Take-Two Interactive Software, Inc. Announces Second Quarter 2001 Financial Results
NEW YORK--(BUSINESS WIRE)--May 24, 2001--Take-Two Interactive Software, Inc. (NASDAQ: TTWO - news)
* EPS Of $0.12 Excluding Non-Recurring Charges Exceeds Expectations -
* Affirms Fiscal Year 2001 Guidance -
* Record Net Sales And Cash Flow -
* Gameplay.Com Investment Eliminated From Balance Sheet -
Take-Two Interactive Software, Inc. (NASDAQ: TTWO - news) today announced record net sales and cash flow for its 2001 second quarter ended April 30, 2001.
Net sales for the quarter were $93.3 million compared with $70.0 million for the same period a year ago, representing a 33% increase. Net income was $3.9 million, or $0.12 per fully diluted share, excluding non-recurring, non-cash impairment charges of $24.9 million ($15.8 million net of taxes), relating to the Company's investments in Gameplay.com and eUniverse.com and certain related Internet assets, compared with $3.4 million, or $0.13 per fully diluted share for the same period a year ago.
For the six months ended April 30, 2001, the Company recorded net sales of $224.5 million and net income of $11.6 million, or $0.35 per fully diluted share, excluding the non-recurring, non-cash impairment charges. This compares to net sales of $192.9 million and net income of $8.1 million, or $0.32 per fully diluted share for the same period a year ago.
Net sales for the trailing twelve months ended April 30, 2001 were approximately $418.6 million.
Paul Eibeler, President, stated, ``From an operating standpoint, this was an excellent quarter for Take-Two. The continued and rapid maturation of our Company coincides with the beginning of what promises to be a period of record expansion for the interactive entertainment software industry. We have begun to see an acceleration in our business, as evidenced by our top line growth, and we anticipate the strongest publishing schedule in our company's history to lead us to record profitability levels this Christmas.''
Guidance:
The Company's 2001 financial guidance remains at $1.00 in fully diluted earnings per share, exclusive of the aforementioned non-recurring, non-cash impairment charges, and $500 million in net sales. The Company expects to benefit from Sony's increased shipments of the PlayStation 2, as well as the introduction of Nintendo's Game Boy Advance in fiscal 2001. Fiscal 2002 results will benefit from the launch of Microsoft's Xbox and Nintendo's GameCube this fall, and continuing into the holiday season.
Guidance for earnings per share, excluding the aforementioned non-recurring, non-cash impairment charges, and revenue for the remainder of the fiscal year ending October 31, 2001 follows:
Q3 2001: $85 - $90 million in net sales and $0.04 - $0.05 in fully
diluted EPS; Q4 2001: $188 - $195 million in net sales and $0.59 - 0.61 in fully
diluted EPS.
Publishing:
Publishing revenue represented approximately 55% of net sales for the quarter. The Company is proud to report it was the 7th largest entertainment software publisher year-to-date in North America, its highest ranking in history, according to NPD/TRST data. Publishing revenues in Europe also continued to be strong.
During the quarter the Company released two top-ten selling PC products in North America and Europe: Tropico, an award-winning strategy game from its wholly-owned development studio PopTop Software, and Serious Sam.
PlayStation 2 software titles continued to sell well both domestically and internationally. The Company's award-winning Midnight Club: Street Racing, a game released concurrently with the system's introduction in October 2000, maintained its ranking among the top-ten selling games for PlayStation 2 worldwide. 4x4 EVO, an off-road driving adventure game that shipped for the PlayStation 2 during the quarter, has provided additional momentum to the Company's expanding PlayStation 2 business.
The Company's value priced line of PlayStation titles, including Spec Ops, DarkStone, Action Bass, and Ford Racing, continued to rank among the top selling PlayStation games in North America. As part of this value priced program, during the second quarter the Company released Spec Ops: Ranger Elite, which debuted at #2 on the NPD/TRST charts. During the period the Company successfully launched a similar value priced program internationally, where Duke Nukem: Land of the Babes debuted at #1 in the major markets in Europe.
Looking forward to the balance of fiscal 2001, the Company expects to benefit from PC and PlayStation 2 releases of the highly anticipated Max Payne from 3D Realms/ Remedy; Duke Nukem Forever, Mafia, Stronghold, and Myth 3, all for the PC; Motocross Mania and Hidden & Dangerous for the PlayStation; and Rune: Viking Warlord for the PlayStation 2. The Company will also release Smuggler's Run 2 and the next release of its largest franchise Grand Theft Auto 3, both for PlayStation 2.
Additionally the Company expects to release several Nintendo Game Boy Advance titles during fiscal 2001 and have at least one game available for the launch of Microsoft's Xbox. The Company has also begun development of a product featuring Duke Nukem for Nintendo's soon to be released GameCube.
Distribution:
The Company's Jack of All Games distribution subsidiary continued to perform well in the second quarter. Jack of All Games expanded its market share and capitalized on the increased availability of PlayStation 2 hardware and the resulting growth in PlayStation 2 software sales, as well as sustained demand for PlayStation products. Distribution revenue is expected to benefit from the launch of next generation hardware and software later this calendar year.
Selected Financial Highlights:
The Company operated on a cash flow positive basis during the quarter, generating approximately $2 million in cash from operating activities, as compared to negative cash flow of approximately $14 million for the same period a year ago. For the first six months of fiscal 2001 the Company generated approximately $23 million in operating cash flow, an increase of approximately $43 million compared with the same period a year ago. The Company will continue its efforts to generate positive operating cash flow throughout the balance of fiscal 2001.
As expected, the Company's balance sheet has been strengthened by the elimination of its investment in Gameplay.com. Also included in the impairment charges was a reduction in the value of Internet assets attributed to the Company's Neo Software development studio, which in addition to its other development activities for the Company, was expecting to deliver certain online products for distribution by Gameplay.com. The Company also wrote down its investment in eUniverse.com.
Kelly Sumner, Chief Executive Officer said, ``Take-Two continues to focus on strengthening its balance sheet and solidifying its financial position in preparation for what promises to be a period of unprecedented growth for the interactive entertainment software industry.'' |
