Exhibit 99.1

UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL INFORMATION

       The following unaudited pro forma consolidated condensed financial information is presented to illustrate the effects on our historical financial statements and results of operations of our proposed merger with Hollywood Entertainment Corporation (“Hollywood”) and the application of the proceeds from the offering of $325.0 million principal amount of Senior Floating Rate Notes due 2012 and the refinancing transactions described below (the “Refinancing”). Historical amounts as of and for 2004 are derived from Movie Gallery and Hollywood’s audited 2004 consolidated financial statements. The statements reflect adjustments for the following:

•  the completion of the merger with Hollywood (including the application of purchase accounting);

•  the receipt of the net proceeds from the offering of the notes;

•  the receipt of $795.0 million pursuant to our new senior credit facility; and

•  the application of the proceeds from the Refinancing to pay down the $125.0 million outstanding balance under Hollywood’s existing credit facility, to repurchase all of Hollywood’s outstanding 9.625% Senior Subordinated Notes due 2011 (assuming all of such notes are tendered), and to pay fees and expenses incurred in connection with the Refinancing.

       The unaudited pro forma consolidated condensed balance sheet as of January 2, 2005 assumes that the merger and the Refinancing occurred on January 2, 2005. The unaudited pro forma consolidated condensed statement of operations for 2004 assumes that the merger and the Refinancing took place on January 5, 2004, the beginning of our 2004 fiscal year. This information is not necessarily indicative of our financial condition or results of operations had the merger and the Refinancing been completed as of the dates indicated, nor should it be construed as representative of our future financial condition or results of operations. The unaudited pro forma consolidated condensed financial information has not been adjusted to reflect any operating efficiencies that may be realized by the combined company as a result of the merger except for the elimination of certain executive compensation costs as a result of departures in corporate personnel.

       The unaudited pro forma consolidated condensed financial statements should be read in conjunction with our consolidated financial statements and related notes and the other information included herein.

Unaudited Pro Forma Consolidated Balance Sheet

	Historical		Historical
	Movie		Hollywood						Combined
	Gallery		Entertainment						Company
	January 2, 2005		December 31, 2004*			Adjustments			Pro Forma
	(In thousands)
Assets
Current assets:
Cash and cash equivalents	$	25,518	$	193,760		$	(184,700	)(B)	$	34,578
Accounts receivable, net		—		37,922			—			37,922
Merchandise inventory		27,419		148,154			(31,848	)(D)		143,725
Prepaid expenses and other		22,205		22,835			—			45,040
Deferred income taxes		3,358		—			15,145	(A)		18,503
Total current assets		78,500		402,671			(201,403	)		279,768
Rental inventory, net		126,541		289,144			(1,896	)(A),(D)		413,789
Property, furnishings and equipment, net		128,182		227,824			25,133	(A)		381,139
Goodwill, net		143,761		69,465			421,896	(A)		635,122
Other intangibles, net		7,741		6,738			202,956	(A)		217,435
Deposits and other assets		7,417		35,705			23,257	(E)		66,379
Deferred income taxes		—		87,980			(74,916	)(A),(C)
		—		—			(13,064	)(F)		—
Total assets	$	492,142	$	1,119,527		$	381,963		$	1,993,632
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	68,977	$	174,427		$	—		$	243,404
Accrued liabilities		41,413		160,285			—			201,698
Current maturities of financing obligations		—		15,581			—			15,581
Current portion of long term debt		—		555			26,000	(B)		26,555
Total current liabilities		110,390		350,848			26,000			487,238
Long term debt, less current portion		—		350,701			744,000	(B)		1,094,701
Deferred income taxes		50,618		—			(13,064	)(F)		37,554
Other liabilities		—		44,346			—			44,346
Total liabilities		161,008		745,895			756,936			1,663,839
Stockholders’ equity:
Preferred stock		—		—			—			—
Common stock		31		494,246			(494,246	)(C)		31
Additional paid in capital		188,098		—			—			188,098
Retained earnings		136,750		(120,614	)		119,273	(C)		135,409
Accumulated other comprehensive income		6,255		—			—			6,255
Total stockholders’ equity		331,134		373,632			(374,973	)		329,793
Total liabilities and stockholders’ equity	$	492,142	$	1,119,527		$	381,963		$	1,993,632

*  Certain reclassifications have been made to the historical presentation of Hollywood to conform to the presentation used in the unaudited pro forma consolidated balance sheet.

Unaudited Pro Forma Consolidated Statements of Income

					Historical
		Historical			Hollywood
		Movie Gallery			Entertainment					Combined
		Fiscal Year Ended			Year Ended					Company
		January 2, 2005			December 31, 2004*		Adjustments			Pro Forma
		(In thousands, except per share data)
Revenues:
	Rentals	$	729,167		$	1,388,298	$	(1,720	)(G)	$	2,115,745
	Product sales		62,010			394,066		—			456,076
Total revenues			791,177			1,782,364		(1,720	)		2,571,821
Cost of sales:
	Cost of rental revenues		208,160			417,588		10,521	(J)		636,269
	Cost of product sales		41,942			299,074		—			341,016
Gross margin			541,075			1,065,702		(12,241	)		1,594,536
Operating costs and expenses
	Store operating expenses		395,425			795,135		6,577	(I)		1,197,137
	General and administrative		54,644			123,946		(5,187	)(K)		173,403
	Amortization of intangibles		2,601			—		1,643	(I)		4,244
	Stock option compensation		831			133		—			964
Operating income			87,574			146,488		(15,274	)		218,788
	Interest expense, net		624			29,993		46,712	(H)		77,329
	Equity in losses of unconsolidated entities		(5,746	)		—		—			(5,746	)
Income before income taxes			81,204			116,495		(61,986	)		135,713
	Income tax expense (benefit)		31,716			45,207		(24,175	)(L)		52,748
Net income		$	49,488		$	71,288	$	(37,811	)	$	82,965
Earnings per share:
	Basic	$	1.54							$	2.58
	Diluted	$	1.52							$	2.55
Weighted average shares outstanding:
	Basic		32,096								32,096
	Diluted		32,552								32,552

*  Certain reclassifications have been made to the historical presentation of Hollywood to conform to the presentation used in the unaudited pro forma consolidated statements of income.

Notes to the Pro Forma Adjustments

(In thousands)

Balance Sheet

      (A) These unaudited pro forma consolidated condensed financial statements reflect a preliminary allocation of the purchase price, assuming the merger had been completed on January 2, 2005. The preliminary allocation is subject to change based on finalization of the fair values of the tangible and intangible assets acquired and liabilities assumed and final determination of the purchase consideration, including direct costs of the acquisition. The preliminary allocation of the purchase price is as follows:

Purchase of Hollywood equity						$	856,600
Repayment of existing indebtedness (including bond tender premium and consent fees)							382,000
Direct costs of acquisition							33,790
		Total purchase consideration				$	1,272,390
Purchase price allocated to:
Net assets of Hollywood at December 31, 2004							373,632
Retirement of Hollywood debt							350,000
Adjust Hollywood’s assets and liabilities to fair value:
	Rental inventory		$	(33,744	)
	Property, furnishings and equipment			25,133
	Elimination of Hollywood’s historical goodwill			(69,465	)
	Other intangibles			202,956
	Unamortized bank fees			(6,833	)
Total adjustment to record net assets at fair value(1)							118,047
To recognize deferred taxes on purchase price allocation(2)							(60,650	)
Allocation of the excess purchase price to goodwill							491,361
						$	1,272,390
The pro forma adjustment to goodwill reflects the following:
Allocation of the excess purchase price to goodwill						$	491,361
Elimination of Hollywood’s historical goodwill							(69,465	)
						$	421,896

(1)	The adjustment of Hollywood’s tangible and intangible assets acquired and liabilities assumed to their estimated fair values indicates an excess of consideration paid over those fair values.
(2)	Includes $15,145 classified as current deferred tax assets and $(75,795) classified as non-current deferred tax assets.

      (B) Reflects Movie Gallery’s use of approximately $184,700 of cash on hand and the issuance of debt to effect the acquisition of Hollywood as summarized below.

		Amount
Sources:
	Cash
	Cash on hand	$	184,700
	Debt
	Revolver		—
	Term Loan A		95,000
	Term Loan B		700,000
	Senior Floating Rate Notes		325,000
			1,120,000
		$	1,304,700
Uses:
	Purchase of Hollywood equity	$	856,600
	Retirement of Hollywood debt (including bond tender premium and consent fees)		382,000
	Fees and expenses		66,100
		$	1,304,700
	The pro forma adjustment to debt reflects the following:
	Proposed borrowings		1,120,000
	Retirement of Hollywood’s long term debt, at historical carrying value		(350,000	)
	Pro forma adjustment to outstanding debt		770,000
	Current portion of proposed borrowings		26,000
	Non-current portion of pro forma adjustment	$	744,000

      (C) To reflect (i) the elimination of Hollywood’s common stock of $494,246, and accumulated deficit of $120,614 and (ii) the effect of a non-recurring charge associated with the Refinancing, which is estimated to total $1,341, net of tax.

      (D) To reclassify Hollywood’s previously viewed movies from merchandise inventory to rental inventory to conform to Movie Gallery’s balance sheet presentation.

      (E) To reflect the capitalization of an estimated $30,090 in financing costs that will be amortized over the life of the proposed borrowings, offset by the write-off of $6,833 of unamortized debt issue costs for Hollywood’s existing borrowings (as described in Note (A)), which are expected to be repaid as part of the transaction.

      (F) To reclassify Hollywood’s residual non-current deferred tax assets of $13,064 to offset Movie Gallery’s non-current deferred tax liabilities.

Income Statement

      (G) To conform Hollywood’s method of accounting for extending viewing fees to Movie Gallery’s accounting method.

      (H) Reflects interest expense on the proposed Refinancing, including the Senior Floating Rate Notes, as described in Note (B). The adjustment reflects a reduction in interest expense resulting from the assumed retirement of Hollywood’s notes and outstanding borrowings under its existing credit agreement. The adjustment to interest expense is presented as if the borrowings and retirements of borrowings occurred on the first day of fiscal 2004 according to the proposed terms of the proposed borrowings, including an interest rate swap related to 35% of the principal amount outstanding under the proposed Revolver, Term Loans and Senior Floating Rate Notes. For purposes of calculating the pro forma interest expense, the assumed incremental interest expense related to the interest rate swap was $9.8 million. The assumed interest rates presented in the table below used to compute pro forma interest expense were based on the average LIBOR index rates in effect during fiscal 2004, plus the contractual or expected margin applicable to each debt instrument. A ¹/8% variance in interest rates versus those we have assumed would change interest expense by approximately $1.0 million per year based on the pro forma principal amount of variable rate debt we will incur that will not be effectively fixed by our interest rate swap. The amortization of deferred financing costs is presented as if the financing costs were incurred on the first day of 2004 and amortized over the terms of the agreements on a straight-line basis, which approximates the effective interest rate method.

				Assumed
				Interest
		Amount		Rate
Revolver		$	—		4.42	%
Term Loan A			95,000		4.42	%
Term Loan B			700,000		4.67	%
Senior Floating Rate Notes			325,000		7.67	%
		$	1,120,000
Pro forma interest expense							$	62,018
Incremental interest expense related to the interest rate swap								9,800
Amortization of deferred financing costs								4,887
								76,705
Elimination of Hollywood interest expense								(29,993	)
	Pro forma adjustment to interest expense						$	46,712

      (I) To reflect an increase in depreciation and intangibles amortization expense resulting from the adjustment to property, furnishings and equipment and identifiable intangible assets based on the adjustments of such assets to fair value as discussed in Note (A).

Increase in depreciation expense (estimated remaining useful life of four years)	$	6,577
Increase in intangibles amortization expense (estimated remaining useful life of five years)	$	1,643

      (J) To reflect an increase to rental inventory amortization expense of $10,521 resulting from the application of Movie Gallery’s rental inventory amortization method to the allocated fair value of Hollywood’s rental inventory, net of Hollywood’s historical amortization expense.

      (K) To reflect the reduction in Hollywood general and administrative expense of $5,187, primarily as a result of departures of corporate personnel, some of which have already occurred.

      (L) To reflect the tax effect of the net pro forma adjustments and record income tax expense at an estimated statutory rate of approximately 39%.