov. 1 /PRNewswire-FirstCall/ -- Movie Gallery, Inc. (NASDAQ:MOVI) today announced that it has made a $17.9 million interest payment to holders of its 11% senior unsecured notes, which are due in 2012. The interest payment to bondholders follows Movie Gallery's $28.4 million term loan principal and interest payment to bank lenders at the end of September. Although there can be no assurances regarding Movie Gallery's results for the remainder of fiscal 2006 or its ability to complete sales of non-core assets, the Company believes that cash on hand, cash from operations, cash from non-core asset sales, and available borrowings under its revolving credit facility will be sufficient to operate the business, satisfy working capital and capital expenditure requirements, and meet the Company's foreseeable liquidity requirements, including remaining in compliance with the financial covenants contained in the credit facility and debt service for the remainder of fiscal 2006. About Movie Gallery Movie Gallery is the second largest North American video rental company with over 4,650 stores located in all 50 U.S. states, Canada and Mexico. Since the Company's initial public offering in August 1994, Movie Gallery has grown from 97 stores to its present size through acquisitions and new store openings. For more information about the Company, please visit our website at: http://www.moviegallery.com/ Forward Looking Statements To take advantage of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, you are hereby cautioned that this release contains forward-looking statements, including descriptions of the Company's ability to meet its liquidity requirements and comply with financial covenants contained in its credit facility, projected conditions in the home video rental industry, benefits from the Company's operational improvement initiatives, anticipated capital expenditures, that are based upon the Company's current intent, estimates, expectations and projections and involve a number of risks and uncertainties. Various factors exist which may cause results to differ from these expectations. These risks and uncertainties include, but are not limited to, the risk factors that are discussed from time to time in the Company's SEC reports, including, but not limited to, the Company's annual report on Form 10-K for the fiscal year ended January 1, 2006 and subsequently filed quarterly reports on Form 10-Q. In addition to the potential effect of these ongoing factors, the Company's operations and financial performance may be adversely effected if, among other factors; (i) same-store revenues are less than projected; (ii) the Company is unable to successfully complete sales of non-core assets or restructure its real estate portfolio; (iii) the Company is unable to comply with the revised financial covenants or other covenants contained in its senior credit facility; (iv) the Company's operational improvement initiatives fail to generate anticipated cost reductions; (v) the availability of new movie releases priced for sale negatively impacts the consumers' desire to rent movies; (vi) the Company experiences unforeseen issues with the continued integration of the Hollywood Entertainment business; (vii) the Company's actual expenses or liquidity requirements differ from estimates and expectations; (viii) consumer demand for movies and games is less than expected; (ix) the availability of movies and games is less than expected; or (x) competitive pressures are greater than anticipated. The Company undertakes no obligation to update any forward- looking statements, whether as a result of new information, future events, or otherwise. Contacts Financial: Michelle K. Lewis, Movie Gallery, Inc., 503-570-1950 Media: Andrew B. Siegel of Joele Frank, Wilkinson Brimmer Katcher, 212-355-4449 ext. 127 DATASOURCE: Movie Gallery, Inc. CONTACT: Financial, Michelle K. Lewis of Movie Gallery, Inc., +1-503-570-1950; or Media, Andrew B. Siegel of Joele Frank, Wilkinson Brimmer Katcher, +1-212-355-4449, ext. 127 Web site: http://www.moviegallery.com/

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