eGames Anticipates Second Quarter Loss; Company Reduces Workforce by 25% As Part of Cost Cutting Program
LANGHORNE, Pa., Jan. 10 /PRNewswire/ -- eGames, Inc. (Nasdaq: EGAM - news) today announced that the Company expects to report a loss of between $250,000 and $350,000, or $0.02 to $0.04 per share, for its fiscal second quarter ended December 31, 2000. This results from an approximate 11% to 13% decrease in net sales as compared to the same quarter last year.
According to Jerry Klein, President and CEO of eGames, ``Our disappointing financial performance for our fiscal second quarter was the result of a number of factors. Firstly, overall retail sales during the second quarter were disappointing, in part brought on by a general softening in demand for new PCs. Secondly, we experienced increased competition in the value-priced segment of the consumer software marketplace as certain major software publishers initiated price cuts on previously higher-priced products. Additionally, certain office superstores informed us that they intend to reduce their commitment to value-priced consumer software products following the holiday season, necessitating increased return provisions for the quarter.''
Mr. Klein continued, ``We are responding to the current difficult market environment by increasing our focus on effectively managing our cost structure. To this end, we have reduced our workforce by approximately 25%, a move which is expected to save the Company an estimated $150,000 per quarter. We are also reducing our utilization of outside professional service vendors as part of our commitment to cut our operating expenses going forward.
``Although we are disappointed with our fiscal second quarter financial performance, we remain committed to our business plan, which is focused on increasing the penetration and profitability of our Store-in-a-Store program, particularly in the food and drug retail channels, and on aggressively marketing our branded browser concept to the promotional industry. We continue to strive to bring high-quality, value-priced, Family-Friendly(TM) software games to the growing population of casual gamers,'' concluded Mr. Klein.
eGames, Inc., headquartered in Langhorne, PA, develops, publishes and markets a diversified line of personal computer software primarily for consumer entertainment and personal productivity. The Company promotes the eGames(TM), Game Master Series(TM), Multi-Pack and Galaxy of Home Office Help(TM) brand names in order to generate customer loyalty, encourage repeat purchases and differentiate eGames Software products to retailers and consumers. Additionally, eGames focuses on the software needs of the mass-market consumer and develops and implements brand marketing solutions designed to serve that consumer and the channels where they most frequently shop. eGames -- Where the ``e'' is for Everybody!
Additional information regarding eGames, Inc. can be found on the Company's Web site at www.egames.com . |
