November saw the first comp-sales increase in five years, thechain reported, though December again saw a decline. Now, thecompany is testing different cosmetic improvements at severalstores in Dallas, and could move forward with a larger rollout.

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"For a small investment there are great improvements," said JimKeyes, chairman and CEO. "While it's still early, we're pleasedwith the results. "

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As a result, any US store closures this year will be the resultof lease expirations rather than a downsizing. "Before we closestores, we want to give our best shot at transforming them intoprofitable locations," Keyes added.

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However, the chain also is examining the profitability of itsinternational units, and could consider converting somecompany-owned units to licensees.

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Total fourth-quarter revenues increased 3.6% from the previousyear to $1.6 billion. Net income was $38.1 million, up from $29.8million from the previous year. Worldwide same-store and by-mailrevenues increased 7.4% from the same period last year.

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Revenues for 2007 increased 0.3% from the previous year to $5.54billion. The company reported a net loss of $85.1 million, comparedwith net income of $39.2 million in 2006. Blockbuster has more than7,800 stores throughout the Americas, Europe, Asia andAustralia.

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